SecProbe.io

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 MORGAN
STANLEY

 1585
Broadway

 New
York, New York 10036

 MORGAN
STANLEY FINANCE LLC

 1585
Broadway

 New
York, New York 10036

 March
30, 2026

 VIA
EDGAR

 Securities
and Exchange Commission

 Division
of Corporation Finance

 100
F Street, N.E.

 Washington,
D.C. 20549-010

 Attention:
Robert Arzonetti, Division of Corporation Finance

 Re: Morgan
Stanley/Morgan Stanley Finance LLC

 Registration
Statement on Form S-3, as amended

 File
Nos. 333-293641 and 333-293641-01

 Request
for Acceleration of Effectiveness

 Ladies
and Gentlemen:

 In
accordance with Rule 461 under the Securities Act of 1933, as amended, Morgan Stanley and Morgan Stanley Finance LLC (the "Registrants")
hereby request acceleration of the effective date of the Registration Statement on Form S-3, as amended (File Nos. 333-293641 and 333-293641-01)
(the "Registration Statement") so that it will become effective at 9:00 a.m., New York City time, on April 8, 2026, or as
soon thereafter as practicable.

 Please
contact Christopher S. Schell at (212) 450-4011 of Davis Polk & Wardwell LLP, counsel to the Registrants, as soon as the Registration
Statement has been declared effective, or if you have any other questions or concerns regarding this matter.

 [Signature
Page Follows]

 Very
truly yours,

 MORGAN STANLEY

 By:
 /s/
 Jeanne
 Greeley O'Regan

 Name:
 Jeanne Greeley O'Regan

 Title:
 Deputy Corporate Secretary and Counsel

 MORGAN STANLEY FINANCE LLC

 By:
 /s/
 Aaron
 Page

 Name:
 Aaron
 Page

 Title:
 Secretary and Counsel

 [Signature
Page to Request for Acceleration of Effectiveness]

March 9, 2026
Edward Pick
Chief Executive Officer
Morgan Stanley
1585 Broadway
New York, NY 10036
Re:Morgan Stanley
1585 Broadway
New York, NY 10036
Dear Edward Pick:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration. We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Robert Arzonetti at 202-551-8819 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:Christopher Schell

October 29, 2024
Sharon Yeshaya
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036
Re:Morgan Stanley
Form 10-K for the Fiscal Year Ended December 31, 2023
Form 10-Q for the Quarterly Period Ended March 31, 2024
Form 10-Q for Quarterly Period Ended June 30, 2024
Response dated October 2, 2024
File No. 001-11758
Dear Sharon Yeshaya:
            We have completed our review of your filings. We remind you that the company and
its management are responsible for the accuracy and adequacy of their disclosures,
notwithstanding any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Office of Finance

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FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO C.F.R. § 200.83.

October 2, 2024

VIA EDGAR, DELIVERY AND ELECTRONIC MAIL

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Mail Stop 4561

Washington, DC 20549

Attention:

Lory Empie

Marc Thomas

Todd Schiffman

James Lopez

Re: Morgan Stanley

Form 10-K for the Fiscal Year Ended December 31, 2023

Filed February 22, 2024

Form 10-Q for the Quarterly Period Ended June 30, 2024

Filed August 5, 2024

File No. 001-11758

Ladies and Gentlemen:

Morgan Stanley (the “Company”) is pleased to respond to your letter of September 20, 2024 concerning its Form 10-Q for the quarterly period ended June 30, 2024.

For your convenience, we have restated your comment below.

Confidential Treatment Request

Due to the commercially sensitive nature of information contained in this letter, the Company has requested confidential treatment of portions of the Company’s response to Comment No. 1 below in accordance with Rule 83 (17 C.F.R. § 200.83) of the Rules of Practice of the Commission. The EDGAR submission of this letter omits the portions for which confidential treatment is requested. The location of the information subject to the confidential treatment request is indicated in the EDGAR submission with [*]. A complete paper copy of this letter, including the portions for which confidential treatment is requested, is being provided supplementally to the Staff. The Company respectfully requests that we be notified immediately in accordance with the Company’s confidential treatment request letter submitted supplementally on the date hereof before the Commission permits any disclosure of the omitted confidential information.

Form 10-Q for the Quarterly Period Ended June 30, 2024

Notes to Consolidated Financial Statements

2. Significant Accounting Policies, page 45

Comment:

1.We note your response to comment 3. Please respond to the following additional items:

•Please describe for us specifically the details and circumstances considered and the facts supporting your conclusion to change the unit of account for the services that included extension of margin to facilitate client’s securities purchase transactions and sourcing securities or executing other financing arrangements to cover certain client short positions. Include your detailed policies before and after the change in unit of accounts.

•Please provide us the basis for your response that these transactions are typically accounted for as a single unit of account on the balance sheet and a summary of the circumstances for why your accounting did not do so previously.

•Please explain in more detail how the referred change in unit of account further aligns the accounting treatment between the balance sheet and the related interest income or expense.

1

FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO C.F.R. § 200.83.

Response:

There has not been any change in the Company’s accounting practice to present prime brokerage activity that is governed by a Customer Prime Broker Account Agreement (“prime brokerage arrangement”) as a single position based on the legal terms of the agreements on the Company’s consolidated balance sheet. Rather, the change disclosed in connection with the Company’s filings on Forms 10-Q for the periods ended March 31, 2024 and June 30, 2024 was a change in consolidated income statement presentation of interest income and interest expense from prime brokerage arrangements, such that the net interest income from prime brokerage arrangements is recorded either as interest income or interest expense on a daily basis depending on whether the client’s prime brokerage arrangement is presented as a net receivable or a net payable on the Company’s consolidated balance sheet at the end of such day. The Company believes that this change to the Company’s income statement presentation achieves greater consistency with the Company’s consolidated balance sheet presentation of prime brokerage arrangements as well as improved alignment with certain peer U.S. G-SIB financial institutions. As further discussed within this response, this change is not a change in accounting principle under FASB ASC 250 but a change in the basis of presentation of these arrangements in the income statement. Please find below the details and circumstances specifically considered in support of the presentation for prime brokerage arrangements.

Overview of Prime Brokerage arrangements

The Company offers prime brokerage arrangements to clients in the United States and internationally, facilitating the clearance and settlement of securities trades for clients. Each prime brokerage arrangement is typically governed by a single legal agreement and includes a client account or a collection of sub-accounts. Clients may hold in their prime brokerage accounts a mix of cash and securities to facilitate their trading and investment activities. The prime brokerage arrangement provides for the extension of margin to facilitate clients’ securities purchase transactions, or long positions, and facilitates clients’ sales of securities short (i.e., sales of securities which the client does not hold in its account). The Company charges interest to clients for margin loan debit balances associated with prime brokerage arrangements. Likewise, the Company pays interest to clients on credit balances associated with prime brokerage arrangements, including cash on deposit.

When a client purchases a security through its prime brokerage arrangement, the purchase will be settled with either cash on deposit in the account, or through the extension of a margin loan to the client. When a client sells a security, the cash proceeds from the sale will be deposited in the client’s account. If the client sells a security short, the client must either deposit the security into its account prior to settlement, or the Company as prime broker will source the security to settle the client’s short sale. The net balance of margin lending, which generates debits in the account, and cash deposit and short sale settlement activities provided by the Company as prime broker, which generate credits in the account, is driven by the client’s trading activities. The assets held in the account serve as collateral for the client’s obligations under the prime brokerage arrangement including those arising from margin lending and short sale activities provided by the Company as prime broker. The client must maintain a minimum level of net equity in the account (i.e., the amount by which the client’s assets associated with the prime brokerage arrangement exceed the client’s liabilities associated with the prime brokerage arrangement) required for both regulatory and the Company’s own margin requirements, and the Company has the contractual right to call for additional collateral when required based on the client’s net equity in its account. Furthermore, in the event of client default, the Company has the right to foreclose upon all collateral credited to the account and the cash obligations between the Company as prime broker and the client would be offset against each other.

Balance Sheet Presentation

As discussed above, the prime brokerage arrangement is typically governed by a single legal agreement, restricted as to the net equity requirements at the level of the prime brokerage arrangement, margined on a net basis, and the client assets in the related client account would be foreclosed to satisfy a client’s net obligation to the Company in the event of the client’s default. We understand that it is industry practice for financial institutions to present similar prime brokerage activities as a single balance based on the end-of-day net position at the level of each prime brokerage arrangement on their respective balance sheets, i.e. as “net” receivables and payables.  Given these factors, the Company records either a net receivable or net payable at the level of the prime brokerage arrangement, in either “Customer and other receivables” or “Customer and other payables” on the Company’s consolidated balance sheet.

There was no change to the Company’s presentation of prime brokerage arrangements on its consolidated balance sheet in the first quarter of 2024.

2

FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO C.F.R. § 200.83.

Income Statement Presentation

The changes implemented by the Company in the first quarter of 2024 related exclusively to the income statement presentation of prime brokerage arrangements. These changes to the consolidated income statement presentation did not result in changes to the Company’s recognition or measurement of net interest income or net income.

*

There is no prescriptive accounting guidance addressing the presentation of interest income or interest expense from prime brokerage arrangements in these circumstances. Prime brokerage arrangements are not in the scope of FASB ASC 606 because the underlying client positions are financial instruments which are expressly excluded from the scope of this standard per ASC 606-10-15-2. Each prime brokerage arrangement consists of a group of financial instrument transactions in debit and credit positions, which distinguishes prime brokerage arrangements from typical financing transactions which are either assets or liabilities. As such, there is no guidance in the FASB Accounting Standards Codification that provides a suitable analogy for determining the income statement presentation of such prime brokerage arrangements.

While the Company’s presentation of interest income and interest expense from prime brokerage arrangements before January 1, 2024 was acceptable under U.S. GAAP given the absence of prescriptive accounting guidance on this topic, the Company nonetheless initiated an internal feasibility assessment on changing its presentation of prime brokerage arrangements on its consolidated income statement by changing the focus to the net position at a client account level at the end of a given day in order to align with the Company’s consolidated balance sheet presentation of these arrangements. The Company considered peer practice when evaluating whether to change its consolidated income statement presentation of prime brokerage arrangements, noting that a peer U.S. G-SIB financial institution disclosed in its filing on Form 10-Q for the quarter ended June 30, 2019 that it implemented certain presentation changes to align the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage related customer receivables and payables that are presented as a single prime brokerage arrangement on the balance sheet.

Upon completion of the feasibility assessment and the execution of changes to operational processes, the Company changed its consolidated income statement presentation, effective January 1, 2024, to record interest income for prime brokerage arrangements in a net receivable position at the end of each day, and to record interest expense for prime brokerage arrangements in a net payable position at the end of each day. The Company does not believe that this change represents a change in accounting principle because there is no prescriptive accounting guidance on this topic. As discussed above, the Company considers this change a change in presentation that should be shown retrospectively and therefore it recast its 2023 consolidated income statement to conform the prior year presentation for interest income and interest expense presentation relating to prime brokerage arrangements to the current year presentation. The entire presentation change to the 2023 consolidated income statement was attributable to the Company’s Institutional Securities business segment. This change to the Company’s consolidated income statement in the first quarter of 2024 changed only the attribution of net interest income between interest income and interest expense with no impact on net interest income, net income or other financial statements including the Company’s consolidated balance sheet. The Company believes that this consolidated income statement presentation is more consistent with the premise that each prime brokerage arrangement is presented as either a net receivable or net payable based on the end of day position at the level of the prime brokerage arrangement on the balance sheet and that the change has resulted in improved financial statement presentation whereby interest-earning assets generate interest income and interest-bearing liabilities generate interest expense on the consolidated income statement.

*        *        *         *        *

Please feel free to contact me at (212) 761-7707 if you would like further clarification or additional information.

Sincerely,

/s/ Raja J. Akram

3

FOIA CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO C.F.R. § 200.83.

Raja J. Akram

Deputy Chief Financial Officer (Chief Accounting Officer)

cc:  Sharon Yeshaya, Executive Vice President and Chief Financial Officer

  Eric Grossman, Executive Vice President and Chief Legal Officer

4

September 20, 2024
Sharon Yeshaya
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036
Re:Morgan Stanley
Form 10-K for the Fiscal Year Ended December 31, 2023
Form 10-Q for the Quarterly Period Ended June 30, 2024
Response dated August 26, 2024
File No. 001-11758
Dear Sharon Yeshaya:
            We have reviewed your August 26, 2024  response to our comment letter and have the
following comment.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 10-Q for the Quarterly Period Ended June 30, 2024
Notes to Consolidated Financial Statements
2. Significant Accounting Policies, page 45
We note your response to comment 3. Please respond to the following additional items:
•Please describe for us specifically the details and circumstances considered and the
facts supporting your conclusion to change the unit of account for the services that
included extension of margin to facilitate client’s securities purchase transactions and
sourcing securities or executing other financing arrangements to cover certain client
short positions. Include your detailed policies before and after the change in unit of
accounts.
•Please provide us the basis for your response that these transactions are typically
accounted for as a single unit of account on the balance sheet and a summary of the
circumstances for why your accounting did not do so previously.
Please explain in more detail how the referred change in unit of account further aligns •1.

September 20, 2024
Page 2
the accounting treatment between the balance sheet and the related interest income or
expense.
            Please contact Lory Empie at 202-551-3714 or Marc Thomas at 202-551-3452 if you
have questions regarding comments on the financial statements and related matters. Please
contact Todd Schiffman at 202-551-3491 or James Lopez at 202-551-3536 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Finance

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August 26, 2024

VIA EDGAR AND ELECTRONIC MAIL

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Mail Stop 4561

Washington, DC 20549

Attention:

Lory Empie

Marc Thomas

Todd Schiffman

James Lopez

Re: Morgan Stanley

Form 10-K for the Fiscal Year Ended December 31, 2023

Filed February 22, 2024

Form 10-Q for the Quarterly Period Ended June 30, 2024

Filed August 5, 2024

File No. 001-11758

Ladies and Gentlemen:

Morgan Stanley (the “Company”) is pleased to respond to your letter of August 14, 2024 concerning its Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Form 10-K”) and Form 10-Q for the quarterly period ended June 30, 2024.

For your convenience, we have restated your comments below.

Form 10-K for the Fiscal Year Ended December 31, 2023

Management's Discussion and Analysis of Financial Condition and Results of Operations

Consolidated Results - Full Year Ended December 31, 2023, page 29

Comment:

1.Please tell us and revise, in future filings, to provide a specific and thorough discussion of the severance expenses, which were primarily related to the May 2023 “employee action.” Your disclosures should take into consideration and address the steps taken by the Company, as well as the impact on the operating performance of the impacted segments, geographic areas and on the consolidated level.

Response:

For the year ended December 31, 2023 (“prior year”) the Company recognized severance costs primarily associated with specific reductions in workforce (“RIFs”) of $353 million, of which $308 million were related to a May 2023 RIF recorded in the second quarter of 2023 (i.e. “employee action” in the 2023 Form 10-K), and an additional $45 million which were recorded in the second half of the year, all included within Compensation and benefits expenses as disclosed on pages 30 and 35 of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2023 Form 10-K. The specific RIFs occurred across the Company’s business segments and geographic regions and impacted approximately 4% of the Company’s global workforce at that time. The specific RIFs resulted from the Company’s review of its global workforce, operating expenses and the business environment following the acquisitions of E*TRADE Financial Corporation (“E*TRADE”) and Eaton Vance Corp. (“Eaton Vance”), rather than a change in strategy or exit of businesses. The impact of severance costs to any individual segment or geographic region was not deemed to be material for the prior year.

1

The Company had previously disclosed severance costs in the Financial Data Supplement of the Company (“Earnings Supplement”) for the quarter and year ended December 31, 2023 that was filed as Exhibit 99.2 to the Company’s Form 8-K dated January 16, 2024, of $220 million in the Institutional Securities business segment, $105 million in the Wealth Management business segment, and $28 million in the Investment Management business segment for the prior year. These severance costs reduced diluted EPS by $0.17 and pre-tax margin by approximately 65 basis points for the Company, 95 basis points for Institutional Securities, 40 basis points for Wealth management and 52 basis points for Investment management business segments for the prior year.

In future filings, to the extent the Company incurs material charges and such charges have a significant impact on any individual business segment or geographic region, or represent a material portion of the changes in an expense category within Management’s Discussion and Analysis, the Company will discuss and quantify the amount of these expenses by business segment and geography along with the impact to operating performance.

In future filings, in response to the Staff’s comment, beginning with the Form 10-Q for the quarter ended September 30, 2024, the Company will provide the following expanded qualitative and quantitative disclosure of prior period severance costs.

During the nine months ended September 30, 2023, Compensation and benefits expenses included severance costs of $308 million, associated with a reduction in workforce during the second quarter of 2023. This specific reduction in workforce occurred across the Company’s business segments and geographic regions, impacted approximately 4% of the Company’s global workforce, and resulted from the Company’s review of its global workforce, operating expenses and the business environment following the acquisitions of E*TRADE and Eaton Vance, rather than a change in strategy or exit of businesses. We recorded severance costs of $207 million in the Institutional Securities business segment, $78 million in the Wealth Management business segment, and $23 million in the Investment Management business segment for the prior year period. These costs were primarily incurred in the Americas and EMEA, with the majority in the Americas.

Comment:

2.Please tell us and revise, in future filings, to provide a specific and thorough discussion of the integration-related expenses recognized during the period. Your disclosures should discuss each of the types of integration activities that includes those relating to E*TRADE, the costs recognized, the segments impacted and on the consolidated level. You should also address additional costs required to complete any planned integration-related activities.

Response:

The Company recognized integration-related expenses of $293 million for the prior year, primarily related to the integrations of its acquired businesses, E*TRADE within the Wealth Management business segment and Eaton Vance within the Investment Management business segment. These integration-related expenses were significantly lower than the integration-related expenses incurred in the years ended December 31, 2022 of $470 million, and December 31, 2021 of $456 million, both from a consolidated and segment perspective, given integration activities were substantially completed by December 31, 2023. Additionally, segment attribution of these expenses during the prior year remained largely consistent with the attribution disclosed in 2022 and 2021.

In the Earnings Supplement for the quarter and year ended December 31, 2023, the Company disclosed integration-related expenses for the quarter and year ended December 31, 2023, of $30 million and $201 million respectively in the Wealth Management business segment, and $19 million and $92 million, respectively, in the Investment Management business segment. Similar tabular disclosures of integration-related expenses were also made in Form 10-K and 10-Q filings and Earnings Supplements from the year ended December 31, 2020 through the year ended December 31, 2022 when integration-related expenses were more significant.

Integration expenses in the prior year primarily included non-compensation expenses such as information technology expense related to the consolidation of platforms, and professional fees related to changes in legal entity structures and the integration of clients, within both the Wealth Management and Investment Management business segments. The Company has a process to track integration-related expenses by segment which is administered by the businesses with oversight from our Financial Control group.

2

The integrations for both E*TRADE and Eaton Vance were substantially completed as of December 31, 2023. In future filings, to the extent that a material portion of the changes in compensation and/or non-compensation expenses results from a movement of integration-related expenses, the Company will discuss and quantify the amount of these expenses by business segment.

In future filings, beginning with the Form 10-Q for the quarterly period ending September 30, 2024, the Company will provide the following expanded qualitative and quantitative disclosure of integration-related expenses in response to the Staff’s comment.

Integration-related Expenses

In the nine months ended September 30, 2023, integration expenses were $244 million, of which $171 million related to the integration of E*TRADE within the Wealth Management business segment and $73 million related to the integration of Eaton Vance within the Investment Management business segment. Integration-related expenses primarily included non-compensation expenses such as information technology expense related to the consolidation of platforms, and professional fees related to changes in legal entity structures and the integration of clients, within both Wealth Management and Investment Management business segments. All integration-related activities were substantially completed as of December 31, 2023.

Form 10-Q for the Quarterly Period Ended June 30, 2024

Notes to Consolidated Financial Statements

2. Significant Accounting Policies, page 45

Comment:

3.We note you implemented certain presentation changes in the first quarter of 2024 that affected interest income and interest expense but had no effect on net interest income. Please tell us what prior period amounts and line items have been reclassified in these historical financial statements and revise your disclosures, in future filings, to provide further clarity on any reclassification changes, such as the nature, magnitude and the specific impact on affected line items in the financial statements. Refer to ASC 205-10-50-1. In addition, address the basis for your conclusion that the changes did not represent a change in accounting principle.

Response:

In the Form 10-Q for the quarterly period ended June 30, 2024, we disclosed the prior period amounts and line items that were reclassified in historical financial statements, as well as the impacted business segment – Institutional Securities – in Notes 17. Interest Income and Interest Expense (on page 75) and 19. Segment, Geographic and Revenue Information to the Consolidated Financial Statements (on page 76) which stated:

Certain prior period amounts have been adjusted to conform with the current period presentation. This adjustment resulted in a decrease to both interest income and interest expense of $1,135 million and $2,025 million for the three months and six months ended, June 30, 2023, respectively. There was no change to net interest income for the Institutional Securities segment. See Note 2 for additional information.

There was no impact to net interest amounts presented in the Equity and Fixed Income Net Revenues table within the Institutional Securities business segment discussion in Management's Discussion and Analysis on page 12 of our Form 10-Q for the quarterly period ending June 30, 2024.

In future filings, beginning with the Form 10-Q filing for the quarter ended September 30, 2024, the Company will aggregate the qualitative and quantitative disclosure relating to this adjustment in Note 2. Significant Accounting Policies to the Consolidated Financial Statements as follows and in addition we will continue to present the existing disclosures in Notes 17 and 19 to the Consolidated Financial Statements for greater prominence in response to the Staff’s comment:

3

In the first quarter of 2024, the Firm implemented certain presentation changes which resulted in a decrease to both interest income and interest expense of $1,179 million and $3,204 million for the three months and nine months ended, September 30, 2023, respectively and no effect on net interest income, with the entire impact to the Firm recorded within the Institutional Securities segment. These changes further aligned the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related customer receivables and payables that are currently accounted for as a single unit of account on the balance sheet. The current and previous presentation of these interest income and interest expense amounts are acceptable and the change does not represent a change in accounting principle. These changes were applied retrospectively to the consolidated income statement for 2023 and accordingly, prior period amounts were adjusted to conform with the current presentation.

Basis for conclusion

In response to the Staff’s request to address the Company’s basis for conclusion that the changes did not represent a change in accounting principle:

Background

The Company offers various services to prime brokerage clients in the U.S. and internationally, which include extension of margin to facilitate client’s securities purchase transactions and sourcing securities or executing other financing arrangements to cover client short positions. These transactions are typically accounted for as a single unit of account on the balance sheet, and the presentation change further aligned the presentation of prime brokerage activities within the income statement with the presentation of such activities on the balances sheet.

Accounting Analysis

A change in accounting principle is defined under ASC 250, Accounting Changes and Error Corrections as:

A change from one generally accepted accounting principle to another generally accepted accounting principle when there are two or more generally accepted accounting principles that apply or when the accounting principle formerly used is no longer generally accepted. A change in the method of applying an accounting principle also is considered a change in accounting principle.

The Company notes that these transactions are not in scope of ASC 606, Revenue from Contracts with Customers as they represent financial instruments and that there is no prescriptive U.S. GAAP guidance addressing the presentation of interest income and expense in these situations.

Furthermore, the Company referenced the nonauthoritative guidance in Deloitte & Touche’s Q&A on Accounting for Changes in Presentation 250-10-45 which states:

A Change When Guidance Is Not Prescriptive

In certain instances in which guidance is not prescriptive, we do not believe that a change in historical presentation would represent a change in accounting principle as defined under ASC 250 if the entity is able to conclude that both the previous presentation and the new presentation are acceptable. Instead, the change should be viewed as a change from one acceptable presentation to another. For example, ASC 830 is silent on the presentation of foreign currency transaction gains and losses; therefore, a change in presentation would not need to be evaluated as a change in accounting principle or an error. Although this would not be an accounting policy change, the change should be applied retrospectively, and the entity should conform the presentation of all periods presented.

4

Conclusion

Given U.S. GAAP is not prescriptive as to the presentation of these transactions, the Company concluded that both new and previous presentations are acceptable and the change accordingly, did not represent a change in accounting principle.

These changes were applied retrospectively to the income statement for 2023 and accordingly, prior period amounts were adjusted to conform with the current presentation. While the change in presentation did not impact any key financial performance measures within the Consolidated Financial Statements, the Company provided disclosure about the change in the Notes to the Consolidated Financial Statements referred to above, and in future filings plans to consolidate disclosures in Note 2. Significant Accounting Policies, as discussed above, for greater prominence.

*        *        *         *        *

Please feel free to contact Raja J. Akram at (212) 761-7707 or me at (212) 761-1632 if you would like further clarification or additional information.

Sincerely,

/s/ Sharon Yeshaya

Sharon Yeshaya

Executive Vice President and Chief Financial Officer

cc:  Raja J. Akram, Deputy Chief Financial Officer (Chief Accounting Officer)

  Eric Gros

August 14, 2024
Sharon Yeshaya
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036
Re:Morgan Stanley
Form 10-K for the Fiscal Year Ended December 31, 2023
Filed February 22, 2024
Form 10-Q for the Quarterly Period Ended June 30, 2024
Filed August 5, 2024
File No. 001-11758
Dear Sharon Yeshaya:
            We have reviewed your filing and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2023
Management's Discussion and Analysis of Financial Condition and Results of Operations
Consolidated Results - Full Year Ended December 31, 2023, page 29
1.Please tell us and revise, in future filings, to provide a specific and thorough discussion of
the severance expenses, which were primarily related to the May 2023 “employee action.”
Your disclosures should take into consideration and address the steps taken by the
Company, as well as the impact on the operating performance of the impacted segments,
geographic areas and on the consolidated level.
2.Please tell us and revise, in future filings, to provide a specific and thorough discussion of
the integration-related expenses recognized during the period. Your disclosures should
discuss each of the types of integration activities that includes those relating to
E*TRADE, the costs recognized, the segments impacted and on the consolidated level.
You should also address additional costs required to complete any planned integration-
related activities.

August 14, 2024
Page 2
Form 10-Q for the Quarterly Period Ended June 30, 2024
Notes to Consolidated Financial Statements
2. Significant Accounting Policies, page 45
3.We note you implemented certain presentation changes in the first quarter of 2024 that
affected interest income and interest expense but had no effect on net interest
income. Please tell us what prior period amounts and line items have been reclassified in
these historical financial statements and revise your disclosures, in future filings, to
provide further clarity on any reclassification changes, such as the nature, magnitude and
the specific impact on affected line items in the financial statements. Refer to ASC 205-
10-50-1. In addition, address the basis for your conclusion that the changes did not
represent a change in accounting principle.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            Please contact Lory Empie at 202-551-3714 or Marc Thomas at 202-551-3452 if you
have questions regarding comments on the financial statements and related matters. Please
contact Todd Schiffman at 202-551-3491 or James Lopez at 202-551-3536 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Finance

CORRESP
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    Davis Polk & Wardwell llp

    450 Lexington Avenue

    New York, NY 10017

    davispolk.com

April 11, 2024

    Re:
    Morgan Stanley/Morgan Stanley Finance LLC

Registration Statement on Form S-3, as amended

File Nos. 333-275587 and 333-275587-01

Request for Acceleration of Effectiveness

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-010

Attention: Madeline Mateo, Division of Corporation Finance

Ladies and Gentlemen:

This letter is sent on behalf of our clients Morgan
Stanley and Morgan Stanley Finance LLC (the “Registrants”) in connection with the Registration Statement on Form S-3, as amended
(File Nos. 333-275587 and 333-275587-01) (the “Registration Statement”).

In accordance with Rule 461 under the Securities
Act of 1933, as amended, the Registrants have previously requested acceleration of the effective date of the Registration Statement so
that it will become effective at 9:00 a.m., New York City time, on April 12, 2024, or as soon thereafter as practicable. Reference is
made to your oral comment regarding such Registration Statement, by which you noted that Morgan Stanley’s previously filed 2023
Annual Report on Form 10-K incorporated by reference its definitive proxy statement relating to Morgan Stanley’s 2024 annual meeting
of shareholders on Schedule 14A (the “Proxy Statement”) and that, therefore, in accordance with Securities and Exchange Commission
Compliance & Disclosure Interpretation #123.01, Morgan Stanley would need to file the Proxy Statement with the Securities and Exchange
Commission prior to the effective date of the Registration Statement. We hereby respond to your oral comment by noting that Morgan Stanley
filed the Proxy Statement with the Securities and Exchange Commission on April 5, 2024. The Proxy Statement is now therefore incorporated
by reference into Morgan Stanley’s 2023 Annual Report on Form 10-K and the Registration Statement.

Please contact Christopher S. Schell at (212) 450-4011
of Davis Polk & Wardwell LLP, counsel to the Registrants, if you have any questions or concerns regarding this matter.

  Very truly yours,

  /s/ Davis Polk & Wardwell LLP

CORRESP
1
filename1.htm

MORGAN STANLEY

1585 Broadway

New York, New York 10036

MORGAN STANLEY FINANCE LLC

1585 Broadway

New York, New York 10036

April 9, 2024

VIA EDGAR

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-010

Attention: Madeline Mateo, Division of Corporation Finance

 Re: Morgan Stanley/Morgan Stanley Finance LLC

Registration Statement on Form S-3, as amended

File Nos. 333-275587 and 333-275587-01

Request for Acceleration of Effectiveness

Ladies and Gentlemen:

In accordance with Rule 461 under the Securities
Act of 1933, as amended, Morgan Stanley and Morgan Stanley Finance LLC (the “Registrants”) hereby request acceleration of
the effective date of the Registration Statement on Form S-3, as amended (File Nos. 333-275587 and 333-275587-01) (the “Registration
Statement”) so that it will become effective at 9:00 a.m., New York City time, on April 12, 2024, or as soon thereafter as practicable.

Please contact Christopher S. Schell at (212) 450-4011
of Davis Polk & Wardwell LLP, counsel to the Registrants, as soon as the Registration Statement has been declared effective, or if
you have any other questions or concerns regarding this matter.

[Signature Page Follows]

  Very truly yours,

  MORGAN STANLEY

  By:
  /s/ Jeanne
  Greeley O’Regan

  Name: Jeanne Greeley O’Regan

  Title: Deputy Corporate Secretary and Counsel

  MORGAN STANLEY FINANCE LLC

  By:
  /s/ Aaron Page

  Name: Aaron Page

  Title: Secretary and Counsel

[Signature Page to Request for Acceleration of
Effectiveness]

CORRESP
1
filename1.htm

      January 26, 2021

      VIA EDGAR AND E-MAIL

      Division of Corporation Finance

      U.S. Securities and Exchange Commission

      100 F. Street, N.E.

      Washington, D.C. 20549

             Attention:

              Eric Envall

              Re:

              Morgan Stanley

            Registration Statement on Form S-4

              File No. 333-251157

      Ladies and Gentlemen:

      Pursuant to Rule 461 under the Securities Act of 1933, as amended, Morgan Stanley, a Delaware corporation (the “Registrant”), hereby requests acceleration of effectiveness of its registration statement on Form S-4 (File No. 333-251157), as
        amended, to 4:30 PM Eastern Time on January 29, 2021, or as soon as practicable thereafter.

      The Registrant hereby authorizes Brian Wolfe of Davis Polk & Wardwell LLP to orally modify or withdraw this request for acceleration.

      Please contact Brian Wolfe of Davis Polk & Wardwell LLP at (212) 450-4140 or brian.wolfe@davispolk.com with any questions you may have concerning this request, and please notify him when this request for acceleration has been granted.

              Very truly yours,

              /s/ Martin M. Cohen

              Corporate Secretary

              Morgan Stanley

              cc:

              Marc O. Williams, Davis Polk & Wardwell LLP

CORRESP
1
filename1.htm

            New York

              Northern California

              Washington DC

              São Paulo

              London
            Paris

              Madrid

              Tokyo

              Beijing

              Hong Kong

            Marc Williams

              Davis Polk & Wardwell LLP

              450 Lexington Avenue

                New York, NY 10017

              212 450 6095 tel

              212 450 6858 fax

              marc.williams@davispolk.com

    January 19, 2021

    Division of Corporation Finance

    Office of Finance

    U.S. Securities and Exchange Commission

    100 F Street, N.E.

    Washington, DC 20549-3628

            Re:

            Morgan Stanley

            Registration Statement on Form S-4

            Filed December 4, 2020

            File No. 333-251157

    Dear Sir or Madam:

    On behalf of our client, Morgan Stanley, a Delaware corporation (the “Company”), we are responding to the comment from the Staff (the “Staff”) of the Securities and
      Exchange Commission relating to the Company’s Registration Statement on Form S-4 (the “Registration Statement”) contained in the Staff’s letter dated December 21, 2020 (the “Comment

        Letter”). In response to the comment set forth in the Comment Letter, the Company has revised the Registration Statement and is submitting Amendment No. 1 to the Registration Statement (“Amendment No. 1”)

      together with this response letter. Amendment No. 1 contains certain additional updates and revisions. We are also sending, under separate cover, a copy of Amendment No. 1 and a marked copy of Amendment No. 1 showing the changes to the Registration
      Statement filed on December 4, 2020.

    Set forth below is the Company’s response to the Staff’s comment. For convenience, the Staff’s comment is repeated below in italics, followed by the Company’s response to the comment. We have included page numbers to refer to the locations in
      Amendment No. 1 where the revised language addressing the comment appears.

    Form S-4 filed December 4, 2020

    Cover Page

          1.

            Please disclose on the Cover Page and in the Question and Answer section what the cash valuation was for each Eaton Vance share as of the date prior to the announcement of the merger and as of the most
              practicable date prior to the date of the prospectus.

    Response:

    In response to the Staff’s comment, the Company has revised its disclosure on the Cover Page of Amendment No. 1 and on page 2 of Amendment No. 1 to include the requested information.

    * * *

          2

            January 19, 2021

    Please do not hesitate to contact me at (212) 450-6145, (212) 701-5843 (fax) or marc.williams@davispolk.com if you have any questions regarding the foregoing or if I can provide any additional information.

    Very truly yours,

    /s/ Marc Williams

            cc:

            Jonathan M. Pruzan, Executive Vice President and Chief Financial Officer, Morgan Stanley

            Frederick S. Marius, Vice President, Secretary and Chief Legal Officer, Eaton Vance Corp.

            Joseph B. Conahan, Wilmer Cutler Pickering Hale and Dorr LLP

            Eric P. Hanson, Wilmer Cutler Pickering Hale and Dorr LLP

United States securities and exchange commission logo
December 21, 2020
Jonathan M. Pruzan
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036
Re:Morgan Stanley
Registration Statement on Form S-4
Filed December 4, 2020
File No. 333-251157
Dear Mr. Pruzan:
            We have limited our review of your registration statement to those issues we have
addressed in our 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 by amending your registration statement and providing the
requested information.  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information you
provide in response to these comments, we may have additional comments.
Form S-4 filed December 4, 2020
Cover Page
1.Please disclose on the Cover Page and in the Question and Answer section what the cash
valuation was for each Eaton Vance share as of the date prior to the announcement of the
merger and as of the most practicable date prior to the date of the prospectus.
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            Refer to Rules 460 and 461 regarding requests for acceleration.  Please allow adequate
time for us to review any amendment prior to the requested effective date of the registration
statement.

 FirstName LastNameJonathan M. Pruzan
 Comapany NameMorgan Stanley
 December 21, 2020 Page 2
 FirstName LastName
Jonathan M. Pruzan
Morgan Stanley
December 21, 2020
Page 2
            Please contact Eric Envall at (202) 551-3234 or J. Nolan McWilliams at (202) 551-
3217 with any questions.
Sincerely,
Division of Corporation Finance
Office of Finance
cc:       Marc Williams

June 2, 2015

Via E-Mail
Jonathan Pruzan
Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, New York  10036

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31,  2014
Filed March 2 , 2014
File No. 001-11758

Dear Mr. Pruzan :

We have com pleted our review of your filing .  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are res ponsible for the
accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Kevin W. Vaughn for

Suzanne Hayes
Assistant Director

CORRESP
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CORRESP

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 27, 2015

 By U.S.
Mail & Facsimile to (703) 813-6987

 Ms. 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 Fiscal Year Ended December 31, 2014

Filed March 2, 2015

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of April 29, 2015 concerning its Annual Report on Form
10-K for the fiscal year ended December 31, 2014.

 For your convenience, we have restated your comments below.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 55

Business Segments, page 64

 Wealth Management, page 76

 1

 Comment:

1. We note your breakdown of the Investment Management segment assets under management by asset class and accompanying rollforward on page 82. Considering the
significance of the fee-based client assets managed within your Wealth Management segment, tell us how you considered providing similar disclosure for the fee-based client assets of $785 billion as of December 31, 2014 in the Wealth Management
segment as noted on page 77. As part of your response, please address the following:

•

Please revise your future filings to provide a breakdown of the Wealth Management fee-based client assets, with a reconciling rollforward of the assets within each asset class.

•

Please present the rollforwards by each asset class, and separately quantify your gross inflows and outflows, as well as distributions for a realization event, market appreciation/depreciation, and effects of
foreign currency changes, if material.

•

Please revise your rollforward for the Investment Management segment on page 82 accordingly.

•

Disclose the average fee rate by asset class for the assets managed by each segment.

Response:

 Wealth Management

The Company’s Wealth Management business segment provides brokerage and investment advisory services to individuals, businesses and
institutions. Wealth Management is not generally a manager of funds, therefore, fees earned related to fee-based client assets are more homogenous in nature with respect to asset classes than for an asset manager. Accordingly, the Company
does not believe the disclosures in respect of asset classes for the Investment Management business are meaningful for Wealth Management.

 Wealth
Management earns fees based on a contractual percentage of fee-based client assets related to certain account types, which are offered to Wealth Management clients. These fees, which the Company records in the Asset management, distribution and
administrative fees line on its income statement, are earned based on the client assets in the specific account types in which the client participates and are generally not driven by asset class. Across the account types, the fees will vary based on
both the distinct services provided within each account type and on the level of household assets under supervision in Wealth Management. The following table, using the first quarter of 2015 amounts as a basis for the example, is reflective of
the disclosure the Company intends to provide in future filings, beginning with the Company’s Form 10-Q filing for the quarterly period ending June 30, 2015 (“Second Quarter Form 10-Q”) in response to the Staff’s comments.

 2

At
Dec. 31,
2014

Inflows
(1)

Outflows
(2)

Market
Impact
(3)

At
Mar. 31,
2015

Average
Fee Rate
(4)

(dollars in billions)

(in bps)

 Separately managed accounts(5)(6)

$
[*]

$
[*]

$
[*]

$
[*]

$
[*]

[*]

 Unified managed accounts(7)

[*]

[*]

[*]

[*]

[*]

[*]

 Mutual fund advisory(8)

[*]

[*]

[*]

[*]

[*]

[*]

 Representative as advisor(9)

[*]

[*]

[*]

[*]

[*]

[*]

 Representative as portfolio manager(10)

[*]

[*]

[*]

[*]

[*]

[*]

 Subtotal

$
[*]

$
[*]

$
[*]

$
[*]

$
[*]

[*]

 Cash management(11)

[*]

[*]

[*]

[*]

[*]

[*]

 Total fee-based client assets

$
785

$
[*]

$
[*]

$
[*]

$
803

[*]

AUM—Assets under management.

 BPS—Basis points.

(1)
Inflows include new accounts, account transfers, deposits, dividends and interest.

(2)
Outflows include closed or terminated accounts, account transfers, withdrawals and client fees.

(3)
Market impact includes realized and unrealized gains and losses on portfolio investments.

(4)
Average fee rate is for the three months ended March 31, 2015.

(5)
Separately managed accounts—Accounts by which third-party asset managers are engaged to manage clients’ assets with investment decisions made by the asset manager. One third-party asset manager strategy can be
held per account.

(6)
Institutional non-custody account values reflect prior quarter-end balance due to a quarterly lag in the reporting of AUM values by custodians.

(7)
Unified managed accounts—Accounts that provide the client with the ability to combine separately managed accounts, mutual funds, and exchange-traded funds all in one aggregate account. Unified managed accounts can
be client-directed, financial advisor-directed or Company-directed (with “directed” referring to the investment direction or decision / discretion / power of attorney).

(8)
Mutual fund advisory—Accounts that give the client the ability to systematically allocate assets across a wide range of mutual funds. Investment decisions are made by the client.

(9)
Representative as advisor—Accounts where the investment decisions must be approved by the client and the advisor must obtain approval each time a change is made to the account or its investments.

(10)
Representative as portfolio manager—Accounts where a financial advisor has discretion (contractually approved by the client) to make ongoing investment decisions without the client’s approval for each
individual change.

(11)
Cash management—Accounts where the advisor provides discretionary cash management services to institutional clients whereby securities or proceeds are invested and re-invested in accordance with the client’s
investment criteria. Generally, the portfolio will be invested in short term fixed income and cash equivalent investments.

 As a
business conducted primarily in the U.S., Wealth Management’s fee-based activity is generally conducted in U.S. dollar denominated assets and strategies. As such, the effects of foreign currency changes for fee-based client assets managed
within the Company’s Wealth Management business segment are not deemed to be significant.

 3

 Investment Management

Beginning with the Second Quarter Form 10-Q filing, the Company will expand its rollforward of assets under management for the Company’s Investment
Management business segment, as requested above. The following table, using the first quarter of 2015 amounts as a basis for the example, is reflective of the expanded disclosure the Company intends to provide in future filings, beginning with the
Second Quarter Form 10-Q in response to the Staff’s comments.

At
Dec. 31,
2014

Inflows
(1)

Outflows
(2)

Distri-
butions
(3)

Market
Impact
(4)

Foreign
Currency
Impact
(5)

At
Mar. 31,
2015

Avg.
AUM
(6)

Avg.
Fee
Rate
(6)(7)

(dollars in billions)

 (in

bps)

 Traditional Asset

 Management:

 Equity

$
141

$
[*]

$
[*]

$
[*]

$
[*]

$
[*]

$
141

$
142

[*]

 Fixed income

65

[*]

[*]

[*]

[*]

[*]

65

65

[*]

 Alternatives

36

[*]

[*]

[*]

[*]

[*]

36

36

[*]

 Liquidity

128

[*]

[*]

[*]

[*]

[*]

131

127

[*]

 Managed Futures

3

[*]

[*]

[*]

[*]

[*]

3

3

[*]

 Total Traditional Asset Management

373

[*]

[*]

[*]

[*]

[*]

376

373

[*]

 Merchant Banking and Real Estate Investing

30

[*]

[*]

[*]

[*]

[*]

30

31

[*]

 Total assets under management or supervision

$
403

$
[*]

$
[*]

$
[*]

$
[*]

$
[*]

$
406

$
404

[*]

 Share of minority stake assets

7

[*]

[*]

[*]

[*]

[*]

7

7

AUM—Assets under management.

 BPS—Basis points.

(1)
Inflows represent investments or commitments from new and existing clients in new or existing investment products, including reinvestments of client dividends and increases in invested capital.

(2)
Outflows represent redemptions from clients’ funds, transition of funds from the committed capital period to the invested capital period and decreases in invested capital.

(3)
Distributions represent decreases in invested capital due to returns of capital after the investment period of a fund. It also includes fund dividends for which the client has not elected to reinvest.

(4)
Market impact includes realized and unrealized gains and losses on portfolio investments. This excludes any funds where market impact does not impact management fees.

(5)
Foreign currency impact reflects foreign currency changes for non-U.S. dollar denominated funds.

(6)
Average AUM and average fee rate is for the three months ended March 31, 2015.

(7)
The average fee rate is based on asset management and administration fees, net of waivers. It excludes performance-based fees and other non-management fees. For certain non-U.S. funds it includes the portion of advisory
fees that the Advisor collects on behalf of third-party distributors. The payment of those fees to the distributor is included in Non-compensation expenses in the Company’s condensed consolidated statements of income.

 4

*        *        *
 *        *

 In connection with responding to your comments, we acknowledge that:

•

the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
William Dorton, Staff Attorney, Securities and Exchange Commission

 Jonathan Pruzan, Executive
Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp, Deloitte & Touche LLP

Joseph B. Ucuzoglu, Deloitte & Touche LLP

Kevin W. Vaughn, Accountant Branch Chief, Securities and Exchange Commission

 5

CORRESP
1
filename1.htm

Correspondence

 May 1, 2015

Ms. 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 Fiscal Year Ended December 31, 2014

Filed March 2, 2015

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) received your letter dated April 29, 2015, concerning the Company’s Annual Report on
Form 10-K for the year ended December 31, 2014.

 We respectfully request an extension of time to respond to your letter and intend to provide our
response on or before May 27, 2015.

 Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional
information.

Sincerely,

/s/ Paul C. Wirth

 Paul C. Wirth

 Deputy Chief Financial
Officer

cc:

William Dorton, Staff Attorney, Securities and Exchange Commission

Jonathan Pruzan, Executive Vice President and Chief Financial Officer

Jeffrey M. Kottkamp, Deloitte & Touche LLP

Kevin W. Vaughn, Accountant Branch Chief, Securities and Exchange Commission

April 29, 2015

Via E-Mail
James Gorman
Chief Executive  Officer
Morgan Stanley
1585 Broadway
New York, New York  10036

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31, 2014
Filed March 2, 201 5
File No. 001-11758

Dear Mr. Gorman :

We have limited our review  of your filing  to the financial statements and related
disclosures 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 these comments  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response to these  comments, we may have  additional comments.

Management’s Discussion and Analysis of Financial Conditi on and Results of Operations, page
55

Business Segments, page 64

Wealth Management, page 76
1. We note your breakdown of the Investment Management segment assets under
management by asset class and accompanying rollforward  on page 82.  Considering the
significance of the fee -based client assets managed within your Wealth Management
segment, tell us how you considered providing similar disclosure for the fee -based client
assets of $785 billion as of December 31, 2014 in the Wealth Management segment as
noted on page 77.  As part of your response, please address the following:
 Please revise your future filings to provide a breakdown of the Wealth Management
fee-based client assets, with a reconciling rollforward of the assets within each asset
class.

James Gorman
Chief Executive  Officer
Morgan Stanley
 April 29, 2015
 Page 2

  Please present the rollforwards by each asset class, and separately quantify your gross
inflows and outflows, as well as distributions for a realization event, market
appreciation/depreciation, and effects of foreign currency cha nges, if material.
 Please revise your rollforward for the Investment Management segment on page 82
accordingly.
 Disclose the average fee rate by asset class for the assets managed by each segment.

We urge all persons who are responsible for the accu racy and adequacy of the disclosure
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 disclosure, 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

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

You may contact Michael Henderson, Staff Accountant, at (202) 551 -3364  or Kevin W.
Vaughn, Accountant Bran ch Chief,  at (202) 551 -3494  if you have questions regarding comments
on the financial statements and related matters.  Please contact William Dorton, Staff Attorney,
at (202) 551 -3107 or me at (202) 551 -3675 with any other questions.

Sincerely,

 /s/ Kevin W. Vaughn for

Suza nne Hayes
Assistant Director

August 26, 2014

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

Re: Morgan Stanley
 Annual Report on Form 10-K for the fiscal year ended December 31, 2013
Filed February 25, 2014
File No. 001 -11758

Dear Ms. Porat :

We have completed our review of your filing s.  We remind you that our comments or
changes to disclosure in response to our comments do not  foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the Unit ed States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include s the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Suzanne Hayes
Suzanne Hayes
Assistant Director

Cc: Via E -Mail
 Paul Wirth
 Deputy CFO

CORRESP
1
filename1.htm

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.

 July 25, 2014

 By U.S.
Mail & Facsimile to (703) 813-6987

 Ms. 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

 Annual Report on Form 10-K for the fiscal year ended
December 31, 2013

 Filed February 25, 2014

Quarterly Report on Form 10-Q for the quarter ended March 31, 2014

Filed May 6, 2014

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of July 3, 2014 concerning its Annual Report on Form
10-K for the fiscal year ended December 31, 2013 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (“First Quarter Form 10-Q”).

 1

 For your convenience, we have restated your comments below.

Annual Report on Form 10-K for the fiscal year ended December 31, 2013

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 52

Comment:

 1. In the questions and answers discussion for
the announcement of 2013 earnings on January 17, 2014, your CEO discussed Morgan Stanley’s goal to 10% return on equity by the end of 2014. Similarly, in the strategic update included in the 8-K filed January 17, 2014, Mr. Gorman
discussed the goal of increasing ROE for your Fixed Income & Commodities group above 10%. However, the Management’s Discussion and Analysis discussion does not discuss the actions you are taking to improve your ROE. For instance, in
earnings calls your executives described your efforts to reduce expenses with the goal of attaining a 10% ROE. In future filings, please revise this discussion to identify the goal and the actions taken and expend to take to further the goal.

Response:

 The Company will include a
discussion of the ROE goal and the actions taken and expected to be taken to further achievement of the goal in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (“Second Quarter Form 10-Q”). The Company
respectfully submits that neither the Company’s earnings presentation dated January 17, 2014, nor Mr. Gorman’s discussions during the earnings call on that day stated that the ROE goal was intended to be achieved by the end of
2014. The ability of the Company to achieve the ROE goal on a sustainable basis will be dependent on several factors, some of which are in the Company’s control, while others are not.

Beginning with the Company’s Second Quarter Form 10-Q filing, the Company will provide the following disclosure:

The Company is aiming to improve its returns to shareholders with a goal of achieving a 10% or more return on average common equity excluding
DVA, subject to the successful execution of its strategic objectives1.

 The Company
plans to progress toward achieving its Return on Equity goal through the following strategies. In the Wealth Management business, the Company plans to continue to improve profitability through cost discipline and revenue growth as reflected in a
pre-tax margin target of 22-25% by year end 2015. In the Fixed Income and Commodities businesses, the Company plans to improve its Return on Equity to more than 10% by: optimizing the Commodities business through reducing exposure to physical
commodities; pursuing, in the Fixed Income business, a more centralized decision-making process with more strategic resource allocation and a focus on expenses, leveraging technology, capital and balance sheet optimization; and continuing to reduce
risk-weighted assets. Across the entire organization, the Company plans to pursue the following: executing its overall expense reduction plan and improving expense ratios; growing earnings through Morgan Stanley-specific opportunities, particularly
with respect to deposit growth in its U.S. Banks2 and optimization of lending products; and prudently returning excess capital return to shareholders, as appropriate, and subject to regulatory
approval.

1
References to definition of DVA and non-GAAP information under Regulation G will be included in other sections of the Second Quarter Form 10-Q.

2
Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association represents the Company’s U.S. bank operating subsidiaries (“U.S. Banks”).

 2

 The Company’s Return on Equity goal and its related strategies are forward looking
statements that may be materially affected by many factors including, among other things: macroeconomic and market conditions; legislative and regulatory developments; industry trading and investment banking volumes; equity market levels; interest
rate environment; and litigation expenses. Given the uncertainties surrounding these and other factors, there are significant risks that the Company’s Return on Equity goal may not be realized, and actual results may differ from the goal and
the differences may be material and adverse. Accordingly, the Company cautions that undue reliance is not to be placed on any of these forward-looking statements. See “Forward-Looking Statements” immediately preceding Part I, Item 1,
and “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for additional information regarding these forward-looking statements. The return on average common
equity is a non-GAAP financial measure that the Company considers to be a useful measure to the Company and investors to assess operating performance.

Comment:

 2. Compensation and benefits expense is your
largest single component of non-interest expense. We note you attribute the increase in compensation expense to “higher net revenues.” Please tell us, with a view towards future disclosure, the extent to which your compensation expense is
a factor of set incentive or other contractual compensation formulae dependent on performance, including pre-determined percentages of group or company wide net revenues.

Response:

 The Company’s
compensation and benefits expense includes accruals for base salaries, formulaic programs, estimated discretionary incentive compensation, amortization of deferred cash and equity awards, changes in fair value of deferred compensation plan
referenced investments and other items such as health and welfare benefits. The factors that drive compensation for the Company’s employees vary from quarter to quarter, segment to segment, and within a segment. For certain
revenue-producing employees in the Company’s Wealth Management and Investment Management business segments, their compensation is largely paid on the basis of formulaic payouts that links their compensation to revenue. The compensation for
the Company’s remaining employees is largely fixed in nature (e.g., base salary, benefits, etc.) and for certain employees, primarily in the Company’s Institutional Securities business segment, may also include incentive
compensation that is determined following the assessment of the Company, business unit and individual performance.

 Beginning with the Second Quarter Form
10-Q filing, the Company will disclose the significant factors that drive compensation for its employees.

 3

 Income Rate Risk Sensitivity on Income from Continuing Operations, page 121

Comment:

 3. We note that you present your interest rate
sensitivity assuming a 100bp and 200bp parallel increase in the yield curve. We note that in Q1 and Q2, rates have declined in the United States. Please tell us whether the company has evaluated the impact of a short term fall in interest rates and
provide us with any downside calculations of your downside interest rate risk exposure.

 Response:

The impact of an interest rate increase or decrease on income from continuing operations is reflected in two primary components: (i) trading revenue net
of funding costs which is most relevant in the Company’s Institutional Securities business segment and is disclosed in the Company’s Value-At-Risk (“VaR”) disclosure; and (ii) non-trading net interest income, which is
principally concentrated in the Company’s U.S. bank entities and is not reflected in the VaR disclosure. It is true that long-term interest rates have declined in 2014, but the Company’s one-year projected income from continuing operations
is more sensitive to movements of short-term rates, which have remained near historical lows. As a result, we have presented the hypothetical impact on the Company’s income from continuing operations of parallel increases of 100 and 200 basis
points on the yield curve, because there are greater risks presented with a rising rate environment in today’s low interest rate environment.

 With
regards to trading revenue net of funding costs, the Company discloses the risk of losses in its portfolio as a result of multiple changes in different market prices, upward and downward movements in rates, indices, volatilities, correlation and
other market factors affecting the different market risk categories in its VaR disclosure. The Company believes that given the large number of VaR model inputs addressing different interrelated changes in asset prices as they affect the
Company’s portfolio, the best and most meaningful way to present the impact of the changes in rates and other asset prices is in this VaR disclosure.

With respect to the non-trading net interest income component, the non-trading nature of the assets and liabilities in the Company’s U.S. bank entities
means net interest income sensitivity is computed and analyzed by management for both upward and downward movements in the yield curve. As a result of the current low interest rate environment, the Company has assumed in these analyses that
short-term rates reach zero but not lower in its interest rate downward sensitivity calculations. For your information, the hypothetical sensitivity to an instantaneous 100 basis point parallel decrease in the yield curve as of March 31, 2014
is a $[*] million reduction in the one-year net interest income attributable to the Company’s U.S. bank entities.

 Beginning with the Company’s
Second Quarter Form 10-Q filing, the Company will provide supplemental disclosure related to net interest income sensitivity to an instantaneous 100 basis point increase and decrease and a 200 basis point increase in the yield curve for activities
related to its U.S. bank entities (and, depending upon levels of interest rates in the future, a 200 basis point decrease).

 4

 Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2014

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 95

Comment:

 4. In your market risk factors beginning on page
23 of the 10-K for the year ended December 31, 2013, you indicate that your business would be impacted by a decline in market rates. It appears that your operating results have increased as the overall market has increased, with higher revenue
in your brokerage departments, and other activities and assets that have increased along with the equity markets resulting in earnings growth for the first quarter. We note that you provide a sensitivity analysis of the impact of a change in market
rates on the value of some of your investments. Please tell us, with a view towards future disclosure, if you have evaluated the impact of a decline in the equity markets. For instance, if the markets declined 10% or 20% over a quarter, how would
your revenues be impacted, particularly your brokerage revenues and investment holdings?

 Response:

The Company’s First Quarter Form 10-Q includes certain disclosure to quantify the sensitivity of revenues to declines in equity markets. In the
Company’s Quantitative and Qualitative Disclosures about Market Risk included in Part 1, Item 3, the Company disclosed VaR, which aggregates the response of the Company’s market-making inventory (principally in the Company’s
Institutional Securities business segment) to individual market risk factors. VaR is attributed to multiple asset classes, including equity prices. In addition, as noted above in the staff’s comment, the Company also disclosed a sensitivity
analysis for non-trading risk in the Company’s portfolio. This sensitivity analysis included the impact of a 10% decline in the value of its investment holdings, which are predominantly equity positions with long investment horizons.

With respect to the Company’s Wealth Management and Investment Management business segments, certain fee-based revenue streams are driven by the value of
clients’ equity holdings. The overall level of revenues for those streams also depends on multiple additional factors that include, but are not limited to, the level and duration of the equity market decline, price volatility, the
geographic and industry mix of client assets, the rate and magnitude of client investments and redemptions, and the impact of such market decline and price volatility on client behavior. Therefore, overall revenues do not correlate completely
with changes in the equity markets.

 While the Company believes that VaR is the best alternative for quantifying the sensitivity of its market making
activities to equity market declines, beginning with the Company’s second quarter Form 10-Q filing, the Company will supplement its current disclosure to explain qualitatively the factors that can impact its Wealth Management and Investment
Management business segment revenues when there are declines in equity markets as described above.

 5

*            *
 *            *            *

In connection with responding to your comments, we acknowledge that:

•

the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp,
Deloitte & Touche LLP

 Christian Windsor, Special Counsel, Securities and Exchange Commission

 6

CORRESP
1
filename1.htm

Correspondence

 July 7, 2014

Ms. 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

Annual Report on Form 10-K for the fiscal year ended December 31, 2013

Filed February 25, 2014

Quarterly Report on Form 10-Q for the quarter ended March 31, 2014

Filed May 6, 2014

File No. 001-11758

 Dear Ms. Hayes:

 Morgan
Stanley (the “Company”) received your letter dated July 3, 2014, concerning the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, and the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014.

 We respectfully request an extension of time to respond to your letter and intend to provide our response on or before July 25,
2014.

 Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:

Ruth Porat, Executive Vice President and Chief Financial Officer

Jeffrey M. Kottkamp, Deloitte & Touche LLP

Christian Windsor, Special Counsel, Securities and Exchange Commission

July 3, 2014

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

Re: Morgan Stanley
 Annual Report on Form 10-K for the fiscal year ended December 31, 2013
Filed February 25, 2014
Quarterly Report on Form 10 -Q for the quarter ended March 31, 2014
Filed May 6, 2014
File No. 001-11758

Dear  Mr. Gorman :

We have reviewed your filing an d have the following comments.  In some of our
comments, we may ask you to provide us with inform ation 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.   If you do not belie ve our comments apply to your facts and circumstances, please tell
us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these  comments, we may have  additional comments.

Annual R eport on Form 10 -K for the Fiscal Year Ended December 31, 2013

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
52

1. In the questions and answers discussion for the announcement of 2013 earnings on
January 17, 201 4, your CEO discussed Morgan Stanley’s goal to 10% return on equity by
the end of 2014.  Similarly, in the strategic update included in the 8 -K filed January 17,
2014, Mr. Gorman discussed the goal of increasing ROE for your Fixed Income &
Commodities grou p above 10%.  However, the Management’s Discussion and Analysis
discussion does not discuss the actions you are taking to improve your ROE.  For
instance, in earnings calls your executives described your efforts to reduce expenses with

Ruth Porat, EVP & CFO
Morgan Stanley
July 3, 2014
 Page 2

 the goal of attainin g a 10% ROE   In future filings, please revise this discussion to
identify the goal and the actions taken and expend to take to further the goal.

2. Compensation and benefits expense is your largest single component of non -interest
expense.  We note you attr ibute the increase in compensation expense to “higher net
revenues .”    Please tell us, with a view towards future disclosure, the extent to which
your compensation expense is a factor of set incentive or other contractual compensation
formulae dependent on  performance, including pre -determined percentages of group or
company wide net revenues.

Income Rate Risk Sensitivity on Income from Continuing Operations, page 121

3. We note that you present your interest rate sensitivity assuming a 100bp and 200bp
parallel increase in the yield curve.  We note that in Q1 and Q2, rates have declined in the
United States.  Please tell us whether the company has evaluated the impact of a short
term fall in interest rates and provide us with any downside calculations of you r downside
interest rate risk exposure.

Quarterly Report on Form 10 -Q for the Quarter Ended March 31, 2014

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
95

4. In your market risk factors beginning on page 23 of the 10 -K for the year ended
December 31, 2013, you indicate that your business would be impacted by a decline in
market rates.  It appears that your operating results have increased as the overall market
has increased, with higher revenue in your broker age departments, and other activities
and assets that have increased along with the equity markets resulting in earnings growth
for the first quarter.  We note that you provide a sensitivity analysis of the impact of a
change in market rates on the value o f some of your investments.  Please tell us, with a
view towards future disclosure, if you have evaluated the impact of a decline in the equity
markets.  For instance, if the markets declined 10% or 20% over a quarter, how would
your revenues be impacted, particularly your brokerage revenues and investment
holdings?

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
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 disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Ruth Porat, EVP & CFO
Morgan Stanley
July 3, 2014
 Page 3

  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 n ot foreclose
the Commission from taking any action with respect to the filing; and

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

Please contact Christian Windsor, Special Counsel,  at (202) 551 -3419  or me at (202)
551-3675  with any other questions.

Sincerely,

 /s/ Christian Windsor,
Special Coun sel
For
 Suzanne Hayes
Assistant Director

CC:  Via E -Mail
 Paul C. Wirth
 Deputy CFO

October 17 , 2013

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

Re: Morgan Stanley
 Form 10 -K for Fiscal Year Ended December 31, 2012
 Filed February 26, 2013
 File No. 001 -11758

Dear Ms. Porat :

We have completed our review of your filing s.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all pe rsons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

  /s/ Kevin W. Vaughn

 Kevin W. Vaughn
 Accou nting Branch Chief

CORRESP
1
filename1.htm

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.

 October 15, 2013

By U.S. Mail & Facsimile to (703) 813-6987

Mr. Kevin W. Vaughn

 Accounting Branch Chief

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 Fiscal Year Ended December 31, 2012

Filed February 26, 2013

File No. 001-11758

 Dear Mr. Vaughn:

Morgan Stanley (the “Company”) is providing to the staff (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) an additional supplement (the “Supplemental Letter II”) to its letter dated September 10, 2013 (the “Supplemental Letter”) and to its original response letter, dated August 15, 2013 (the
“August 15 Response Letter”), which responded to the Staff’s comment letter dated August 2, 2013 to Ms. Ruth Porat, the Company’s Executive Vice President and Chief Financial Officer.

The Company would like to enhance its Supplemental Letter and August 15 Response Letter with the following additional information.

 1

 As noted in the Company’s August 15 Response Letter, the Company has an established process to
assess risks related to its objective of ensuring reliable published financial statements and an internal control environment designed to address these risks through entity and business level controls, which include specific disclosure and financial
statement close process controls. The Company’s program pursuant to Section 404 of the Sarbanes-Oxley Act (the “SOX Program”) was described in detail in both its August 15 and July 24, 2013 Response Letters. The SOX
Program is dynamic, incorporating the five pillars set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (1992). The Company believes those pillars are
both comprehensive and interdependent, and in order for the SOX Program to be effective, it must incorporate these aspects. As described below, the Company’s year-end analysis of all identified deficiencies includes a review to determine
pervasiveness of deficiencies as they relate to the five COSO pillars and is designed to determine whether significant deficiencies or material weaknesses exist in any of the COSO pillars or other general themes. The Company’s approach to Risk
Assessment and Monitoring Activities is described below.

 Risk Assessment

Based on its established and communicated risk and control objectives, the Company is continually assessing its risk profile to ensure that it is addressing
risk adequately and in a timely manner. The Company has in place a formal risk assessment process utilizing a firmwide, standardized risk and control taxonomy based on various factors including, but not limited to:

•

Fraud

•

Clients Profiles, Product Complexity and Business Practices

•

Business Disruption and Systems Failures

•

Execution, Delivery and Process Management

 The process is designed to identify risks to the organization and
the corresponding controls, which have been established to mitigate risks related to internal controls over financial reporting. Results of the risk assessment process are communicated to senior management responsible for identifying and
implementing a control structure designed to ensure the risk profile is in line with established standards and objectives.

 [*]

 2

 [*]

 [*]

[*]

 These aspects of risk assessment are intended to provide a
basis for evaluating changes that could significantly impact the system of internal controls over financial reporting.

 Monitoring Activities

 Based on the various risk assessment activities described above, the Company has implemented a series of independent control evaluations (i.e.,
Monitoring Activities) by the SOX Group and the Internal Audit Department aimed at identifying deficiencies in the design adequacy and/or operating effectiveness of controls established to mitigate risk associated with financial reporting.

[*]

 [*]

•

[*]

•

[*]

 3

•

[*]

•

[*]

 Information obtained from the Monitoring Activities described above is a significant source of
information that is utilized in the Company’s continual risk assessment process (i.e., identified deficiencies prompt immediate review of the current risk profile and update to the control environment).

Analysis of Identified Deficiencies

 The Company
performed a thorough analysis of all identified deficiencies that resulted from the monitoring activities noted above. The analysis included review of a number of reference publications including PCAOB Auditing Standard 5, SEC Commission
Publications defining the terms Significant Deficiency and Material Weakness and the COSO Internal Control-Integrated Framework (1992).

 [*]

[*]

 In evaluating these Risk Assessment and Monitoring
Activities deficiencies, the Company looked to preventive and detective controls, close process entity level controls and/or other monitoring activities to ensure that the risk of control failure or misstatement of financial reporting elements was
remote.

 4

 [*]

Conclusion

 [*] Accordingly, the Company believes,
after consideration of all relevant factors and information that the overall design and operation of its control framework established to meet the COSO requirements for financial reporting was effective and the Company’s Risk Assessment process
and related ongoing Monitoring Activities were functioning as intended for the periods ending December 31, 2011 and 2012.

 5

*        *        *
 *        *

 In connection with responding to the Staff’s comments with this Supplemental Letter II, the
Supplemental Letter and the Company’s August 15 Response Letter, we acknowledge that:

•

the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

/s/ Paul C. Wirth

 Paul C. Wirth

 Deputy Chief Financial
Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp,
Deloitte & Touche LLP

 James V. Schnurr, Deloitte & Touche LLP

Yolanda Trotter, Securities and Exchange Commission

 6

CORRESP
1
filename1.htm

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 10, 2013

 By
U.S. Mail & Facsimile to (703) 813-6987

 Mr. Kevin W. Vaughn

Accounting Branch Chief

 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 Fiscal Year Ended December 31, 2012

Filed February 26, 2013

File No. 001-11758

 Dear
Mr. Vaughn:

 Morgan Stanley (the “Company”) is providing to the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) a supplement (the “Supplemental Letter”) to its original response letter, dated August 15, 2013 (the “Original Response Letter”), which responded to the Staff’s comment letter dated
August 2, 2013 to Ms. Ruth Porat, the Company’s Executive Vice President and Chief Financial Officer.

 Upon clarification of comment 1 in
the Staff’s comment letter, the Company would like to supplement its Original Response Letter with the following additional information.

 The
Company’s program pursuant to Section 404 of the Sarbanes-Oxley Act (the “SOX Program”) was described in detail in both of its July 24 and August 15, 2013 response letters. The SOX Program did identify deficiencies
impacting both risk assessment and monitoring controls as those

 1

terms are defined by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (1992). The Company’s analysis of
all identified control deficiencies impacting internal control over financial reporting was performed to determine whether these deficiencies presented any pervasive or systemic themes, or individually or in the aggregate rose to the level of a
significant deficiency or material weakness. [*] Accordingly, the Company believes, after consideration of all relevant factors and information, that the overall design and operation of its control framework established to meet the COSO requirements
for financial reporting was effective for all relevant periods.

*            *
 *            *            *

In connection with responding to the Commission with this Supplemental Letter and the Company’s Original Response Letter, we acknowledge that:

•

the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp,
Deloitte & Touche LLP

 James V. Schnurr, Deloitte & Touche LLP

Yolanda Trotter, Securities and Exchange Commission

 2

CORRESP
1
filename1.htm

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.

 August 15, 2013

 By U.S. Mail & Facsimile to (703) 813-6987

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

 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 Fiscal Year Ended December 31, 2012

 Filed February 26, 2013

File No. 001-11758

Dear Mr. Vaughn:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of August 2, 2013 concerning its Form 10-K for the fiscal year ended December 31, 2012 (“2012 Form 10-K”).

 For your convenience, we have restated your comments below.

 Form 10-K for the Year Ended
December 31, 2012

 Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure, page
290

 9A – Controls and Procedures, page 290

 1

 Comment:

 1. We note your response to comment one of our letter dated July 11, 2013. In light of the multiple significant deficiencies involving multiple accounts and processes specifically identified in your
responses dated May 20 and July 24, 2013 and the fact that some relate to areas of financial reporting where errors were identified as a result of inquiries from your independent auditor, please provide further information to help us
understand how you have evaluated the controls related to the Risk Assessment and Monitoring components of COSO to identify whether control deficiencies existed. Specifically, please discuss in the context of each of the significant deficiencies
whether and how the company’s monitoring or risk assessment controls detected those deficiencies or otherwise whether each of the identified significant deficiencies are indicative of additional deficiencies in risk assessment or monitoring
controls. To the extent that deficiencies were identified, or are identified in the process of responding to our inquiry, in either of these components, please describe them and elaborate on how you have evaluated their severity.

Response:

 The
Company’s risk assessment and monitoring components are based on the foundational concepts outlined by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework
(1992) (“Integrated Framework”), where risks are assessed based on established objectives, and deficiencies in internal control are identified through ongoing monitoring procedures and evaluations (“ongoing monitoring
activities”) and separate evaluations. One of the Company’s primary objectives is to ensure preparation of reliable published financial statements in conformity with U.S. generally accepted accounting principles.

The Company has an established process to assess risks related to its objective of ensuring reliable published financial statements at the Company,
financial statement and business unit activity levels and an internal control environment designed to address these risks through entity level and business level controls, which include specific disclosure and financial statement close process
controls. Ongoing monitoring activities are built into the Company’s overall framework and include information obtained from various sources, including line and functional personnel and senior management, and may include communications from
external parties (e.g., regulators, legal counsel, independent auditors). Additionally, separate independent evaluations performed by the Company’s Internal Audit Department and independent Sarbanes-Oxley group validate the ongoing functioning
and effectiveness of internal controls. Information from these various sources is used by the Company to continually update and reassess risk and to continually implement enhanced internal controls and monitoring activities. The risk assessment,
ongoing monitoring activities and separate evaluations components of the Company’s overall framework noted above are in accordance with the COSO Integrated Framework.

 The Company believes that its risk assessment process, which is continually updated, functioned properly in appropriately identifying risks relevant to financial reporting. Based on that risk assessment,
the Company put in place internal controls and related ongoing monitoring activities that were effective [*].

 2

 [*]

 As disclosed on page 132, “Quantitative and Qualitative Disclosures about Market Risk—Credit Risk—Institutional Securities Activities—Credit Exposure—Corporate Lending”
(“Credit Exposure—Corporate Lending”) section of the Form 10-Q for the quarter ended March 31, 2012, “…effective April 1, 2012, the Company began accounting for all new ‘relationship-driven’ and
‘event-driven’ loans and lending commitments as either held for investment or held for sale.” Given that loan activity became a more integral part of the Company’s business, subsequent to it becoming a financial holding company
(“FHC”), the Company’s risk assessment, control processes and ongoing monitoring activities were aligned with this transition in accounting. [*] It should be noted, that since becoming a FHC, the Company continuously monitors and
evaluates its financial statement presentation to align it with banking industry peers, where appropriate.

 [*]

[*]

 [*]

[*]

 [*]

 3

 Income Taxes

 [*]

 [*]

 As a result of the comprehensive review, together with the enhancement of certain tax internal controls and increased ongoing monitoring activities, the Company detected additional errors and made certain
adjustments in its financial statements for the fourth quarter of 2012 which have been previously disclosed to you in our February 15, 2013 response, and in the Income Taxes note to the consolidated financial statements and in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Summary—Significant Items—Income Tax Items” section of the 2012 Form 10-K.

CTA

 In the second quarter of
2012, the Company identified an error related to CTA that pertained to the incorrect application of hedge accounting on certain derivative contracts previously designated as net investment hedges of certain foreign subsidiaries. [*]

[*] As noted in our May 20, 2013 response letter, subsequent to the identification of

 4

the hedge accounting error, the Company appropriately redesignated derivative contracts and reapplied net investment hedge accounting. [*]

Consolidated Statement of Cash Flows

 [*]

 [*] As noted in the Company’s response to comment 3 in its letter dated May 20,
2013, the presentation error within the consolidated statement of cash flows did not impact consolidated net income, comprehensive income, earnings per share, total equity, or the statement of financial condition; therefore, from an earnings or
financial condition perspective, the presentation error was not material in any respect.

 [*]

Conclusion

 The Company believes
that it maintained an appropriate and effective risk management framework and effective ongoing monitoring activities and separate evaluations related to identified risks that captured the deficiencies noted in this letter in a timely manner [*].
The Company’s conclusion, which is noted in its response to comment 3 in its letter dated May 20, 2013, [*] it maintained effective internal controls over financial reporting and disclosure controls and procedures for all relevant periods.
[*]

 5

 [*] based on the consideration of all the relevant factors and information, the Company believes that
its framework was effective for all relevant periods. The Company also believes that, based on the facts and circumstances as indicated above, any enhanced control or ongoing monitoring activities enacted during the relevant periods did not
materially affect, nor are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 The Company
did not discover any additional control deficiencies or errors as a result of responding to the Staff’s inquiries.

 6

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at (212) 761-6686 if you would like further clarification or
additional information.

 Sincerely,

/s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp, Deloitte & Touche LLP

 James V. Schnurr,
Deloitte & Touche LLP

 Yolanda Trotter, Securities and Exchange Commission

 7

August 2 , 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, 2012
 Filed February 2 6, 2013
 File No. 001 -11758

Dear Ms. Porat:

We have reviewed your response letter dated July 24 , 2013,  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 request ed 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 belie ve our
comments apply to your facts and circumstances or do not believe 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, includi ng the draft of your proposed disclosures, we may have
additional comments.

Form 10 -K for the Year Ended December 31, 2012

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure, page 290

9A – Controls and Proced ures, page 290

1. We note your response to comment  one of our letter dated  July 11, 2013 .  In light of the
multiple significant deficiencies involving multiple accounts and processes specifically
identified in your responses dated May 20 and July 24, 2013  and the fact that some relate

Ruth Porat
Morgan Stanley
August  2, 2013
Page 2

 to areas of financial reporting where errors were identified as a result of  inquiries from
your independent auditor, please provide further information to help us understand how
you have evaluated the controls related to the Risk Assessment and Monitoring
components of COSO to identify whether control deficiencies existed.   Specifically,
please discuss in the context of each of the significant deficiencies whether and how the
company’s monitoring or risk assessment controls detected those deficiencies or
otherwise whether each of the identified significant deficiencies are indi cative of
additional deficiencies in risk assessment or monitoring controls.   To the extent tha t
deficiencies were identified , or are identified in the proce ss of responding to our inquiry ,
in either of these components, please describe them and elaborate on how you have
evaluated their severity.

You may contact Yolanda Trotter  at (202) 551 -3472  or me at (202) 551 -3494 with any
questions .

Sincerely,

        /s/ Kevin W. Vaughn

Kevin W. Vaughn
Accounting Branch Chief

CORRESP
1
filename1.htm

CORRESP

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 24, 2013

 By U.S. Mail & Facsimile to (703) 813-6987

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

 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 Fiscal Year Ended December 31, 2012

 Filed February 26, 2013

Form 10-Q for the Quarterly Period Ended March 31, 2013

Filed May 7, 2013

 File No. 001-11758

 Dear Mr. Vaughn:

Morgan Stanley (the “Company”) is pleased to respond to your letter of July 11, 2013 concerning its Form 10-K for the fiscal year ended
December 31, 2012 (“2012 Form 10-K”) and Form 10-Q for the quarterly period ended March 31, 2013 (“First Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

 Form 10-K for the Year Ended
December 31, 2012

 Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial

 1

 Disclosure, page 290

9A – Controls and Procedures, page 290

 Comment:

 1. We note your responses to comments 2 and 3 of our letter dated May 6,
2013. In light of the multiple significant deficiencies involving multiple accounts and processes, please explain the extent to which you considered whether deficiencies existed in other components of the Committee of Sponsoring Organizations of the
Treadway Commission Internal Control Framework (COSO), such as the control environment, information and communication, risk assessment, and monitoring. To the extent any deficiencies existed in these components, please tell us how you evaluated the
severity of these deficiencies along with the existing significant deficiencies and other control deficiencies.

 Response:

 Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 and
2011. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (1992), which incorporates the five
COSO pillars of Control Environment, Risk Assessment, Control Activities, Information and Communication, and
Monitoring1.

The assessments were performed, in large part, utilizing the Company’s program pursuant to Section 404 of the Sarbanes-Oxley Act
(“SOX”) that incorporates processes designed to prevent and/or detect control deficiencies impacting internal controls over financial reporting. These processes include: entity level controls; business unit level controls; information
technology controls; disclosure controls; detailed independent testing; and active engagement by the Company’s senior management and Audit Committee in control related matters. These processes are designed to enable the Company to identify
control deficiencies, assess their actual and potential impact, analyze compensating controls and mitigating factors and enhance the control environment by tactically and strategically mitigating the risks that could lead to the inaccurate
preparation of financial statements.

 The control environment as established by the Company’s senior management and Board of Directors,
influences the overall control consciousness of the Company, and serves as the foundation for the Company’s control framework. That framework, embedded in the Company’s SOX program includes various information and communication features
that are designed to ensure that employees understand the importance of internal control and have clear guidance regarding the evaluation and testing of control effectiveness, and information systems incorporate controls that provide assurance that
data processing produces reliable information. Specifically, formal control activities are documented in the form of policies, procedures and controls and a signoff/certification by process owners is required under the SOX program. Policies and
procedures also include

1
 See also SEC Release Nos. 33-8810; 34-55929, Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting
Under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and SEC Release Nos. 33-8238; 34-47986, Management’s Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic
Reports for a discussion of the COSO internal control framework.

 2

information on implementing controls as part of the overall business process and communication by the Company’s senior management of the importance of a strong internal control
environment. Monitoring of control activities is achieved through testing of internal controls over financial reporting by an independent SOX Group (a separate Finance Group reporting through the CFO organization) and Internal Audit.
Communications of testing results is made to the Company’s senior management and quarterly updates are provided to the Audit Committee (e.g., scoping, results of testing, analysis of deficiencies, status of remediation of deficiencies, etc.).
Risk assessment within the SOX program occurs via identification and documentation of risks and controls by business owners, a top down, risk-based approach to scoping used as the basis for the testing program and evaluation of identified
deficiencies in line with the Company’s deficiency risk rating process based on a standardized set of Company-wide criteria. [*]

 [*]

 Form 10-Q for the quarter ended March 31, 2013

 Note 11 – Derivative Instruments and Hedging Activities, page 60

 Comment:

 2. We note that you presented the disclosures required by paragraphs ASC 210-20-50-3(a) through 50-3(e) by how the derivative is
transacted on pages 61-62. Given the magnitude of your gross derivative positions and the significant amount of netting against those positions, please tell us why you elected not to further disaggregate such disclosures by derivative type, similar
to Example 3 within ASC 210-20-55-22, and similar to types listed in the table on page 64.

 Response:

As indicated on page 61 in the First Quarter Form 10-Q, in connection with its derivative activities, the Company generally enters into master netting
agreements and collateral agreements with its counterparties. These agreements provide the Company with the right, in the event of a default by the counterparty (such as bankruptcy or a failure to pay or perform), to net a counterparty’s rights
and obligations under the agreement and to liquidate and setoff collateral against any net amount owed by the counterparty. The tables on pages 61-62 in the First Quarter Form 10-Q provide information

 3

about the offsetting of derivative instruments and related collateral amounts when there is an enforceable master netting agreement and/or collateral agreement.

Accounting Standards Codification (“ASC”) 210-20-50-2 requires that “an entity shall disclose information to enable users of its financial
statements to evaluate the effect or potential effect of netting arrangements on its financial position” and ASC 210-20-55-18 further clarifies that “an entity should present the disclosures in a manner that clearly explains to users of
its financial statements the nature of rights of setoff and related arrangements and their effect on the entity’s assets and liabilities.” Counterparty and collateral offsetting is not applied at the individual derivative contract level,
rather it is applied across all derivative contracts under a legally enforceable master netting agreement with an individual counterparty. A master netting agreement may include derivatives across multiple risk types and most collateral agreements
are based on the net portfolio position for derivatives covered by a master netting agreement. Therefore, it is not possible to allocate counterparty and collateral offsetting benefits by derivative risk type under a single master netting agreement
in accordance with the terms of the master netting agreement and collateral agreement. If the tables on pages 61-62 in the First Quarter Form 10-Q were to be disaggregated by risk type, any counterparty or collateral offsetting benefit presented in
the table would need to be allocated on a pro-rata basis to the various risk types in cases where a master netting agreement relates to derivative contracts across multiple risk types. Due to the application of an allocation methodology that would
be arbitrary and inconsistent with the contractual terms of the master netting agreement and collateral agreement, the Company believes that it would not be useful to present the offsetting amounts in the tables on pages 61-62 in the First Quarter
Form 10-Q by risk type and that such presentation would be inconsistent with the requirements of ASC 210-20-50-2 and 210-20-55-18.

Furthermore, the tables on pages 64-65 in the First Quarter Form 10-Q present gross fair values and notionals for derivatives by risk type. The Company
will revise its disclosure in the Form 10-Q for the quarterly period ended June 30, 2013 (“Second Quarter Form 10-Q”) filing to include a footnote following the tabular offsetting disclosure that cross-references to the table
containing gross fair values and notionals for derivatives by risk type.

 Comment:

3. Furthermore, we note that the gross amounts within the tabular presentation disclosed on pages 44 and 61 includes all instruments, irrespective of
whether there is a legally enforceable master netting arrangement in place. Given that the scope of the disclosures in ASC 210-20-50-1(d) are only applicable to certain financial instruments that are offset in accordance with ASC 210-20-45 and ASC
815-10-45 and those that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with either Section 210-20-45 or Section 815-10-45, please separately quantify
the amount of derivatives included within your tabular disclosure that are not subject to an enforceable master netting arrangement. Additionally, please revise your disclosure in future filings to describe any common features or counterparties to
these types of derivative contracts where you do not have an “enforceable” master netting arrangement, and clarify whether these derivatives are risk managed any differently than the derivatives that are subject to “enforceable”
master netting arrangements.

 4

 Response:

 ASC 210-20-55-10a states “an entity also may elect to include all recognized derivatives accounted for in accordance with Topic 815,
including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements and securities borrowing and securities lending transactions in the scope of paragraph 210-20-50-1 to reconcile to the individual line-item amount(s)
presented in the statement of financial position. For instruments not subject to an enforceable master netting arrangement or similar agreement, the amounts disclosed in accordance with paragraph 210-20-50-3(a) would equal the amounts disclosed for
those instruments in accordance with both paragraph 210-20-50-3(c) and paragraph 210-20-50-3(e).” In accordance with this paragraph, the

Company elected to include all derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending
transactions in the gross amounts presented in the respective tables on pages 44 and 61 in the First Quarter Form 10-Q. For amounts not subject to an enforceable master netting agreement, the amounts disclosed in the ‘Gross Amounts’ column
equal the amounts disclosed for those instruments in the ‘Net Amounts Presented in the Condensed Consolidated Statements of Financial Condition’ and ‘Net Exposure’ columns.

For further clarity, beginning with the Second Quarter Form 10-Q filing, the Company will separately quantify and disclose the gross amount of
derivatives and securities financing agreements not subject to an enforceable master netting agreement.

 As indicated on page 61 in the First
Quarter Form 10-Q, the Company generally enters into master netting agreements and collateral agreements with its derivative counterparties; however, in certain circumstances it may not have such arrangements. The Company will enhance its existing
disclosure in its Second Quarter Form 10-Q filing to state that in certain circumstances even when a master netting agreement or collateral agreement is in place, the relevant insolvency regime, which is based on the type of entity and the
jurisdiction of organization of the counterparty, may not support the legal enforceability of the agreement, or the Company may not have sought legal advice to support the enforceability of the agreement. In cases where the Company has not
determined an agreement to be enforceable, the related amounts are not offset in the tabular disclosures. The Company will also clarify that the enforceability of the master netting agreement is taken into account in the Company’s risk
management practices and application of counterparty credit limits.

 Comment:

 4. Furthermore, you indicate in footnote (2) on pages 44 and 61 that amounts offset in the condensed consolidated statements of financial condition relate to master netting arrangements and
collateral arrangements. It is not clear how the description in footnote (2) reconciles with its use on the columns titled Financial Instruments Not Offset in the Condensed Consolidated Statements of Financial Condition on page 44 or Financial
Instruments Collateral or Other Cash Collateral on page 61. In future filings please separately quantify the amount related to collateral arrangements or revise your footnotes accordingly.

Response:

 Amounts
disclosed in the column titled ‘Amounts Offset in the Condensed Consolidated Statements of Financial Condition’ represent amounts that have been offset in the condensed consolidated statements of financial condition because they relate to
master netting agreements and collateral

 5

agreements which have been determined by the Company to be legally enforceable in the event of default as well as because certain other accounting criteria required by ASC 210-20-45 and ASC
815-10-45, respectively, are met.

 Amounts disclosed in the column titled ‘Financial Instruments Not Offset in the Condensed Consolidated
Statements of Financial Condition’ on page 44 and the column titled ‘Amounts Not Offset in the Condensed Consolidated Statements of Financial Condition’ on page 61 represent amounts that have not been offset in the condensed
consolidated statements of financial condition because, although they relate to master netting agreements and collateral agreements which have been determined by the Company to be legally enforceable in the event of default, the other accounting
criteria required by ASC 210-20-45 and ASC 815-10-45, respectively, have not been met.

 Beginning with the Second Quarter Form 10-Q filing,
the Company will clarify the descriptions in the relevant footnotes as per the above points.

*    *    *    *    *

In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at (212) 761-6686 if you would like further clarification or
additional information.

Sincerely,

 /s/ Paul C.
Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice

July 11 , 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, 2012
 Filed February 2 6, 2013
 Form 10 -Q for the Quarterly Period Ended March 31, 201 3
 Filed May 7, 2013
 File No. 001 -11758

Dear Ms. Porat:

We have reviewed your response letter dated May 20, 2013,  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 providing the request ed
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 belie ve our comments apply to your
facts and circumstances , please tell us why in your response.

After reviewing the information you provide in response to these comments, includi ng
the draft of your proposed disclosures, we may have additional comments.

Form 10 -K for the Year Ended December 31, 2012

Item 9 – Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure, page 290

9A – Controls and Proced ures, page 290

1. We note your responses to comments 2 and 3 of our letter dated May 6, 2013.  In light of
the multiple significant deficiencies involving multiple accounts and processes, please
explain the extent to which you considered whether deficiencies existed  in other
components of the Committee of Sponsoring Organizations of the Treadway Commission

Ruth Porat
Morgan Stanley
July 11 , 2013
Page 2

 Internal Control Framework ( COSO ), such as the control environment, in formation and
communication,  risk assessment , and monitoring .  To the extent any deficiencies existed
in these components, please tell us how you evaluated the severity of these deficiencies
along with the existing significant deficiencies and other  control deficiencies.

Form 10 -Q for the quarter ended March 31, 2013

Note 11 – Derivative Instruments and Hedging Activities, page 60

2. We note that you presented the disclosures required by paragraphs ASC 210-20-50-3(a)
through 50 -3(e) by how the derivative is transacted on pages 61 -62.   Given the
magnitude of your gross derivative positions and the significant amoun t of netting against
those positions, please tell us why you elected not to further disaggregate such
disclosures by derivative type, similar to Example 3 within ASC 210 -20-55-22, and
similar to types listed in table on page 64.

3. Furthermore, we note that  the gross amounts within the tabular presentation disclosed on
pages 44 and 61 includes all instruments, irrespective of whether there is a legally
enforceable master netting arrangement in place.  Given that the scope of the disclosures
in ASC 210 -20-50-1(d) are only applicable to certain financial instruments that are offset
in accordance with ASC 210 -20-45 and ASC 815 -10-45 and those that are subject to an
enforceable master netting arrangement or similar agreement, irrespective of whether
they are offs et in accordance with either Section 210 -20-45 or Section 815 -10-45, please
separately quantify the amount of derivatives included within your tabular disclosure that
are not subject to an enforceable master netting arrangement.  Additionally, please revis e
your disclosure in future filings to describe any common features or counterparties to
these types of derivative contracts where you do not have an “enforceable” master netting
arrangement, and clarify whether these derivatives are risk managed any diffe rently than
the derivatives that are subject to “enforceable” master netting arrangements

4. Furthermore, you indicate in footnote (2) on pages 44 and 61 that amounts offset in the
condensed consolidated statements of financial condition relate to master net ting
arrangements and collateral arrangements.  It is not clear how the description in footnote
(2) reconciles with its use on the columns titled Financial Instruments Not Offset in the
Condensed Consolidated Statements of Financial Condition on page 44 or  Financial
Instruments Collateral or Other Cash Collateral on page 61.  In future filings please
separately quantify the amount related to collateral arrangements or revise your footnotes
accordingly.

You may contact Yolanda Trotter  at (202) 551 -3472  or me at (202) 551 -3494 with any
questions .

Ruth Porat
Morgan Stanley
July 11 , 2013
Page 3

 Sincerely,

        /s/ Kevin W. Vaughn

Kevin W. Vaughn
Accounting Branch Chief

CORRESP
1
filename1.htm

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.

 May 20, 2013

 By U.S. Mail & Facsimile to (703) 813-6987

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

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 Fiscal Year Ended December 31, 2012

Filed February 26, 2013

File No. 001-11758

 Dear
Mr. Vaughn:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of May 6, 2013 concerning its Form 10-K
for the fiscal year ended December 31, 2012 (“2012 Form 10-K”).

 For your convenience, we have restated your comments below.

 Form 10-K for Fiscal Year Ended December 31, 2012

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

 1

 Business Segments, page 63

 Institutional Securities Income Statement Information, page 66

 2012 compared with
2011, page 68

 Comment:

1. We note that advisory revenues from merger, acquisition, and restructuring transactions were $1,369 million in 2012, a decrease of 21% from 2011,
reflecting lower completed market volumes. Please consider revising your future filings to disclose industry-specific trends such as market volumes and volatilities.

         Response:

 Beginning with the
Company’s Form 10-Q filing for the quarterly period ended June 30, 2013, the Company will provide specific disclosure related to industry trends for merger, acquisition, and restructuring transactions, where applicable.

Item 9A. Controls and Procedures

Comment:

 2. We note on page 153 that
during the third quarter of 2012 you identified activities related to certain loans that had been reported as cash flows from operating activities that should have been presented as cash flows from investing activities. As a result, you corrected
the previously presented cash flows for these loans and in doing so, the consolidated statements of cash flows for 2011 and 2010 were adjusted to increase net cash flows from operating activities by $9.2 billion and $0.3 billion, respectively, with
corresponding decreases in net cash flows from investing activities. You have also indicated that you have evaluated the effect of the incorrect presentation, both qualitatively and quantitatively, and concluded that it did not have a material
impact on, nor require amendment of, any previously filed annual or quarterly consolidated financial statements. Please address the following:

•

 Explain to us the nature of the loan activities that you identified to support the reclassification of the related cash flows from operating activities
to investing activities.

•

 Tell us how the identification and correction of this error impacts your conclusion on the effectiveness of your disclosure controls and procedures and
internal control over financial reporting as of December 31, 2011.

•

 Tell us how and by whom this error was identified.

•

 Tell us the nature of the controls that have been put in place to remediate this error and prevent similar errors from re-occurring. Tell us when those
controls were implemented and tested. Please reconcile the implementation of these controls with

 2

your conclusion on page 292 that no change in your internal controls over financial reporting occurred during the quarter ended December 31, 2012 that materially affected, or is reasonably
likely to material affect, your internal control over financial reporting.

•

 Please provide us with your SAB 99 materiality analysis that supports your conclusion that the incorrect presentation is not material to previously
reported periods.

         Response:

The Company originates loans in its Institutional Securities and Global Wealth Management Group business segments that may be originated with the
intent to sell or with the intent to hold. Pursuant to Accounting Standards Codification (“ASC”) 230-10-45, cash flows associated with loans with the intent to sell should be reported as operating activities for statement of cash flow
reporting purposes. Cash flows associated with loans with the intent to hold should be reported as investing activities for statement of cash flow reporting purposes.

 During the third quarter of 2012, it was identified that activities related to certain loans that had been reported as cash flows from operating activities should have been presented as cash flows from
investing activities. This cash flow presentation error was caused by an oversight of loan reporting requirements during a period when loan activity became a more integral part of the Company’s business, subsequent to it becoming a Financial
Holding Company (“FHC”). The presentation error was identified by the Company as a result of an inquiry from the Company’s independent auditor. The Company evaluated the impact of the cash flow presentation error on the Company’s
financial reporting for all relevant periods, and concluded that it had maintained effective disclosure controls and procedures and internal controls over financial reporting for all such periods, including December 31, 2011. [*] Please refer
to responses 3 and 4 for further information regarding the assessment of the control deficiency and the enhanced controls that have been put in place to remediate this error and prevent similar errors from re-occurring as well as the Company’s
conclusion on the effectiveness of its disclosure controls and procedures and internal controls over financial reporting for all relevant periods.

 The Company concluded that the correction of the cash flow presentation error did not constitute a material change in the context of the overall consolidated financial statements for all relevant periods.
In reaching this conclusion, the Company considered both quantitative and qualitative analyses as required by ASC 250-10-S99, formerly Staff Accounting Bulletins Nos. 99 and 108, Materiality (“SAB 99”) in relation to the
consolidated financial statements. The Company noted that the presentation error within the consolidated statements of cash flows did not impact net income, comprehensive income, earnings per share, total equity, or the balance sheet; therefore,
from an earnings and financial condition perspective, the presentation error was not material in any respect. As it relates to cash flow activities, the Company evaluated the impact that this

 3

presentation error had on the consolidated statement of cash flows and the individual line items affected, and again concluded that the changes were not material.

[*]

 [*]

Therefore, on a quantitative basis, the Company does not believe that the presentation error is such that it is probable that the judgment of a
reasonable investor relying upon the consolidated financial statements would have been changed or influenced by the correction of the presentation of the cash flow amounts.

 4

 5

 6

 The Company considered other factors including whether or not the presentation error would be material from
a qualitative perspective. In order to make this determination, the Company looked to the indicators specified in SAB 99. These indicators largely focus on whether or not the presentation error impact earnings, segment reporting, covenants and
contractual requirements, management compensation or concealment of an unlawful transaction. The presentation error on the consolidated statement of cash flows would not be considered material within any of the qualitative indicators specified in
SAB 99 as discussed below:

1)
Does the misstatement arise from an item of precise measurement or from an estimate with a significant degree of imprecision inherent in the estimate?

 No. The presentation error is not the result of amounts that require significant judgment in their measurement.
The amounts relate to the classification of cash advanced and cash received on loans.

2)
Does the misstatement mask a change in earnings or other trends?

 No. This presentation error does not impact the Company’s net income, nor mask any other trends.

3)
Does the misstatement hide a failure to meet analysts’ consensus expectations for the enterprise?

No. The presentation error does not impact net income and therefore does not impact analysts’ consensus expectations for Morgan
Stanley. Further, the Company does not believe that analysts view the consolidated statements of cash flows or the net amounts impacted by this presentation error as a basis for consensus expectations.

4)
Does the misstatement change a loss into income or vice versa?

 No. The presentation error does not change a loss into income or vice versa as the presentation error does not impact net income.

5)
Does the misstatement concern a segment or other portion of the registrant’s business that has been identified as playing a significant role in the
registrant’s operations or profitability?

 No. The presentation error does not impact segment reporting
as cash flows are presented on a consolidated basis.

6)
Does the misstatement affect the registrant’s compliance with regulatory requirements?

No. The presentation error does not affect our compliance with any regulatory requirements. The Company does not have any regulatory
requirements which are based on the net cash flow items nor the individual line items in the consolidated statements of cash flows which have been

 7

reclassified. The Company’s regulatory requirements are generally based on capital levels, which were not impacted by the presentation error within the consolidated statements of cash flows.

7)
Does the misstatement affect the registrant’s compliance with loan covenants or other contractual requirements?

No. The presentation error has no impact on any loan covenants or other contractual requirements. The Company does not have any covenants
or other contractual requirements which are based on the net cash flow items nor the individual line items.

8)
Does the misstatement have the effect of increasing management’s compensation?

No. The presentation error would not have affected management’s compensation. Management compensation is not based on any cash flow
measures.

9)
Does the misstatement involve concealment of an unlawful transaction?

 No. The presentation error relates to the grouping of discrete cash flow movements for presentation in the consolidated statement of cash flows. It does not pertain to any particular transaction or
involve an intentional presentation error or a concealment of an unlawful activity.

 In addition, the presentation error did not impact
liquidity, capital or cash balances of the Company. Further, it is the Company’s view that since this presentation error does not affect earnings, cash flow trends or business trends, it would not have resulted in reasonable investors,
securities analysts, rating agencies and other constituents changing an existing published view of the Company’s results.

 Comment:

 3. Please explain how you assessed that the combination of the various errors, and control deficiencies that permitted the errors to
occur, did not affect your conclusion that your disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2012 and 2011. Specifically, given the error on the statement of cash flows, the
out-of-period pre-tax gain of $109 million due to the incorrect application of hedge accounting on certain derivative contracts previously designated as net investment hedges of certain foreign subsidiaries as discussed on page 219, and the out of
period net tax provision of $157 million resulting from an overstatement of deferred tax assets as discussed on page 265, as well as any other deficiencies that you may have identified, tell us how your conclusion regarding the effectiveness of your
disclosure controls and procedures and internal control over financial reporting as of December 31, 2012 and December 31, 2011 was not affected.

 Response:

 [*]

 8

 [*]1 [*]

 The
Company considered indicators individually and in the aggregate for all of its control deficiencies that are referenced in SEC Release Nos. 33-8810; 34-55929, Commission Guidance Regarding Management’s Report on Internal Control Over
Financial Reporting Under Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial
Statements.[*]

•

 [*]

•

 [*]

•

 [*]

•

 [*]

1
[*]

 9

•

 [*]

 In addition, the
Company performed certain control process enhancement activities related to the errors noted in 2012. [*]

 [*]

Aside from the dollar amount of the errors, the Company considered in that determination, among other factors that the errors were identified by the
Company, did not result from fraud, and were not the result from ineffective oversight of the Company’s overall financial reporting or internal controls. In addition, given the immaterial impact of the errors, and the determination that overall
internal controls that had been in place were effective during 2012 and 2011, it was not considered reasonably possible that a material error could go undetected by the existing, and further enhanced control processes.

Given the errors are financial in nature, the disclosure controls and procedures in the consolidated financial statements are the same controls and
procedures that the Company has in place to ensure that the internal control over financial reporting in this area is effective. The term disclosure controls and procedures is defined as controls and other procedures of an issuer that are designed
to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities and Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the
Commission’s rules and forms. In SEC Release No. 33-8124, 34-46427, the Commission stated that the term disclosure controls and procedures has a different definition from internal control over financial reporting because of the
Commission’s desire to have senior officers certify material non-financial information in addition to financial information in annual and quarterly reports. In SEC Release Nos. 33-8238; 34-47986, the Commission acknowledged that there is
substantial overlap between a company’s disclosure controls and procedures and its internal control over financial reporting. As such, there is a considerable overlap of the two evaluations, and the analysis above relating to the Company’s

 10

internal control over financial reporting applies equally to the evaluation of its disclosure controls and procedures during or at the end of, any of the affected reporting periods of 2012 and
2011, respectively.

 Comment:

4. As noted above, you state on page 292 that there has been no change to your internal control over financial reporting that occurred during the quarter
ended December 31, 2012 that materially affected, or is reasonably likely to materially affect, your internal control over financial reporting. Tell us how you considered the various new controls and related processes implemented as a result of
the errors identified and corrected during the period. As part of your response, please tell us any new controls and processes put into place to prevent these types of errors from recurring in the future and tell us when they were put into place and
tested for you to view them as operating effectively as of December 31, 2012.

        Response:

 [*] The Company believes that it maintained effective internal controls over financial reporting for all relevant periods and there has been no change to its internal control over financial repor

May 6, 2013

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

Re: Morgan Stanley
 Form 10-K for the Fiscal Year Ended December 31, 2012
Filed February 26, 2013
File No. 001 -11758

Dear Ms. Porat:

We have reviewed your filing an d 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.   If you do not believe our comments apply to your fact s and circumstances or do not
believe 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, we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2012

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

Business Segments, page 63

Institutional Securities Income Statement Information, page 66

2012 compared with 2011, page 68

1. We note that advisory revenues from merger, acquisition, and restructuring transactions
were $1,369 million in 2012, a decrease of 21% from 2011, reflecting lower completed
market volumes.  Please consider revising your future filings to disclose industry -specific
trends such as market volumes and volatilities.

Ruth Porat
Morgan Stanley
May 6, 2013
Page 2

 Item 9A.  Controls and Procedures

2. We note on page 153 that during the third quarter of 2012 you identified activities related
to certain loans that had been re ported as cash flows from operating activities that should
have been presented as cash flows from investing activities.  As a result, you corrected
the previously presented cash flows for these loans and in doing so, the consolidated
statements of cash flo ws for 2011 and 2010 were adjusted to increase net cash flows from
operating activities by $9.2 billion and $0.3 billion, respectively, with corresponding
decreases in net cash flows from investing activities.  You have also indicated that you
have evaluat ed the effect of the incorrect presentation, both qualitatively and
quantitatively, and concluded that it did not have a material impact on, nor require
amendment of, any previously filed annual or quarterly consolidated financial statements.
Please addre ss the following:

 Explain to us the nature of the loan activities that you identified to support the
reclassification of the related cash flows from operating activities to investing
activities.

 Tell us how the identification and correction of this error impacts your conclusion on
the effectiveness of your disclosure controls and procedures and internal control over
financial reporting as of December 31, 2011.

 Tell us how and by whom this error was identified.

 Tell us the nature of the controls t hat have been put in place to remediate this error
and prevent similar errors from re -occurring.  Tell us when those controls were
implemented and tested.  Please reconcile the implementation of these controls with
your conclu sion on page 292 that no chang e in your internal controls over financial
reporting occurred during the quarter ended December 31, 2012 that materially
affected, or is reasonably likely to material affect,  your internal control over financial
reporting.

 Please provide us with your SAB  99 materiality analysis that supports your
conclusion that the incorrect presentation is not material to previously reported
periods.

3. Please explain how you assessed that the combination of the various errors, and control
deficiencies that permitted  the errors to occur, did not affect your conclusion that your
disclosure controls and procedures and internal control over financial reporting were
effective as of December 31, 2012 and 2011.  Specifically, given the error on the
statement of cash flows, the out -of-period pre -tax gain of $109 million due to the
incorrect application of hedge accounting on certain derivative contracts previously
designated as net investment hedges of certain foreign subsidiaries as discussed on page
219, and the out of peri od ne t tax provision of $157 million  resulting from an

Ruth Porat
Morgan Stanley
May 6, 2013
Page 3

 overstatement of deferred tax assets as discussed on page 265, as well as any other
deficiencie s that you may have identified,  tell us how your conclus ion regarding the
effectiveness  of your disclosure  controls and procedures and internal control over
financial reporting as of December 31, 2012 and December 31, 2011 was not a ffected.

4. As noted above, you state on page 292 that there has been no change to your internal
control over financial reporting  that occurred during the quarter ended December 31,
2012 that materially affected, or is reasonably likely to materially affect, your internal
control over financial reporting.  Tell us how you considered the various new controls
and related processes imp lemented as a result of the errors identified and corrected during
the period.  As part of your response, please tell us any new controls and processes put
into place to prevent these types of errors from recurring in the future and tell us when
they were put into place and tested for you to view them as operating effectively as of
December 31, 2012.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information t he 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 disclosure, 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

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

You may contact Yolanda Trotter at (202) 551-3472 or me at (202) 551 -3494 with any
questions.

Sincerely,

 /s/ Kevin W. Vaughn

Kevin W. Vaughn
Accounting Branch Chief

CORRESP
1
filename1.htm

Martin M. Cohen

Managing Director

1221 Avenue of the Americas

New York, NY 10020

marty.cohen@morganstanley.com

March 7, 2013

By EDGAR & Email

Ms. Amy M. Starr

Chief

Office of Capital Markets Trends

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Mail Stop 4561

Washington, DC  20549

Re:

Morgan Stanley

424 Prospectuses relating to Registration Statement on Form S-3ASR

Filed November 21, 2011

File No. 333-178081

Dear Ms. Starr:

Morgan Stanley is pleased to respond to your letter of February 21, 2013 concerning its 424 Prospectuses relating to Registration Statement on Form S-3ASR Filed November 21, 2011.

Morgan Stanley is in the process of finalizing its processes and communications with clients regarding its proposed disclosure.  Morgan Stanley confirms that it will comply promptly with the comments set forth in your letter and in your prior letter with respect to its future prospectuses.

This is to acknowledge that (a) Morgan Stanley is responsible for the adequacy and accuracy of the disclosure in the filings, (b) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and (c) Morgan Stanley may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please feel free to contact me at 212-762-5777 if you would like further clarification or additional information.

Sincerely,

/s/ Martin M. Cohen

Martin M. Cohen

Managing Director and Corporate Secretary

cc:

Raquel Fox, Securities and Exchange Commission

Maria Douvas-Orme, Managing Director (212-762-4888)

Elisha Tuku, Executive Director (212-762-5511)

February 25 , 2013

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

Re: Morgan Stanley
 Form 10 -K for Fiscal Year Ended December 31, 2011
 Filed February 27, 2012
 File No. 001 -11758

Dear Ms. Porat :

We have completed our review of your filing s.  We remind you that our comments or
changes to disclosure in response to our comments do not foreclose the Commissi on from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the di sclosure in the filing s to be certain that the filing s include the
information the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

 /s/ Suzanne Hayes
 Suzanne Hayes
 Assistant Director

February 21, 2013

Via E -mail
Martin M. Cohen
Counsel and Secretary
Morgan Stanley
1585 Broadway
New York, New York 10036

Re: Morgan Stanley
424 Prospectuses relating to Registration Statement on Form S -3ASR
Filed November 21, 2011
File No. 333 -178081

Dear Mr. Cohen:

We have reviewed certain of your prospectus supplements for structured note offerings
and your response s to our letter dated April 12, 2012  and considered our subsequent discussions
with you.  We  have a number  of comments  that we have identified below .  Please respond to this
letter within ten business days confirm ing to us that you will comply with our comments  in this
letter and in our prio r letter  in your future prospectus supplements or explaining why you believe
the comment is not appropriate .  Please note that it is possible that we may have additional
comments  on the prospectus supplements you file in the future .

Pricing and Value of Structured Notes

We believe that, similar to the requirements of Regulation S -K Items 201, 501, and 505
for equity securities, the method by which the price of the structured note being offered is
determined through evaluation of its components and the value of such compon ents should be
described, particularly since the price and value of the structured note are not readily
determinable from public information regarding your outstanding debt obligations.  In our
discussions, you have described the components of the public o ffering price of the structured
note and the issuer’s or its affiliates’ estimate of the value of the structured note.  Since you or
your affiliates  develop these valuations, we believe that it is important for investors to
understand the difference betwee n the original issue price of a structured note and its value as
estimated by you or your affiliate  in structuring the note and determining its pricing (the
“issuer’s valuation”).

Martin M. Cohen
Morgan Stanley
February 21 , 2013
Page 2

 Issuer’s Valu ation

In order to clarify the disclosure for investors about the pricing and market value of the
securities, w e believe you should prominently disclose, together with the price of the structured
note as required by Item 501 of Regulation S -K, the issuer’s valuation  of the structured note  on
the cover page of t he prospectus.  We believe that investors should be able to understand the
difference between the issuer’s valuation and the original issue price that they are paying for the
structured note.  In order for investors to understand this difference in a clear  manner , we believe
the issuer’s valuation that is disclosed should not include hedging costs (except in one limited
circumstance described below), underwriting discounts or commissions and other transaction
costs.   In a typical structured note offering, w e believe that t he disclosed  issuer’s valuation
should consist of a single number that is comprised of the sum of the issuer’s valuation of the
two components  of the structured note: (1) the fixed income bond and (2) the embedded
derivative (s).  As discuss ed below, information about hedging and other costs also may be
disclosed.

You may use n arrative disclosure  to explain how you derive the issuer’s valuation  of the
structured note.   For instance, if you include narrative disclosure, you could disclose that the
issuer’s valuation is determined by using internal pricing models .  In that case, it may be
appropriate to narratively describe the pricing models and the relevant inputs and as sumptions
used in such models.  As discussed below, narrative disclosure should include a discussion of the
risks inherent in your valuation  methodology and related assumptions .

It is our understanding that t he value of the fixed income bond  component of the issuer’s
valuation  may reflect either (i) an interest rate that you determine you are willing to pay to issue
similar debt securities (known as an “internal funding rate”) or (ii) an interest rate that reflects
your secondary market credit spread s.  We understand that the internal funding rate may
represent a discount from your secondary market credit spreads.  We have observed that issuers
typically use an internal funding rate in calculating the value of the fixed income bond in order to
account for h igher issuance, operational and ongoing management costs of structured notes in
comparison to those costs for conventional fixed -rate debt, which is generally issued at an
interest rate that reflects secondary market credit spreads .  If the inter nal fundin g rate is used , we
believe that you should include appropriate disclosure to describe how the use of an internal
funding rate, rather than secondary market credit spreads , impacts the issuer’s valuation of the
structured note.  In addition, we believe that  you should discuss in appropriate risk factor
disclosure the risks that arise because this  difference affects the value of the structured note at
issuance as compared to the price of the structured note in the secondary market.

Martin M. Cohen
Morgan Stanley
February 21 , 2013
Page 3

 We have observed  that when issuers value the embedded derivative component , they use
valuation models that have  various inputs.   To develop these valuation models, issuers use traded
market prices on comparable derivative instruments to derive the inputs for their embedded
derivativ e valuation models ( customarily called “mid -market inputs”).  These inputs can be used
to estimate the value of other embedded derivatives that offer terms s imilar to the comparable
traded derivative instruments.   For structured notes, issuers generally ma ke adjustments to the
mid-market inputs to estimate the value of a n embedded  derivative that does not have an
observable market price .  Such inputs are generally determined in the same manner for financial
statement  reporting  purposes.   If you do not use m id-market inputs, we believe you should
disclose this fact, describe what you use, and  the risk that the embedded derivative is being
valued differently than other similar derivatives .

In addition, except in one limited circumstance noted below, we  believe the disclosed
valuation of the embedded derivative should not include “hedging costs” or other “transaction
costs” of you or your affiliates arising from the issuance of the notes.  We have observed that
some issuers may use only a bidding process  with unaffiliated third parties rather than internal
pricing models to value the embedded derivative in the structured note .  If you do not bid  out the
pricing of the embedded derivative to an unaffiliated third party  or you use an internal pricing
model to value the embedded derivative for any reason , the value of the embedded derivative
should not include  any hedging and other transaction costs  of you or your affiliates .  These costs
should not be included because they are costs to you as the issuer sepa rate from the value of the
embedded derivative component.  If you (i)  bid out the pricing of the embedded derivative to an
unaffiliated third party as the sole method of valuing the embedded derivative,  (ii) do not use any
internal pricing model to value t he embedded derivative for any reason and (iii) disclose in your
prospectus that you will engage in the derivative transaction with such unaffiliated third party,
then you may use the unaffiliated third party’s bid for valuing the embedded derivative .  We
understand that the unaffiliated third party’s bid  may already include their hedging costs.   In this
limited  circumstance, your disclosure should indicate that the issuer’s valuation includes the
unaffiliated third party’s estimated hedging costs as part o f its bid price for the embedded
derivative .

Other Costs or Amounts

In addition to the disclosure of the issuer’s valu ation , we believe that as part of your
pricing disclosures you  should include narrative disclosure to explain (i) the fees, costs and other
amounts that you add to the issuer’s valu ation  to calculate the original issue price of the
structured notes and (ii) whether those amounts received from investors are used or retained by
you or  an affiliate .  As appropriate, you may quantify such disclosed fees, costs and other
amounts.

Martin M. Cohen
Morgan Stanley
February 21 , 2013
Page 4

 Timing

Consistent with Securities Act Rule 159, w e believe that informatio n about the issuer’s
valuation  should be conveyed to investors prior  to the time of sale so that they can make an
informed investment decision.  If the structured notes are marketed using a preliminary
prospectus  or preliminary term sheet, and you use a ra nge of the initial offering price or pricing
terms of the structured notes in such materials, then we understand you may also have developed
a range of the issuer’s valuation  of the structured notes , which also should be disclosed .  In
addition , you should  provide sufficient disclosure in the preliminary prospectus or preliminary
term sheet so that investors can assess the correlation between the range of the original issue
price and the range of the issuer’s valuation .

Risk Factors

Depending upon the facts and circumstances of a particular offering, the p rospectuses for
your structured note offerings may need to include risk factor disclosure1 relating to the pricing
and valuation of the structured notes , as applicable, including:

 the risk that the  issuer’s valu ation  will be less than the original issue price ;
 risks arising from the fact that the embedded derivative is not valued using mid -market
inputs ;
 risks to the effect that the use of an internal funding rate, rather than secondary market
credit s preads, may result in a value of the structured note at issuance that is different
from the price of the structured note in the secondary market;
 the risk that secondary market prices will likely be lower than the original issue price
because secondary ma rket prices (i) take into account your secondary market credit
spreads and (ii) exclude your costs of hedging your obligation on the notes, underwriting
discounts and commissions and other transaction costs ;
 any risks arising from the manner in which customer account statement values after
issuance are determined and why these values may be temporarily higher than the
secondary market values of the notes;
 the factors that may affect secondary market prices such as changes in market conditions,
your cre ditworthiness, and customary bid/ask spreads for similarly sized trades; and
 any conflicts of interest arising from the determination of the structured note price, the
issuer’s valuation, or the sale of the structured notes by an affiliate of the issuer.

1  See Item 503 of Regulation S -K.

Martin M. Cohen
Morgan Stanley
February 21 , 2013
Page 5

 Secondary M arket

We note that prospectuses disclose that the issuer or its affiliates  may, but are not
obligated to, make a secondary market in the structured notes.  We have observed that
immediate ly following the issuance of structured  notes, where t here is disclosure that issuers or
their affiliates may repurchase the notes, the price at which the issuer or its affiliates  may
initially repurchase structured notes may exceed the issuer’s valuation, the secondary market
price of the notes , and the valu e of these notes on customer account statements.  We understand
that this temporary difference may occur because the repurchase price may include
“reimbursement ” of (i) amounts that the issuer will not be using to hedge its future exposures on
the notes, a nd (ii) other amounts that  the issuer  added to the issuer’s valuation  to determine  the
price of the notes  at initial issuance.

If applicable, w e believe that you should disclose why  the price at which you  or your
affiliates may  initially repurchase the notes may exceed the secondary market price for the notes.
We also believe that you should disclose whether investors will always receive a higher
repurchase price immediately after the issuance of the notes or whether it is discretionary.
Further, s ince the  time period  for the temporary price difference  is typically determined at the
time of the  initial pricing of the notes, you should disclose such time period  and the reason for
choosing the time period .  We have observed that sometimes this time pe riod is referred to as an
“amortization” period.  However, we believe this terminology may confuse investors.  Instead,
we believe you should use clear disclosure to explain to investors the reason for the potential
temporary difference between the repurch ase price, the issuer’s valuation, the secondary market
price, and if applicable, the value on customer account statements.

If you have any questions regarding these comments, please contact me or Raquel Fox at
(202) 551 -3860.

  Sincerely,

  /s/ Amy  Starr
  Amy Starr
Chief
Office of Capital Markets Trends
Division of Corporation Finance

CORRESP
1
filename1.htm

Corresp

 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.

 February 15,
2013

 By U.S. Mail & Facsimile to (703) 813-6983

 Ms. 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 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. Hayes:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of January 18, 2013 concerning its Form 10-K for the fiscal year ended December 31, 2011 (“2011 Form 10-K”), the April 5, 2012 Definitive Proxy Statement (“2012
Proxy Statement”), the Form 10-Q for the

 1

quarterly period ended March 31, 2012 (“First Quarter Form 10-Q”), the Form 10-Q for the quarterly period ended September 30, 2012 (“Third Quarter Form 10-Q”) and
the Current Report on Form 8-K dated January 18, 2013.

 For your convenience, we have restated your comments below.

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

 Comment:

 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 did 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.

 Response:

Beginning with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (“2012 Form 10-K”), the
Company will include a statement that it has been subject to security breaches and cyber attacks. The Company will revise its disclosures as follows (changes marked from the 2011 Form 10-K):

Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer
systems. If one or more of such events occur, this potentially could Like other financial services firms, we have been and continue to be subject to unauthorized access, mishandling or misuse, computer viruses or malware,
cyber attacks and other events that. Events such as these could have a security impact on such our systems If one or more of such events occur, this potentially could and
jeopardize our or our clients’ or counterparties’ personal, confidential, proprietary or other information processed and stored in, and transmitted through, our computer systems. Furthermore, such events could cause interruptions or
malfunctions in our, our clients’, our counterparties’ or third parties’ operations, which could result in reputational damage, litigation or regulatory fines or penalties not covered by insurance maintained by us, and adversely
affect our business, financial condition or results of operations.

 Country Risk Exposure, page 118

Comment:

 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 include 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

 2

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. For 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.

 Response:

The Hedges column represents all CDS positions executed by the Counterparty Portfolio Management Desk (“CPM”) and the Portfolio
Management Group (“PMG”). CPM and PMG are responsible for hedging counterparty and lending credit risk exposures for the Company, respectively. Accordingly, CDS positions executed by CPM and PMG are identified as hedges in the Country Risk
exposure table.

 The Net Inventory column includes CDS positions executed by all other trading desks at the Company. As a
market maker, the Company transacts in these CDS positions to facilitate client trading.

 Index credit derivatives are included
in the Country Risk exposure tables. Each reference entity within an index is allocated to that reference entity’s country of risk. Index exposures are allocated to the underlying reference entities in proportion to the notional weighting of
each reference entity in the index, adjusted for any fair value receivable or payable for that reference entity.

 Tranched
credit derivatives and hedges are excluded from the Country Risk exposure tables because such exposures at a reference entity-level are not comparable to other exposures in the table. These exposures are not additive due to the contingent
nature of the risks in these products. For example, a purchase of protection on a 0-3% equity tranched credit derivative will only provide protection to the first 3% of defaults in the underlying portfolio and therefore adding exposures to all the
reference entities within that portfolio to the Country Risk exposure tables will lead to overstatement. Tranched credit derivative exposures are closely managed under the Company’s market risk limit framework, which includes country limits
based on credit spread sensitivities. In addition exposures are continually monitored using stress scenarios.

 Where credit
risk crosses multiple jurisdictions, for example, a CDS purchased from an issuer in a specific country (e.g., Germany) which references bonds issued by another entity (e.g., Greece), the fair value of the CDS is reflected in the Net
Counterparty Exposure column based on the country of the issuer (e.g., Germany). Further, the notional amount of the CDS adjusted for the fair value of the receivable/payable is reflected in the Net Inventory column based on the country of
the reference entity (e.g., Greece).

 Beginning with the 2012 Form 10-K, the Company will make appropriate amendments in
the footnotes to the Country Risk Exposure table to clarify the nature of CDS that are included in the Net Inventory and Hedges columns. The Company will also quantify the amounts related to single name and index credit derivatives included in the
Net Inventory column. Further, the Company will enhance its disclosures to discuss how exposures related index credit derivatives and CDS where credit risk crosses multiple jurisdictions are computed and/or presented in the Country Risk exposure
tables.

 3

 Comment:

 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 implications 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.

 Response:

 Indirect exposures are identified through the credit evaluation process and may result in a reclassification of country
risk. Stress testing is based on the exposure’s country of risk, therefore, both direct and indirect risks are captured within stress tests. Examples of significant stress testing parameters are described below.

The Company’s periodic stress testing seeks to measure the impact of shocks stemming from negative economic or political scenarios.
These stress test scenarios may include a country exit from the Eurozone and possible contagion effects when deemed appropriate by the Company’s risk managers. The stress tests also consider second order risks such as the impact for core
European banks of their peripheral exposures.

 The Company conducts legal and documentation analysis of its exposures to
counterparties in peripheral jurisdictions to identify the risk that such exposures could be redenominated into another currency or subject to capital controls in the case of a country exit from the Eurozone. This analysis, and results of the stress
tests, may result in the amendment of limits or exposure mitigation.

 Beginning with the 2012 Form 10-K, the Company will
revise its disclosures as follows (changes marked from the Third Quarter Form 10-Q):

 Country risk exposure is the risk that
events within a country, such as currency crisis, regulatory changes and other political events, will adversely affect the ability of the sovereign government and/or obligors within the country to honor their obligations to the Company. Country risk
exposure is measured in accordance with the Company’s internal risk management standards and includes obligations from sovereign governments, corporations, clearinghouses and financial institutions. The Company actively manages country
risk exposure through a comprehensive risk management framework that combines credit and market fundamentals and allows the Company to effectively identify, monitor and limit country risk. Country risk exposure before and after hedges is monitored
and managed.

 4

 The Company’s obligor credit evaluation process may also identify indirect
exposures whereby an obligor has vulnerability or exposure to another country or jurisdiction. Examples of indirect exposures include mutual funds that invest in a single country, offshore companies whose assets reside in another
country to that of the offshore jurisdiction and finance company subsidiaries of corporations. Indirect exposures identified through the credit evaluation process may result in a reclassification of country risk.

The Company conducts periodic stress testing that seeks to measure the impact on the Company’s credit and market exposures of
shocks stemming from negative economic or political scenarios. When deemed appropriate by the Company’s risk managers, the stress test scenarios include country exit from the Eurozone and possible contagion effects. Second order risks such as
the impact for core European banks of their peripheral exposures may also be considered. The Company also conducts legal and documentation analysis of its exposures to obligors in peripheral jurisdictions, which are defined as exposures in Greece,
Ireland, Italy, Portugal and Spain to identify the risk that such exposures could be redenominated into new currencies or subject to capital controls in the case of country exit from the Eurozone. This analysis, and results of the stress tests, may
result in the amendment of limits or exposure mitigation.

 Note 22. Income Taxes, page 244

Comment:

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

•

 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 disproportionate 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.

 Response:

 In addition to the response the Company provided in the letter dated July 26, 2012, the Company would like to further note that Morgan Stanley is a global financial services firm that, through its
subsidiaries and affiliates, conducts its business around the world including its principal overseas

 5

operations in the United Kingdom, Japan and Hong Kong (previously referred to as locations where the Company “routinely operates”). These regional hub locations generally account for
the majority of the Company’s Non-U.S. earnings, and similarly, the income tax provision associated with these jurisdictions also generally accounts for the majority of the Company’s Non-U.S. income tax provision. Additionally, the
effective tax rates associated with earnings in these jurisdictions are not dissimilar to the effective tax rate associated with the Company’s domestic operations due to either comparable local statutory tax rates or, in certain years, the
Company’s treatment of these Non-U.S. earnings as available for repatriation (i.e., not permanently reinvested).

 There have been periods
when a discrete item in relation to one of these jurisdictions has had a material impact on the consolidated effective tax rate, but in those periods the item and its impact have been separately disclosed in the footnote below the effective tax rate
table.

 Beginning with the 2012 Form 10-K, the Company will revise its disclosure to provide the Non-U.S. jurisdictions that contributed a
material amount to the tax provision to warrant separate disclosure in the current and deferred provision table by including the United Kingdom, Japan and Hong Kong in the table and by providing a footnote to the table for any other significant
jurisdictions.

 Further, beginning with the 2012 Form 10-K, the Company will revise its disclosure to clarify the extent to which the Non-U.S.
earnings line item within the Company’s tax rate reconciliation includes the impact on the Company’s effective tax rate due to changes in enacted foreign tax rates, changes in the Company’s determination that certain unremitted
foreign earnings are reinvested indefinitely, and changes in the amount of foreign earnings derived from jurisdictions with tax rates different from the Company’s U.S. tax rate.

 Definitive Proxy Statement on Schedule 14A

 Comment:

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 statement 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 determining 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 draft disclosure as it would have appeared in your

CORRESP
1
filename1.htm

Correspondence

 January 22, 2013

 Ms. 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 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. Hayes:

 Morgan Stanley (the
“Company”) received your letter dated January 18, 2013, concerning the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, the April 5, 2012 Definitive Proxy Statement, the Form 10-Q for the
quarterly period ended March 31, 2012, the Form 10-Q for the quarterly period ended September 30, 2012 and the January 18, 2013 Form 8-K.

 We respectfully request an extension of time to respond to your letter and intend to provide our response on or before February 15, 2013.

 Please feel free to contact me at (212) 761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

 Jeffrey M. Kottkamp, Deloitte & Touche LLP

 James V. Schnurr, Deloitte &
Touche LLP

 Ramin M. Olson, Securities and Exchange Commission

Michael Seaman, Securities and Exchange Commission

 Staci Shannon, Securities and Exchange Commission

 Kevin W. Vaughn, Securities and
Exchange Commission

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

CORRESP
1
filename1.htm

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.

 July 26, 2012

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

 Ms. 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 Fiscal Year Ended December 31, 2011

 Filed February 27, 2012

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

 Filed May 7, 2012

File No. 001-11758

 Dear Ms. Hayes:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of June 22, 2012 concerning its Form 10-K for the fiscal year ended December 31, 2011 (“2011 Form 10-K”),
the April 5, 2012 Definitive Proxy Statement (“2012 Proxy Statement”) and the Form 10-Q for the quarterly period ended March 31, 2012 (“First Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

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

 Item 1A. Risk Factors

 We are subject to operational risk that could adversely
affect our businesses, page 24

 Comment:

 1. We note that you are subject to operational risk, including potential vulnerability to “unauthorized access, mishandling or misuse, computer viruses or malware, cyber attacks and other events that
could have a security impact on ‘your computer’ systems.” Furthermore, we note reports that the prevalence of cyber attacks have increased in your industry. If you have experienced any of these or other cyber incidents in the past,
beginning with your next Form 10-Q, please state that fact in order to provide the proper context for your risk factor disclosure. Please refer to the Division of Corporation Finance’s Disclosure Guidance Topic No. 2 at
http://www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm for additional information.

 Response:

 The Company considered Disclosure Guidance Topic No. 2 in preparing this risk factor disclosure. Disclosure Guidance Topic No. 2
states that a registrant may need to include a “description of cyber incidents experienced by the registrant that are individually, or in the aggregate, material.…” The Company has not experienced any cyber incident that was material,
individually or in the aggregate. However, the Company will continue to monitor cyber incidents, including any computer viruses or malware, cyber attacks and other similar attacks, and evaluate the need for disclosure based on materiality, taking
into account the Staff’s guidance provided in Disclosure Guidance Topic No. 2.

 Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Stock Performance Graph, page 43

Comment:

 2. It appears that your
presentation of the S&P 500 Stock Index and the S&P 500 Financials Index does not assume the reinvestment of dividends (cumulative total shareholder return) as required by Item 201(e) of Regulation S-K. Please confirm that future
performance graphs will present cumulative total shareholder return for the indices.

 Response:

Beginning with the Company’s 2012 Annual Report on Form 10-K, the Company’s performance graphs will present cumulative total return for the
indices.

 2

 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Net Revenues, page 57

 Comment:

 3. You disclose that you record gains and losses related to investments associated with certain employee deferred compensation plans in Principal Transactions – Trading and Principal Transactions
– Investments. Please revise your disclosure in Management’s Discussion and Analysis or the Notes as appropriate to address the following:

•

 Quantify the amount of compensation tied to the performance of investments held in your principal transaction portfolio;

•

 More clearly describe the relationships between how compensation is calculated and the gains/losses absorbed on the referenced investments;

•

 To the extent that the compensation expense and investment gain/losses offset, clarify whether this is always the case, and if not, describe the
circumstances where compensation and gains/losses would not offset; and

•

 Discuss the extent to which the employee does not bear the full gain/loss of the referenced investment portfolio due to guarantees that you provide in
the compensation arrangement.

 Response:

The Company plans to clarify the relationship between the deferred compensation investment performance and compensation expense. Beginning
with the Company’s Form 10-Q for the quarterly period ended June 30, 2012 (“Second Quarter Form 10-Q”) filing, the Company will revise its disclosure as follows (changes marked from the First Quarter Form 10-Q):

Principal Transactions—Trading. Principal transactions—Trading revenues include revenues from customers’ purchases
and sales of financial instruments in which the Company acts as a market maker and gains and losses on the Company’s related positions. Principal transactions—Trading revenues includes the realized gains and losses from sales of cash
instruments and derivative settlements, unrealized gains and losses from ongoing fair value changes of the Company’s positions related to market-making activities, and gains and losses related to investments associated with certain employee
deferred compensation plans. In many markets, the realized and unrealized gains and losses from the purchase and sale transactions will include any spreads between bids and offers. Certain fees received on loans carried at fair value and dividends
from equity securities are also recorded in this line item since they relate to market-making positions. Commissions received for purchasing and selling listed equity securities and options are recorded separately in the Commissions and fees line
item. Other cash and derivative instruments typically do not have fees associated with them and fees for related services would be recorded in Commissions and fees.

 3

 The Company often invests directly, as a principal, in investments or other financial
instruments to economically hedge its obligations under its deferred compensation plans. Changes in value of such investments made by the Company are recorded in Principal transactions—Trading and Principal transactions—Investments.
Expenses associated with the related deferred compensation plans are recorded in Compensation and benefits. Compensation expense is calculated based on the notional value of the award granted, adjusted for upward and downward changes in fair value
of the referenced investment and is recognized ratably over the prescribed vesting period for the award. Generally, changes in compensation expense resulting from changes in fair value of the referenced investment will be offset by changes in fair
value of investments made by the Company. However, there may be a timing difference between the immediate revenue recognition of gains and losses on the Company’s investments and the deferred recognition of the related compensation expense over
the vesting period.

 Compensation expense will not include any offsets for cost of capital and other administrative
charges associated with the investments made by the Company. The Company’s deferred compensation plans do not provide investment performance guarantees to employees related to the referenced investments.

Historically, the deferred compensation plan expense resulting from the changes in the fair value of the referenced investment has not
been material to the Company’s Principal transactions trading and investment revenue or to the Company’s total compensation expense. If this amount was to become material in future periods, the Company will reevaluate the
appropriate disclosures.

 Critical Accounting Policies, page 79

 Goodwill and Intangible Assets, page 80

 Comment:

4. Please revise your disclosure in future filings to state, if true, that each of your reporting units has a fair value that is substantially in excess
of carrying value. If that is not true, please revise your disclosure in future filings to include the following disclosures for each reporting unit that is at risk of failing step one of your goodwill impairment test:

•

 The percentage by which fair value exceeded carrying value as of the date of the most recent test.

•

 A discussion of the methods and key assumptions used in your impairment analysis and how the key assumptions were determined.

 4

•

 A discussion of the degree of uncertainty associated with the key assumptions, and how those assumptions were determined. The discussion regarding
uncertainty should provide specifics to the extent possible (e.g., the valuation model assumes recovery from a business downturn within a defined period of time).

•

 Description of specific, potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions
and outcome.

 Response:

 Beginning with the Second Quarter Form 10-Q filing, the Company will include a statement on whether each of its reporting units which currently have goodwill has a fair value that is substantially in
excess of carrying value. In the event a reporting unit’s fair value is not substantially in excess of the carrying value, the Company will include in future filings the disclosures requested above. As of December 31, 2011 and
March 31, 2012, each of the Company’s reporting units with goodwill had a fair value that was substantially in excess of carrying value.

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 Risk
Management, page 100

 Comment:

 5. Please expand your discussion to explain the interactions among the various committees and groups responsible for monitoring risk and clarify how information relating to risks is communicated up to
senior management and the Board of Directors. For example, we note that with respect to market risk, the business units and trading desks ensure that the risks are measured monitored and made transparent to senior management. Additionally, we note
that the Market Risk Department is responsible escalating risk concentrations to senior management. How is this information conveyed to the Board of Directors?

 Response:

 The Company disclosed on pages 100 and 101 of its 2011 Form 10-K the
Company’s risk management framework, including the members and responsibilities of the Firm Risk Committee and its reporting obligations to the full Board of Directors, the Audit Committee of the Board, the Operations and Technology Committee
of the Board and the Risk Committee of the Board. In addition, the Company respectfully submits that with respect to market risk management, the Company disclosed on page 102 of its 2011 Form 10-K that “the various business units and trading
desks are responsible for ensuring that market risk exposures are well-managed and prudent. The control groups help ensure that these risks are measured and closely monitored and are made transparent to senior management.” As such, it is the
risk management control groups within the Company that ensure market risks are monitored closely. In response to the Staff’s comment, the Company will provide the following disclosure in its Annual Report on Form 10-K for the year ending
December 31, 2012 (“2012 Form 10-K”):

 The Chief Risk Officer, who reports to the Chief Executive Officer and
the Risk Committee of the Board of Directors, among other things, monitors market risk through the Market Risk Department, which reports to the Chief Risk Officer and is independent of the business units, and has close interactions with senior
management and the risk management control groups in the business units. The Chief Risk Officer is a member of the Firm Risk Committee, chaired by the Chief Executive Officer, which includes the most senior officers of the Company, and regularly
reports on market risk matters to this committee as well as the Board of Directors and its Risk Committee.

 5

 VaR Methodology, Assumptions and Limitations, page 104

Comment:

 6. We note your disclosure that
your Value-at-Risk (VaR) model evolves over time in response to changes in the composition of trading portfolios and to improvements in modeling techniques and systems capabilities. We further note that you are committed to continuous review and
enhancement of VaR methodologies and assumptions in order to capture evolving risks associated with changes in market structure and dynamics. Please respond to the following and expand your disclosure in future filings as appropriate:

•

 Tell us the number of different VaR models that are used to determine your total trading VaR, and discuss the drivers regarding the need to use
multiple different models.

•

 Tell us how all of the different VaR models used are aggregated to arrive at your total trading VaR as well as the individual market risk categories
disclosed. For example, clarify whether you simply aggregate the outputs from the different models or whether adjustments are made, and if so, how the adjustments are determined.

•

 Clarify whether your stress VaR (S-VaR) scenarios use all of the base VaR models with more stressed assumptions or if you use different models than
your unstressed VaR scenarios. To the extent that different models are used to capture that risk, please tell us the drivers as to why.

•

 Tell us whether the VaR models used for regulatory capital purposes are the same as the VaR models used for your market risk disclosures. To the extent
that certain of the models used for both purposes differ, please tell us the drivers behind those differences.

•

 Discuss the process and validation procedures in place prior to implementing significant model and assumption changes. For example, discuss the
approval process required, back-testing procedures performed, and periods of parallel model runs before implementation.

 6

•

 To the extent that all or some of your VaR models used for your market risk disclosures are different than those used to calculate regulatory capital,
please tell us whether the model review process and model oversight processes are the same for both. As part of your response, please clarify when approval is required from any of your regulators regarding VaR model changes.

•

 Given that your VaR models are evolving over time, tell us how you consider when disclosure is required under Item 305(a)(1)(iii)(4) of Regulation
S-K regarding model, assumptions and parameter changes.

 Response:

The Company has one VaR model and uses that VaR model to estimate the probability distribution of its trading portfolio’s profit/loss over a 1-day
risk period. From such estimated probability distribution, a measure of loss at a 95% or 99% statistical confidence level is calculated. At its most general level, the VaR model uses historical simulation of general market risk factors (i.e.,
one-day changes, observed or simulated, of market prices/rates) and Monte Carlo simulations of certain specific risk factors, such as corporate issuer-specific credit risk factors.

 The VaR model is complex and consists of a collection of a) statistical and econometric methodologies, b) input data on positions (i.e., market risk exposures) and market risk factors, c) specific
associations between positions and market risk factors (i.e., position to risk factor mappings) and d) quantitative methods for simulation of risk factors, calculation of profit/loss of positions and aggregation of profit/loss across positions to
calculate the profit/loss of the Company’s portfolio.

 The Company’s usage of the model for the various types of market risks
reflects its assessment of the model features that are required to correctly capture the risks as well as reflects the specific comments, suggestions

CORRESP
1
filename1.htm

Correspondence

 June 27, 2012

 Ms. 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 Fiscal Year Ended December 31, 2011

Filed February 27, 2012

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

Filed May 7, 2012

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) received your letter dated June 22, 2012, concerning the Company’s Annual
Report on Form 10-K for the year ended December 31, 2011, the April 5, 2012 Definitive Proxy Statement and the Form 10-Q for the quarterly period ended March 31, 2012.

 We respectfully request an extension of time to respond to your letter and intend to provide our response on or before July 27, 2012.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

Jeffrey M. Kottkamp, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

Michael Seaman, Securities and Exchange Commission

Staci Shannon, Securities and Exchange Commission

Kevin W. Vaughn, Securities and Exchange Commission

June 22, 2012

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

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31, 2011
Filed February 27, 2012
Form 10 -Q for Quarterly Period Ended March 31, 2012
Filed May 7, 2012
File No. 001 -11758

Dear Ms. Porat:

We have reviewed your filing s 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 believe an amendment is appropriate,
please tell us why in your response.

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

Form 10 -K for Fiscal Year Ended December 31, 2012

Item 1A.  Risk Factors

We are subject to operational risk that could adversely affect our bu sinesses, page 24

1. We note that you are subject to operational risk, including potential vulnerability to
“unauthorized access, mishandling or misuse, computer viruses or malware, cyber attacks
and other events that could have a security impact on [your co mputer] systems.”
Furthermore, we note reports that the prevalence of cyber attacks  have increased  in your

Ruth Porat
Morgan Stanley
June 22, 2012
Page 2

 industry .  If you have experienced any of these or other cyber incidents in the past,
beginning with your next Form 10 -Q, please state that fact in order to provide the proper
context for your risk factor disclosure.  Please refer to the Division of Corporation
Finance’s Disclosure Guidance Topic No. 2 at
http://www.sec.gov/divisions/corpfin/guidance/cfguidance -topic2.htm for additional
information.

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities

Stock Performance Graph, page 43

2. It appears that your presentation of the S&P 500 Stock Index  and the S&P 500 Financials
Index  does not assume the reinvestment of dividends (cumulative total shareholder
return) as required by Item 201(e) of Regulation S -K.  Please confirm that future
performance graphs will present cumulative total shareholder return for the indices.

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

Net Revenues , page 57

3. You disclose that you record gains and losses related to investments associated with
certain employee deferred compensation plans in Principal Transactions – Trading and
Principal Transactions – Investments.  Please revise your disclosure  in Management’s
Discussion and Analysis  or the Notes as appropriate to address the following:

 Quantify the amount of compensation tied to the performance of investments held in
your principal transaction portfolio ;

 More clearly describe the relationships between how com pensation is calculated and
the gains/losses absorbed on the referenced investments ;

 To the extent that the compensation expense and investment gain/losses offset, clarify
whether this is always the case, and if not, describe the circumstances where
compe nsation and gains/losses would not offset; and

 Discuss the extent to which the employee does not bear the full gain/loss of the
referenced investment portfolio due to guarantees that you provide in the
compensation arrangement.

Ruth Porat
Morgan Stanley
June 22, 2012
Page 3

 Critical Accounting Pol icies, page 79

Goodwill and Intangible Assets, page 80

4. Please revise your disclosure in future filings to state, if true, that each of your reporting
units has a fair value that is substantially in excess of carrying value.  If that is not true,
please revise your disclosure in future filings to include the following disclosures for
each reporting unit that is at risk of failing step one of your goodwill impairment test :

 The percentage by which fair value exceeded carrying value as of the date of the mo st
recent test .

 A discussion of the methods and key assumptions used in your impairment analysis
and how the key assumptions were determined .

 A discussion of the degree of uncertainty associated with the key assumptions, and
how those assumptions wer e determined. The discussion regarding uncertainty should
provide specifics to the extent possible (e.g., the valuation model assumes recovery
from a business downturn within a defined period of time) .

 Description of specific, potential events and/or ch anges in circumstances that could
reasonably be expected to negatively affect the key assumptions  and outcome .

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk

Risk Management, page 100

5. Please expand your discussion to explain the interactions among the various committees
and groups responsible for monitoring risk and clarify how information relating to risks is
communicated up to senior management and the Board of Directors.  For example, we
note that with respect to market risk, t he business units and trading desks ensure that the
risks are measured monitored and made transparent to senior management.  Additionally,
we note that the Market Risk Department is responsible escalating risk concentrations to
senior management.  How is t his information conveyed to the Board of Directors?

VaR Methodology, Assumptions and Limitations, page 104

6. We note your disclosure that your V alue-at-Risk (VaR)  model evolves over time in
response to changes in the composition of trading portfolios and t o improvements in
modeling techniques and systems capabilities .  We further note that you are committed to
continuous review and enhancement of VaR methodologies and assumptions in order to
capture evolving risks associated with changes in market structure  and dynamics.   Please
respond to the following and expand your disclosure in future filings as appropriate:

Ruth Porat
Morgan Stanley
June 22, 2012
Page 4

 Tell us the number of different VaR models that are used to determine your total
trading VaR , and discuss the drivers regarding  the need to use mu ltiple different
models .

 Tell us how all of the different VaR models used are aggregated to arrive at your total
trading VaR as well as the individual market risk categories disclosed.   For example,
clarify whether you simply aggregate the outputs from t he different models or
whether adjustments are made, and if so, how  the adjustments are determined .

 Clarify whether your stress VaR (S -VaR) scenarios use all of the base VaR models
with more stressed assumptions or if you use different models than your un stressed
VaR scenarios .  To the extent that different models are used to capture that risk,
please tell us the drivers as to why.

 Tell us whether the VaR models used for regulatory capital purposes are the same as
the VaR models used for your market risk disclosures.   To the extent that certain of
the models used for both purposes differ, please tell us the drivers behind those
differences.

 Discuss the process and validation procedures in place prior to implementing
significant model and assumption change s.  For example, discuss the approval
process required, back -testing procedures performed, and periods of parallel mod el
runs before implementation.

 To the extent that all or some of your VaR models used for your market risk
disclosures are different than  those used to calculate regulatory capital, please tell us
whether the model review process and model oversight processes are the same for
both.   As part of your response, please clarify when approval is required from any of
your regulators regarding VaR model changes.

 Given that your VaR models are evolving over time, tell us how you consider when
disclosure is required under Item 305(a)(1)(iii)(4) of Regulation S -K regarding
model, assumptions and parameter changes.

Country Risk Exposure, page 118

7. You disclose that indirect country risk exposures are captured and monitored through
regular stress testing and counterparty, market and systemic vulnerability analysis ,  You
also disclose  that you reduce country risk exposure through the effect of risk mitig ants,
such as netting agreements with counterparties that permit offset ting of  receivables and
payables with such counterparties, obtaining collateral from counterparties, and hedging.
For purposes of providing greater transparency, p lease revise your disclosure in future
filings to more clearly identify and discuss specific examples of such indirect country risk
exposure and discuss the extent of indirect sovereign credit risk exposures that you have
identified , providing quantificati on where possible .

Ruth Porat
Morgan Stanley
June 22, 2012
Page 5

8. We note as per footnote (2) to your tabular disclosure on pages 119 and 120 that your net
counterparty exposure takes into consideration legally enforceable master netting
agreements and collateral.  Please revise your disclosure in fut ure filings to separately
quantify the impact that master netting agreements and posted collateral have on your net
counterparty exposure.

9. We note your disclosure that your hedges within your tabular disclosures on pages 119
and 120 represent CDS hedges o n net counterparty exposure and funded lending, and that
the amounts disclosed are based on the CDS notional amount assuming zero recovery
adjusted for any fair value receivable or payable.  Please clarify and consider revising
your disclosure in future fi lings to more clearly discuss how you calculate this amount,
what you believe that it represents, and why you believe this presentation is useful to you
and investors.  Specifically, address how the amount reported differs from fair value and
notional amou nts, and consider separately quantifying fair value and notional amounts in
a footnote to your tabular disclosure .  Additionally, please revise your disclosure in future
filings to discuss the nature of payout or trigger events under these purchased credit
protection contracts and how those features may limit the effectiveness of such contracts
in mitigating losses.

Notes to Consolidated Financial Statement, page 133

7.    Variable Interest Entities and Securitization Activities, page 178

10. On page 181, we  note that your tabular disclosure of certain non -consolidated VIEs in
which you had variable interests include s all VIEs in which you have determined that
your maximum exposure to loss is greater than specific thresholds or meets certain other
criteria.   Please revise your disclosure to clarify the thresholds and other criteria that you
utilize in developing this disclosure.

12.  Derivative Instruments and Hedging Activities, page 198

11. You disclose in footnote (1) to your tabular disclosures on pages 201 and 202 that
notional amounts include net notionals related to long and short futures contracts , and
that t he variation margin on these futures contracts is excluded from the se table s.  Please
revise your disclosure in future filings to clarify whether you r futures contracts in these
tables are presented on a gross fair value basis.  Also, address whether you have netted
daily margin posted against the fair values such that the fair value amounts disclosed are
on a net rather than gross fair value basis.  T o the extent the amounts are net, tell us how
you considered the guidance in ASC 815 -10-50-4B and 820 -10-50-3.

Ruth Porat
Morgan Stanley
June 22, 2012
Page 6

 22.  Income Taxes, page 244

12. It appears that your effective tax rate has experienced significant volatility in recent  years
due to Non -U.S. earnings.  Please clarify  and revise your disclosure to address the
following:

 The extent to which  the Non -U.S. earnings line item within your tax rate
reconciliation includes the impact on your effective tax rate due to changes in enacted
foreign tax rates, changes in your determination that certain unremitted foreign
earnings are reinvested indefinitely, and/or changes in the amount of foreign earnings
derived from jurisdictions with tax rates different than your U.S. statutory tax rate .

 Given that 46.7% of income from continuing operations  in 2011 is related to Non -
U.S. earnings (per your tabular disclosure on page 246), please tell us how you
considered separately disclosing current and deferred tax provisions for foreign
jurisdicti ons by country  (e.g., tax provisions for your major foreign tax jurisdictions
that are disclosed on page 248 including Hong Kong, Japan, and the United
Kingdom).

 Finally, you disclose on page 108 of your Form 10 -Q for the Quarterly Period Ended
March 31 , 2012 that t he income of certain foreign subsidiaries earned outside of the
United States has previously been excluded from taxation in the U.S. as a result of a
provision of U.S. tax law that defers the imposition of tax on certain active financial
servi ces income until such income is repatriated to the United States as a div idend
and that t his provision  expired for taxable years beginning on or after January  1,
2012 .  You also state that i f this provision is extended again with respect to such
income ear ned during 2012, the impact could decrease your 2012 annual effective tax
rate and have a favorable impact on your n et income .  Please revise your disclosure in
future filings to quantify the impact that the expiration of this tax provision had on
your eff ective tax rate for the first quarter of 2012.

Financial Data Supplement

Short -term Borrowings, page 266

13. We note your disclosure on page 63 that net interest expense  within the Institutional
Securities segment  increase d to $1.085 billion in 2011 from $2 33 m illion in 2 010
primarily due to higher interest expenses that resulted from increased interest rates
associated with your long term borrowings and stock lending transactions.  We also note
your weighted average interest rates of long term borrowings in creased from 3.8% to 4%
per your disclosure on page 195.  However, you disclose that  you are unable to provide
weighted average interest rates f or securities sold u nder repurchase agreements and
securities loaned as you consider such interest expense as an  integrated activity with
other revenue sources for each of your separate businesses .  We believe this information
is useful as it provides transparency into the interest rate and cost of borrowing increases

Ruth Porat
Morgan Stanley
June 22, 2012
Page 7

 on your short -term collateralized borrowings in a historically low interest rate
environment.  Please revise your disclosure in future filings to provide the weighted
average interest rates fo r securities sold u nder repurchase agreements and s ecurities
loaned as required by Item VII(3) of Industry Guide  3 for Bank Holding Companies , or
tell us why such information is not available .  Please note that you may provide an
approximate  weighted average interest rate on your average balances outstanding during
the years presented.

Definitive Proxy Statement on  Schedule 14A

Certain Transactions, page 19

14. Please tell us whether the extensions of credit to your directors, officers and members of
their immediate families were made on substantially the same terms and conditions as
those prevailing at the time for comparable transactions with other persons not related to
the lender .  If so, please confirm that you will use the language contained in Instruction
4(iii)(B) to Item 404 of Regulation S -K in future filings.

Compensation Discussion and Analysis, page 26

15. We note your disclosure on

CORRESP
1
filename1.htm

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.

April 27, 2012

By EDGAR & Email

Ms. Amy M. Starr

Chief

Office of Capital Markets Trends

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Mail Stop 4561

Washington, DC  20549

Re:

Morgan Stanley

424 Prospectuses relating to Registration Statement on Form S-3ASR

Filed November 21, 2011

File No. 333-178081

Dear Ms. Starr:

Morgan Stanley is pleased to respond to your letter of April 12, 2012 concerning its 424 Prospectuses relating to Registration Statement on Form S-3ASR Filed November 21, 2011.

Morgan Stanley believes it has always provided investors in its structured notes with straightforward disclosures about the particular economic exposure offered by each structured note and a fair and balanced presentation of benefits and risks.  As we have noted in the past, we consider our current disclosures to be both fair and balanced, and have continually reviewed them for possible areas of enhancement.

In response to your comments, we have attached a marked offering document to provide an example of the type of disclosure that would address the nature of the Staff’s concerns.  We are offering the mark-up as a road-map of the type of disclosure we believe would bring desirable consistency to structured note disclosure.  However, we believe that it will be crucial for the industry, with the guidance and assistance of the Staff, to adopt a common approach to such detailed quantitative disclosure and to coordinate the timing of its implementation.  Given that structured products offered by different issuers are often sold through common distribution channels, divergent disclosure practices could have the unwanted effect of creating confusion rather than consistency and transparency across the market.

For your convenience, we have restated your comments below.

Product Names

Comment:

1.

The staff in the Division of Corporation Finance has previously indicated that note titles using the term “principal protected” should also include balanced information about limitations to the principal protection feature. We believe this concern regarding potential confusion over the titles of securities may exist for note titles across various product categories. Issuers should evaluate the titles used for their different types of structured notes and should revise to clearly describe the product in a balanced manner and avoid titles that stress positive features without also identifying limiting or negative features.

Response:

Morgan Stanley does not use the term “principal protected” in the title of its securities, and will continue to evaluate its structured note titles so that they are balanced and do not stress positive features without also identifying limits and risks.

With respect to each issuance of structured notes that exposes investors to the risk of a significant loss of principal at maturity, Morgan Stanley proposes to add the sub-title “Principal at Risk Securities” to the name of the product, or to make equivalent disclosure.

In connection with Comment 1, please see the addition of a sub-title to the branded salesmark on the cover page of Exhibit A and in the header of each page in the preliminary terms.

Product Pricing and Value

Comment:

2.

We note that issuers of structured notes often include disclosure, including in risk factors, explaining that the value of the notes at issuance and/or the price that the affiliate would pay for the notes in the secondary market, assuming no change in

2

market conditions, will be less than the public offering price. In order for investors to be able to understand the relationship of the note purchase price to its fair value (as estimated by the issuer or its affiliate) and potential secondary market prices, we believe issuers should consider prominently disclosing the difference between the public offering price of the note and the issuer or its affiliate’s estimate of the fair value of the note or discuss with us the reasons such disclosure should not be provided. Issuers also should consider identifying the specific amounts being paid from the note proceeds for costs and expenses.

Response:

To explain the relationship of the note purchase price to its fair value in a manner that also achieves transparency and consistency across the market, the attached example outlines additional quantitative and qualitative disclosure about the relationship between the issue price, the costs borne by the investor and the estimated model-based value of each structured note.

The offering document would first set out the basic relationship between the issue price, costs and model-based value and provide our then current estimate of the model-based value and costs.

The offering document would then explain the basis on which we have estimated the model-based value and the costs of the structured note.  The disclosure highlights that the model-based value is only an estimate determined by reference to our pricing models and inputs as of a particular day and that it will change with changing market conditions.  We also undertake to provide a bring-down of the estimated model-based value and costs in the final pricing supplement.

We believe that our model-based value, based on issuer funding rates rather than secondary market credit spreads, gives investors the most comparable information across structures, because the funding rate, which is the floating interest rate payable by the issuer in its hedging arrangements, is one of the inputs used when setting the terms of the offered structured note.

The offering document would then go on to explain the other factors that would affect the secondary market price of the offered structured note, including the bid-offer spread a dealer would charge and our credit spreads, and state that those prices would, absent changes in market conditions related to the underlying asset, often, but not always, be lower than the model-based value.

We understand that some modification to the proposed disclosure may be required in order to reach widespread acceptance of these changes in the marketplace.

Please see pages 3, 7, 9 and 12 of Exhibit A.

Comment:

3.

We have observed that some issuers of structured notes or their affiliates will, for a limited period of time immediately following an offering, use values on

3

account statements or provide repurchase prices to customers at levels that temporarily exceed the issuer’s or affiliate’s own estimate of the fair value of the product. Further, we understand that after a given period of time such values and prices will be readjusted to better reflect the issuer’s or affiliate’s own estimate of the fair value of the product. If applicable, we ask that you disclose, including in risk factor disclosure as appropriate, your usage of different values and prices in this manner and explain the potential impacts on post-offering pricing, valuation, and trading.

Response:

Morgan Stanley believes that the essential relationship between the issue price of a structured note, the costs borne by the investors and the estimated value of the structured note has been laid out in the changes proposed in response to comment 2.  Comment 3 addresses the point that the costs borne by the investor may not all be reflected immediately in the secondary market price at which Morgan Stanley & Co. LLC (“MS & Co.”) may make a market.  (As discussed in our response to Comment 8, MS & Co. provides indicative prices to data service providers and to dealers, who in turn use them as a basis for determining the prices provided to investors in account statements.)

To address this point, the offering document includes, in the risk factor relating to the adverse impact of including costs associated with selling, structuring and hedging structured notes in the original issue price, a caution that, while the prices at which MS & Co. might be willing to make a market could initially be higher than if those prices had fully reflected all of the costs, investors should nonetheless take into account that they may bear all of such costs, both when making the decision to purchase a structured note and when deciding to sell it into the secondary market.  The offering document addresses this point on pages 12 and 13 of Exhibit A.

Use of Proceeds and Reasons for Offerings

Comment:

4.

Issuers often provide disclosure explaining that they will use the proceeds of a structured note offering for general corporate purposes and may use an unquantified portion for hedging transactions. Item 504 of Regulation S-K requires that issuers disclose the approximate amounts intended to be used for each purpose. If the issuer does not have specific plans for a significant portion of the proceeds of the offering, it should note the reasons for the offering.

Response:

Morgan Stanley generally uses all of the proceeds of structured note offerings, including any up front payments it receives from its hedging counterparties, for general corporate purposes.

4

While, as a holding company, our general corporate purposes include providing funding to our subsidiaries, including those which are our hedging counterparties, inter-company advances are made out of our general corporate funds and are not sourced on a pass-through basis from any specific offerings.  In addition, our subsidiaries have additional sources of funding, including repurchase agreements, and other secured and term funding programs on which they can draw to fund their trading activities, including those activities undertaken in connection with the hedging transactions for our structured notes.

In our disclosure, we propose adding further detail specifying that the stated costs borne by the investor will cover the selling, structuring and hedging costs related to each structured note.  Please see page 7 of Exhibit A.

Comment:

5.

Please explain to us in your response letter with a view toward disclosure in your future Exchange Act reports, the purpose of your structured notes program generally, and the purposes of particular types of offerings or products. Explain to us how significant structured notes are to your overall plan of financing and liquidity position. Please tell us about any material trends or changes in your use of, or your experience with, structured notes in the past few years, including trends or changes in your reliance on structured notes as a liquidity source. Also tell us about trends or changes in note types and/or the referenced asset classes or referenced indices. Please include quantitative information about outstanding structured note obligations in recent periods.

Response:

The purpose of Morgan Stanley’s structured note issuance program is two-fold: to help Morgan Stanley meet its goal of diversifying its unsecured funding sources by product, investor type and region and to support the ability of its subsidiaries’ business units to structure and supply structured notes to the market in response to investor demand.  Morgan Stanley’s funding management policies focus on diverse funding sources in order to reduce refinancing risk.  The relative importance of one source over another varies at different points in time depending on market conditions and management’s strategy of keeping multiple funding sources active and available.  Demand for structured products typically comes from different types of investors than Morgan Stanley’s other funding sources, and Morgan Stanley has found that investors in structured products tend to provide relatively durable sources of funding.  Morgan Stanley believes that its management’s focus on diverse funding sources, including the issuance of structured products, has provided more stable access to liquidity and capital resources.

Morgan Stanley’s use of structured products as a liquidity source has remained stable over the past three years.  As of December 31, 2011, 2010 and 2009, Morgan Stanley had approximately $[*], $[*] and $[*], respectively, of structured notes outstanding, which are primarily accounted for at fair value.  Structured notes issued from Morgan Stanley’s registration statement are generally linked to interest rates, equities, commodities and currencies, in proportions that shift depending on market interest.  To the extent that the variety of underlying assets accommodates buyers with differing investment strategies,

5

Morgan Stanley considers it helpful to its funding management goal of widening its investor base.

Morgan Stanley discusses structured products in the context of its funding plans on page 89 of its annual report on Form 10-K for the year ended December 31, 2011 and on page 126 of its quarterly report on Form 10-Q for the quarterly period ended September 30, 2011.  To highlight further the manner in which structured products contribute to Morgan Stanley’s express goal of widening its investor base “(by product, by investor and by region)”, Morgan Stanley will consider adding additional language about the role of structured products in its funding plans and consider specifying the level of its outstanding structured product obligations in its annual and quarterly reports.

Plan of Distribution

Comment:

6.

We have found that some issuers of structured notes disclose that their affiliates might change the price and selling terms if all notes are not sold at the public offering price disclosed on the cover page. Please explain to us with a view toward disclosure, the manner in which you conduct structured note offerings, including the forms of underwriting involved. Also please explain whether any notes are sold to broker-dealers, including your affiliates, and not immediately resold to investors or are resold to investors at differing prices. In this situation, please explain why there may be different prices and what type of investor may receive a “better” price. Please explain the process in detail.

Response:

A substantial majority of Morgan Stanley’s structured notes are sold at a fixed price pursuant to a firm commitment underwriting by its affiliated broker-dealer, MS & Co., as part of Morgan Stanley’s Medium-Term Note program under the U.S. Distribution Agreement, filed with the Commission as an exhibit to its shelf registration statement.  (See the response to Comment 14 below regarding Morgan Stanley’s Medium-Term Note program and related exhibits.)  The fixed price for these notes, typically par, is specified on the cover page of the pricing supplement.1

In many cases, MS & Co. relies on dealers to assist in the distribution of the notes, which may be third party dealers or its affiliate, Morgan Stanley Smith Barney LLC (“MSSB”).  The dealers generally receive a specified portion of the underwriting discounts and commissions, as a selling concession.  Unlike a traditional securities offering where the issuer is seeking to raise a fixed amount of capital, the principal amount of each offering is solely determined based upon investor demand for the offering as discovered during

1 For some of these fixed price offerings, Morgan Stanley will offer discounts to investors who purchase a substantial number of notes. These discounts are available to any investor who meets the specified purchase volumes.  In keeping with the Staff’s and FINRA’s guidance on fixed price offerings, Morgan Stanley provides prominent cover page disclosure of the discounts available to the investor if it purchases a specified volume of notes.

6

the marketing period.  As a result, all of Morgan Stanley’s structured notes are typically sold as part of the initial distribution.

A lesser number of Morgan Stanley’s offerings, particularly structured rate offerings, are made on a variable price offering bas

April 12, 2012

Via Facsimile

Martin M. Cohen
Counsel and  Secretary
Morgan Stanley
1585 Broadway
New York, New York 10036

Re: Morgan Stanley
424 Prospectuses relating to Registration Statement on Form S -3ASR
Filed November 21, 2011
File No. 333 -178081

Dear  Mr. Cohen:

We are writing this letter in connection with our review of takedowns of structured notes
from shelf registration statements by financial institutions and have identified a number of areas
in which we believe there could be disclosure improvements.  Therefore, we  are issuing the
following comments  in an effort to  improve disclosures in connection with your future structured
note offerings, and in some instances, Securities Exchange Act of 1934 reports .

Although we reviewed certain takedowns from your shelf registration statement, we are
including comments that may or may not specifically apply to your disclosures with respect to all
types of notes.  If you  disagree with a comment or  think it does not apply  to your structured note
program or certain types of notes, please explain why in your response letter.

You should also note that this letter does not address all disclosure issues that may arise
in str uctured note offerings.  It is only intended to address the limited issues described in the
comments below.  If we conduct a review of your filings in the future, we may have more
specific comments.  It is your responsibility to determine the disclosures t hat should be provided
in your particular circumstances.

Product Names

1. The staff in the Division of Corporation Finance has previously indicated that note titles
using the term “principal protected” should also include balanced information about
limitati ons to the principal protection feature.  We believe this concern regarding
potential confusion over the titles of securities may exist for  note titles across various
product categories.  Issuers should evaluate the titles used for the ir different  types of
structured notes and should revise to  clearly describe the product in  a balanced manner

 and avoid titles that stress positive features without also identifying  limiting  or negative
features.
Product Pricing and Value

2. We note that issuers of structured no tes often include disclosure, including in risk factors,
explaining that the value of the notes at issuance and/or the price that the affiliate would
pay for the notes in the secondary market, assuming no change in market conditions, will
be less than the public offering price.  In order for investors to be able to understand the
relationship of the note purchase price to its fair value (as estimated by the issuer or its
affiliate) and potential secondary market prices, we believe issuers should consider
prominently disclosing the difference between the public offering price of the note and
the issuer or its affiliate’s estimate of the fair value of the note or discuss with us the
reasons such disclosure should not be provided.  Issuers also should consider identifying
the specific amounts being paid from the note proceeds for costs and expenses.

3. We have observed  that some issuers of structured notes or their affiliates will, for a
limited period of time immediately following an offering, use values on account
statements or provide repurchase prices to customers at levels that temporarily exceed the
issuer’s or affiliate’s own estimate of the fair value of the product.   Further, we
understand that after a given period of time such  values and prices will be readjusted to
better reflect the issuer’s or affiliate’s own estimate of the fair value of the product.   If
applicable, we ask that you disclose , including in risk factor disclosure as appropriate,
your usage of different values and prices in this manne r and explain the potential impacts
on post -offering pricing, valuation, and trading.
Use of Proceeds and Reasons for Offerings
4. Issuers often provide disclosure explaining that they will use the proceeds of a structured
note offering for general corporat e purposes and may use an unquantified portion for
hedging transactions.  Item 504 of Regulation S -K requires that  issuers disclose the
approximate amounts intended to be used for each purpose.  If the issuer does not have
specific plans for a significant portion of the proceeds of the offering, it should note the
reasons for the offering.

5. Please explain to us in your response letter with a view toward disclosure in your future
Exchange Act reports, the purpose of your structured notes program generally, and the
purposes of particular types of offerings or products.  Explain to us how significant
structured notes are to your overall plan of financing and liquidity position.  Please tell us
about any material trends or changes in your use of , or your experi ence with , structured
notes in the past few years, including trends or changes in your reliance on structured
notes as a liquidity source.  Also tell us about trends or changes in note types and/or the

 referenced  asset classes or referenced indices.  Pleas e include quantitative information
about outstanding structured note obligations in recent periods.
Plan of Distribution

6. We have found that some issuers of structured notes disclose  that their affiliate s might
change the price and selling terms if all no tes are not sold at the public offering price
disclosed on the cover page. Please explain to us with a view toward disclosure, the
manner in which you conduct structured note offerings, including the forms of
underwriting involved.  Also please explain whe ther any notes are sold to broker -dealers,
including your affiliates, and not immediately resold to investors or are resold to
investors at differing prices.  In this situation, please explain why there may be different
prices and what type of investor may  receive a “better” price.  Please explain the process
in detail.

7. Some issuers offer structured notes using a preliminary pricing supplement or term sheet
that discloses a range for certain material terms (such as a capped maximum return), with
the actual terms set within that range on a later pricing date.  If you offer  notes in this
manner, explain to us with a view toward disclosure, how the size of the range is
determined, how the actual terms are established, and when and how the actual terms are
communicated to investors.
Liquidity

8. While issuers generally disclos e in risk factors or elsewhere that the  issuer or its affiliates
may, but are not obligated to, make a secondary market in the notes that they offer, the
disclosure  should provide investors with a better understanding of the potential liquidity
or lack of liquidity of any secondary market .  In this regard, please explain to us with a
view toward disclosure, your practices and procedures with respect to providing liquidity
in the notes you sell and how often you offer to buy back notes from investors prior t o
maturity , the price paid  and how it is determined .
Issuer Credit  Risk

9. While the note terms establish the amounts due and payable on the notes, payment is
ultimately dependent on the creditworthiness of the issuer. It is important for investors to
understand that structured notes are unsecured obligations of the issuer and any payment
on the note is subject to issuer credit risk, with no ability to pursue any referenced  asset
for payment .  As a result, we believe th e risk that an investor is exposed to an issuer’s
credit should be disclosed on the prospectus  supplement cover page in a clear, consistent,
and prominent manner.

 Tax Consequences

10. Item 601(b)(8) of Regulation S -K requires the filing of  a tax opinion wh en the tax
consequences are material to investors and a representation as to tax consequences is set
forth in the filing.  Refer to Staff Legal Bulletin No. 19 , which is  available on our
website , for additional details.  Given the complexity and uncertaint y surrounding the tax
treatment of some types of structured notes, the tax consequences appear material to an
informed investment decision.  Please explain to us your approach to providing tax
disclosures for the different types of notes you offer and how you determine whether such
disclosures must be based on the opinion of counsel.  If so, explain how the se opinion s
are filed as required.
Referenced Asset or Index Disclosure

11. It is our view that  an issuer may not disclaim liability or responsibility for the information
it discloses regarding the asset or index referenced by  the note because such a disclaimer
is inconsistent with the issuer’s disclosure obligations under the federal securities law s.
Issuers may, however, state that they have not undertaken any independent review or due
diligence of publicly available information regarding an unaffiliated referenced  asset or
index.  Please revise your disclosure, as appropriate, to b e consistent wi th this standard.

12. Please tell  us whether you have ever disclose d hypothetical historical price information,
for example in the case of a new index that has no historical price information.  If so,
explain to us what information the presentation provide d to investors and how it was
presented in a balanced manner.
Disclosure Format

13. We have found that disclosures in structured note offerings are usually made through
combinations of base prospectuses, various underlying prospectus supplements, and
preliminary  and final pricing supplements.  While current rules permit incorporation by
reference, it is important that it not be difficult  for investors to locate important
information or updated information.  Please explain to us what  constitutes your  disclosure
packages for structured note offerings, including the different documents you use, what
information is included in each document, and how you determine the information that
will be included in the term sheet or descriptive prospectus supplement for these
offerings.
Exhibits

14. Each time an issuer conducts a structured note offering, it may need to file certain
exhibits if it has not already done so.  For example, distribution agreements and

 instruments defining the rights of note holders may be required exhibit s.  Please explain
to us your approach to filing these and any other applicable exhibits.
Please provide us with a written response to these comments within ten business days
from the date of this letter or tell us when you will respond.  In some of our c omments, we have
specified improved disclosures  that issuers should provide.  Please explain in your response letter
how you intend to provide such disclosures in future filings .   Upon our review of your response,
we may have additional comments or questi ons.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing s to be certain that the filing s include  the information the Securities Act of 1933 and
all applicable Securities Act rules require. Since the company and its management are in
possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the d isclosures 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 s;

 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 s; and

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

You may contact me or Raquel Fox at (202) 551 -3860 with any questions.

Sincerely,

/s/ Amy M. Starr

Amy M. Starr
Chief
Office of Capital Markets Trends
Division of Corporation Finance

January 31, 2012
 Via E-mail

Ruth Porat Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036
Re: Morgan Stanley
Form 10-K for Fiscal Year Ended December 31, 2010 Filed February 28, 2011 File No. 001-11758

Dear Ms. Porat:
We have completed our review of your f ilings.  We remind you that our comments or
changes to disclosure in res ponse to our comments do not for eclose the Commission from taking
any action with respect to the company or the filings and the company may not assert staff
comments as a defense in any proceeding ini tiated by the Commission or any person under the
federal securities laws of the United States.  We urge all pers ons who are responsible for the
accuracy and adequacy of the disclosure in the fi lings to be certain that the filings include the
information the Securities Exchange Act of 1934 and all applicable rules require.
 Sincerely,

 /s/ Michael Seaman for

Suzanne Hayes Assistant Director

CORRESP
1
filename1.htm

Correspondence

 December 22, 2011

 By U.S. Mail & Facsimile to 703-813-6987

 Ms. 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 Fiscal Year Ended December 31, 2010

 Filed February 28, 2011

Form 10-Q for the Quarterly Period Ended March 31, 2011

Filed May 9, 2011

 Form 10-Q for the Quarterly Period Ended June 30, 2011

 Filed
August 8, 2011

 File No. 001-11758

 Dear Ms. Hayes:

 Morgan Stanley (the “Company”) is pleased to respond to your
letter of December 12, 2011 concerning its Form 10-K for Fiscal Year Ended December 31, 2010, Form 10-Q for the quarterly period ended March 31, 2011 and Form 10-Q for the quarterly period ended June 30, 2011.

For your convenience, we have restated your comment below.

 General

 Comment:

1.
 We have become aware through various news reports that you may have accessed various Federal Reserve and Federal Deposit Insurance Corporation
sponsored funding programs during 2008 and 2009, including the Term Auction Facility (TAF), Commercial Paper Funding Facility (CPFF), Temporary Liquidity Guarantee Program (TLGP), the Primary Dealer Credit Facility (PDCF) and the Term Securities
Lending Facility (TSLF). We note from your disclosures during these periods that you appear to disclose the participation in certain programs, including the TLGP and the amounts of borrowing outstanding as of the balance sheet dates for that
program, you disclose the existence and availability of certain other programs, such as the PDCF and

TSLF, but you do not appear to have provided quantified information as to the level or amounts of borrowings under these programs, and you do not provide any discussion about certain other
programs that were in existence at this time, such as the TAF and CPFF. To the extent that you had borrowings under any of these programs during those periods, please tell us how you concluded that quantitative and qualitative disclosure about your
participation in these programs was not required. Additionally, please provide your analysis as to whether you believe that any participation in these programs constituted a form of federal financial assistance, such that additional disclosure may
have been required as to the effects of this assistance on your financial condition and results of operations pursuant to the guidance in FRC 501.06.c. Effects of Federal Financial Assistance Upon Operations.

Response:

 1.
Regulation S-K Item 303 and SEC Release Nos. 33-8350; 34-48960; FR-72

 The Company believes the disclosure it made in 2008 and 2009 is
appropriate and sufficient with respect to the various U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation (“FDIC”) programs that were made available to financial institutions broadly during the credit crisis.
Regulation S-K Item 303 requires that, among other things, a registrant must identify “…known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the
registrant’s liquidity increasing or decreasing in any material way” and “[d]escribe any known material trends, favorable or unfavorable, in the registrant’s capital resources”. In addition, Interpretation: Commission
Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations, Release Nos. 33-8350; 34-48960; FR-72 (the “Interpretation”) provides further guidance on disclosure about liquidity and
capital resources. The Interpretation states that, among other things, registrants should provide “a clear picture of the company’s ability to generate cash and to meet existing and known or reasonably likely future cash requirements”
by disclosing, among other things, “difficulties involved in assessing the effect of the amount and timing of uncertain events”, analysis of the “underlying sources” of liquidity where such sources have “materially
varied”, and, in addition to historical items, “the types of financing that are, or that are reasonably likely to be, available… and the impact on the company’s cash position and liquidity, should be considered and may be
required.”

 In determining the scope and level of its disclosure of its participation in the various governmental funding programs in
2008 and 2009, the Company evaluated its participation in these programs on a case-by-case basis, including whether participation in these programs, individually or collectively, was reasonably likely to have a material effect on the
Company’s financial condition or operating performance. While the Company described all the programs it utilized in 2008 and 2009 in its annual reports on Form 10-K and quarterly reports on Form 10-Q, the degree of detail it provided
varied, depending on the nature of the program and the extent of the Company’s usage of the program.

 2

 A. Disclosure of the Funding Programs Generally

The Company’s filings, during 2008, disclosed sharp decreases in interbank lending and commercial paper borrowing, which led to a severe credit
freeze for both institutional and individual borrowers, particularly for financial institutions such as the Company. In order to revive the credit market, the U.S. government took a number of steps in 2008 that enhanced liquidity, as disclosed on
pages 9 and 74, respectively, in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2008 (the “2008 Form 10-K”):

 U.S. regulatory agencies including primarily the U.S. Department of Treasury (the “U.S. Treasury”), the Fed, the Federal Deposit Insurance Corporation (“FDIC”) and the Federal Reserve
Bank of New York have taken a number of steps to enhance the liquidity support available to financial institutions such as Morgan Stanley and certain of its subsidiaries. These steps have included (i) expanding the types and quality of assets
that can be used as collateral for borrowings by primary dealers from the Federal Reserve Bank of New York under the primary dealer credit facility, (ii) extending the term for which the Fed will lend the U.S. Treasury securities to primary
dealers under its term securities lending facility, (iii) adopting temporary exceptions to the Federal Reserve Act limitations on transactions between insured depository institutions, such as Morgan Stanley Bank, N.A., and their affiliates to
permit them to provide liquidity to their affiliates for assets typically funded in the tri-party repo market, and (iv) authorizing the Federal Reserve Bank of New York to extend credit to the U.S.- and London-based broker-dealer subsidiaries
of Morgan Stanley and those of two other institutions against all types of collateral that may be pledged at the primary dealer credit facility. Furthermore, the FDIC agreed to temporarily guarantee certain senior unsecured debt of all FDIC-insured
institutions, their U.S. holding companies, and of certain other affiliates accepted into the program, and to temporarily guarantee deposits in certain transaction accounts of FDIC-insured institutions or branches. Morgan Stanley and its
FDIC-insured depository institutions are participating in both FDIC programs and will incur fees assessed in connection with such programs…

 Global market and economic conditions have been disrupted and volatile, and in the fourth quarter of fiscal 2008, volatility reached unprecedented levels. In particular, the Company’s cost and
availability of funding have been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. During the fourth quarter of fiscal 2008 the Company became a financial holding company under the BHC Act and gained
additional access to various government lending programs and facilities including the Commercial Paper Funding Facility (“CPFF”), the Temporary Liquidity Guarantee Program (“TLGP”), the Term Securities Lending Facility
(“TSLF”) and the Primary Dealer Credit Facility (“PDCF”)…

 The Company believes this disclosure made clear to
investors that there were unfavorable events, uncertainties and trends in the traditional markets from which the Company sourced liquidity and that, as a result, those underlying sources were subjected to variation as the Company moved from
traditional sources of liquidity to other sources.

 3

 B. TLGP

 The TLGP was established to address the lack of availability of unsecured funding during the height of the credit crisis, and the program was available to a wide variety of institutions. The debt that was
guaranteed by the FDIC under the TLGP constituted a new class of unsecured funding compared with the Company’s historical funding sources, one that involved the credit support of another person, a U.S. governmental agency, to support issuance.
Given this reliance on third party credit support in order to borrow in the unsecured markets, the Company believed it was important to provide readers with details of the nature of this new class of unsecured funding and its participation in the
TLGP, including the amounts borrowed and a description of the terms of the program. Disclosure of the amount that could be borrowed under the TLGP with an FDIC guarantee also made sense as TLGP placed a numerical limit on the amount that any issuer
could raise under the program.

 The Company included disclosures regarding the TLGP and its participation therein in 2008 and 2009 and, based
on subsequent correspondence with the Staff, further revised such disclosure in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Form 10-K”). The relevant disclosure on pages 79 and 80 in
the Company’s 2009 Form 10-K, for example, is set forth below:

 Temporary Liquidity Guarantee Program
(“TLGP”). In October 2008, the Secretary of the U.S. Treasury invoked the systemic risk exception of the FDIC Improvement Act of 1991, and the FDIC announced the TLGP.

Based on the Final Rule adopted on November 21, 2008, the TLGP provides a guarantee, through the earlier of maturity or June 30,
2012, of certain senior unsecured debt issued by participating Eligible Entities (including the Company) between October 14, 2008 and June 30, 2009. Effective March 23, 2009, the FDIC adopted an Interim Rule that extends the
expiration of the FDIC guarantee on debt issued by certain issuers (including the Company) on or after April 1, 2009 to December 31, 2012. The maximum amount of FDIC-guaranteed debt a participating Eligible Entity (including the Company)
may have outstanding is 125% of the entity’s senior unsecured debt that was outstanding as of September 30, 2008 that was scheduled to mature on or before June 30, 2009. The ability of certain Eligible Entities (including the Company)
to issue guaranteed debt under this program, under the Interim Rule described above, expired on October 31, 2009.

 At
December 31, 2009, the Company had $23.8 billion of senior unsecured debt outstanding under the TLGP. At December 31, 2008, the Company had commercial paper and long-term debt outstanding of $6.4 billion and $9.8 billion, respectively,
under the TLGP. The weighted average rate at which the Company issued commercial paper and long-term debt, including TLGP fees, under the TLGP as of December 31, 2008 was 2.28% and 3.70%, respectively. The weighted average rate at which the
Company issued long-term debt under TLGP in the first quarter of 2009, including TLGP fees was 2.80%. The Company did not issue any commercial paper under the program in the first quarter of 2009. The Company is unable to determine the benefit to
operating results, if any, of issuing debt under the TLGP as there are no appropriate benchmarks due to the disruption in the debt capital markets at that time. There have been no issuances under the TLGP since March 31, 2009. See Note 9 to the
consolidated financial statements for further information on commercial paper and long-term borrowings.

 4

 C. CPFF

 The commercial paper market experienced difficulties in late 2008. According to Bloomberg, the commercial paper market fell 20 percent over six weeks from September 2008 to October 2008, as money-market
investors fled for safer assets such as Treasuries.1 To ensure that companies had access to
short-term credit, the Federal Reserve established the CPFF on October 27, 2008.

 Historically, the Company had relied on commercial
paper as an important form of short-term borrowing to finance securities inventories not funded with secured funding and other current assets. As of November 30, 2007, the Company had $22.6 billion of commercial paper borrowings outstanding.
However, with the collapse of the commercial paper market in 2008, the Company’s commercial paper borrowings decreased to $7.4 billion at December 31, 2008 and $783 million at December 31, 2009. As part of its funding strategy, the
Company has de-emphasized the use of commercial paper as a source of funding and commercial paper amounts have been included to show that commercial paper is not relied upon as it had previously.

The relevant disclosure on page 80 in the Company’s 2009 Form 10-K, for example, is set forth below:

Commercial Paper Funding Facility. During 2009, the Company had the ability to access the Commercial Paper Funding Facility
(“CPFF”) which provided a liquidity backstop to U.S. issuers of commercial paper through a special purpose vehicle that purchased three-month unsecured and asset-backed commercial paper directly from eligible issuers. The CPFF program
expired on February 1, 2010. As of December 31, 2009, the Company had no commercial paper outstanding under the CPFF program. As of December 31, 2008, the Company had $4.3 billion outstanding under the CPFF program.

D. PDCF and TSLF

Historically, a substantial portion of the Company’s funding sources has been secured financing, given a material portion of the Company’s total
assets consisted of liquid marketable securities and short-term receivables that provide the Company with flexibility in financing these assets with collateralized borrowings. While the aggregate amount of the Company’s secured funding in 2008
and 2009 did not differ significantly from prior periods, and in fact decreased as the Company delevered in the face of the financial crisis, the source of such funding changed as a result of the lack of readily available traditional sources of
secured funding.

 Because of the market illiquidity in 2008, the Company participated in PDCF and TSLF to supplement its historical sources of
secured financing where such sources were

1
See http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHWA87Aa2aQQ

 5

unavailable. The Company ceased utilization of these programs in March 2009 as the credit markets stabilized and the Company was able to access other sources of secured financing once again.
Given the short duration of the Company’s full utilization of these programs and that the aggregate amount of secured funding was consistent with prior practice, and that sufficient collateral was posted under the programs, the Company
determined that it was not meaningful to provide the amounts outstanding under these programs as of the end date of the periods reported. However, the Company determined that the extraordinary market conditions of late 2008 and the fact that the
Company had to rely on PDCF and TSLF to supplement its usual secured financing sources warranted disclosure of the nature and terms of the programs. As such, the Company made disclosures in its filings regarding the PDCF and the TSLF, including the
following disclosure on page 80 in its 2008 Form 10-K:

 On March 11, 2008, the Fed announced an expansion of its
securities lending program to promote liquidity in the financing markets for Treasury securities and other collateral. Under the TSLF, the Fed will lend up to $200 billion of Treasury securities to primary dea

December 12, 2011
 Via E-mail

Ruth Porat Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31, 2010  Filed February 28, 2011  Form 10-Q for the Quarterly Period Ended March 31, 2011  Filed May 9, 2011
Form 10-Q for the Quarterly Period Ended June 30, 2011
 Filed August 8, 2011
Form 10-Q for the Quarterly Period Ended March 31, 2011
 Filed May 9, 2011
File No. 001-11758

Dear Ms. Porat:

We have reviewed your response letter da ted November 10, 2011 and are continuing to
process your responses.  In the inter im, we have an additional comment.

Please respond to this letter within te n business days by providing the requested
information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circumstances, please tell us why in your
response.

After reviewing the information you provide in  response to the comment, we may have
additional comments.

General

 1. We have become aware through various ne ws reports that you may have accessed
various Federal Reserve and Federal De posit Insurance Corporation sponsored
funding programs during 2008 and 2009, including the Term Auction Facility (TAF),
Commercial Paper Funding Facility (C PFF), Temporary Liquidity Guarantee
Program (TLGP), the Primary Dealer Credit Facility (PDCF) and the Term Securities
Lending Facility (TSLF).  We note from your  disclosures during these periods that
you appear to disclose the participation in certain programs, including the TLGP and

Ruth Porat
Morgan Stanley December 12, 2011 Page 2
 the amounts of borrowing outstanding as of the balance sheet dates for that program,
you disclose the existence and availability of certain other programs, such as the
PDCF and TSLF, but you do not appear to ha ve provided quantified information as to
the level or amounts of borrowings under th ese programs, and you do not provide any
discussion about certain other pr ograms that were in existenc e at this time, such as the
TAF and CPFF.  To the extent that you had borrowings under any of these programs
during those periods, please tell us ho w you concluded that quantitative and
qualitative disclosure about your participation in these programs was not required.
Additionally, please provide your analysis as to whether you believe that any
participation in these programs constituted a form of federal financial assistance, such that additional disclosure may have been requ ired as to the effects of this assistance
on your financial condition and results of ope rations pursuant to the guidance in FRC
501.06.c.  Effects of Federal Financia l Assistance Upon Operations.

You may contact Staci Shannon at (202) 551-3374 or me at (202) 551-3494 if you
have questions regarding comments on the fi nancial statements and related matters.
Please contact Michael Seaman at (202) 551-3366 or Suzanne Hayes at (202) 551-3675
with any other questions.
Sincerely,

 /s/ Suzanne Hayes  Suzanne Hayes  Assistant Director

CORRESP
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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.

 November 10, 2011

 By U.S. Mail & Facsimile to 703-813-6987

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

 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

Form 10-Q for the Quarterly Period Ended March 31, 2011

Filed May 9, 2011

Form 10-Q for the Quarterly Period Ended June 30, 2011

Filed August 8, 2011

File No. 001-11758

 Dear
Mr. Vaughn:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of October 28, 2011 concerning its Form
10-Q for the quarterly period ended March 31, 2011 (“First Quarter Form 10-Q”) and the quarterly period ended June 30, 2011 (“Second Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

 1

 Form 10-Q for the Quarterly Period Ended March 31, 2011

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

 Significant Items

 Morgan Stanley Debt, page 80

 Comment:

 1. Refer to your response to prior comment 19. We note your disclosure on page 32
of Form 10-Q for the Quarterly Period Ended June 30, 2011 states, “the changes in overall fair value of the short-term and long-term borrowings (primarily structured notes) are attributable to changes in foreign currency exchange rates,
interest rates, movements in the reference price or index for structured notes and (as presented in the table below) an adjustment to reflect the change in [your] credit quality.” To the extent a material portion of the changes in value
resulted from movement of a specific reference price or changes in a particular index, please revise your future filings to discuss and quantify the amount of gain or loss experienced related to such reference prices or indices.

Response:

 To the extent
that a material portion of the changes in value results from movement of a specific reference price or changes in a particular index, the Company will discuss and quantify the amount of gain or loss related to such reference prices or indices in
future filings.

 Form 10-Q for the Quarterly Period Ended June 30, 2011

 Notes to Condensed Consolidated Financial Statements

 1. Introduction and Basis of
Presentation

 Basis of Financial Information, page 9

 Comment:

 2. You disclose that prior to June 30, 2011 you accounted for physical
commodities swap transactions as sales and purchases instead of financings. Please summarize this transaction for us in more detail, including the business purpose for the transaction and how you earn a profit/loss on such a transaction. Explain to
us why there was no change in the results of operations when you converted to treating this transaction as a financing in the quarter ended June 30, 2011. Also, provide us with your accounting analysis to support your conclusion to account for
these transactions as financings rather than as sales and purchases.

 2

 Response:

 [*]

 The Company determined that, although there is no guidance that is directly applicable to
these transactions, analogous guidance for product financing arrangements (ASC 470-40) and transfers of financial assets (ASC 860) indicate these transactions are properly accounted for as financings.

[*] The accounting rules state that inventory that is sold with agreement to repurchase at the original price plus carrying and financing costs should be
accounted for as a financing (ASC 470-40-25).

 [*]

 [*] Nevertheless, if the rules for transfers of financial assets were applied, the same financing accounting would result since the seller would retain effective control due to the repurchase agreement
(ASC 860-10-40-5).

 In summary, the most closely analogous guidance available for nonfinancial and financial assets that are sold with
agreement to repurchase is not intent-based and would result in accounting for these transactions as financings, therefore the Company concluded financing treatment was appropriate. As financings, balance sheet netting is not available for these
transactions due to the lack of intent to settle net other than upon default. Previously, the transactions were accounted for as derivatives at fair value and netted by counterparty against other derivatives covered under applicable master netting
agreements. Thus, the increase in the balance sheet was caused by recording the transactions at their full notional fair value rather than derivative fair value and losing the ability to net.

 As financings, these transactions are considered financial instruments eligible for the fair value option and they are carried at fair value under such election. As derivatives the transactions were also
carried at fair

 3

value, therefore the impact on the Company’s results of operations would have been the same whether treated as derivatives or as financings carried at fair value. Given there was no impact
on results and an immaterial impact to total assets and in light of the lack of directly applicable accounting guidance, the Company did not consider this to be a significant matter. Nevertheless, the Company decided that transparent disclosure
would be appropriate.

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

 Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Ruth Porat, Executive Vice President and Chief Financial Officer

Jeffrey M. Kottkamp, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

Suzanne Hayes, Securities and Exchange Commission

Michael Seaman, Securities and Exchange Commission

Staci Shannon, Securities and Exchange Commission

 4

October 28, 2011
 Via E-mail

Ruth Porat Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31, 2010  Filed February 28, 2011
Form 10-Q for the Quarterly Period Ended March 31, 2011
 Filed May 9, 2011
Form 10-Q for the Quarterly Period Ended June 30, 2011 Filed August 8, 2011 File No. 001-11758

Dear Ms. Porat:
 We have reviewed your response dated August 5, 2011 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 disclosure s that clearly identifies new or  revised disclosures.  If
you do not believe our comments apply to your facts and circumstances or do not believe
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, we may have additional comments.  Form 10-Q for the Quarterly Period Ended March 31, 2011

 Item 2. Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 Executive Summary

 Significant Items

Ruth Porat
Morgan Stanley October 28, 2011 Page 2

Morgan Stanley Debt, page 80

 1. Refer to your response to prior comment 19.  We note your disclosure on page 32
of Form 10-Q for the Quarterly Period Ended June 30, 2011 states, “the changes in overall fair value of the short-term  and long-term borrowings (primarily
structured notes) are attributable to ch anges in foreign currency exchange rates,
interest rates, movements in the referen ce price or index for structured notes and
(as presented in the table below) an adju stment to reflect the change in [your]
credit quality.”  To the extent a material  portion of the changes in value resulted
from movement of a specific reference pr ice or changes in a particular index,
please revise your future filings to discu ss and quantify the amount of gain or loss
experienced related to such reference prices or indices.
 Form 10-Q for the Quarterly Period Ended June 30, 2011

 Notes to Condensed Consolidated Financial Statements

 1.  Introduction and Basis of Presentation

 Basis of Financial Information, page 9

2. You disclose that prior to June 30, 2011 you accounted for physical commodities
swap transactions as sales and purchases instead of financings .  Please summarize
this transaction for us in more detail , including the busin ess purpose for the
transaction and how you earn a profit/loss on such a transaction.  Explain to us
why there was no change in the results  of operations when you converted to
treating this transaction as a financing in the quarter ended June 30, 2011.  Also,
provide us with your accounting analysis  to support your conclusion to account
for these transactions as financings rather than as sales and purchases.

You may contact Staci Shannon, Staff Acc ountant, at (202) 551-3374 or me at
(202) 551-3494 if you have questions regard ing comments on the financial statements
and related matters.  Please contact Michae l Seaman, Special Couns el, at (202) 551-3366
or Suzanne Hayes, Assistant Director, at (202) 551-3675 with any other questions.

Sincerely,
   /s/ Kevin W. Vaughn    Kevin W. Vaughn  Accounting Branch Chief

CORRESP
1
filename1.htm

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.

 August 5, 2011

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

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

 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

Form 10-Q for the Quarterly Period Ended March 31, 2011

 Filed May 9, 2011

 File No. 001-11758

Dear Mr. Vaughn:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of July 8, 2011 concerning its Form 10-K for the Year Ended December 31, 2010 (“2010 Form 10-K”) and the Form 10-Q for the quarterly period ended March 31, 2011
(“First Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

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

 Item 1. Business

 Institutional Securities

 1

 Commodities, page 4

 Comment:

1.
Please address the following regarding your response to prior comment two:

•

 Please confirm that in future filings you will disclose the information you provided related to your market making activities in various types of
commodities and commodity-related assets or instruments, including your revenue streams and the other parties that make markets in the same commodities.

•

 Tell us in greater detail the nature of your other energy-related activities, including crude oil, oil products, natural gas, electric power, emission
credits, coal, liquefied natural gas, and related products. Specify the ownership structures for those activities, and quantify the amounts related to these activities as they are reflected in your financial statements by category of activity.

 Response:

 Beginning with the Form 10-Q for the Quarterly Period Ended June 30, 2011 (“Second Quarter Form 10-Q”), the Company will disclose the information provided in its response letter dated
June 9, 2011 related to its market-making activities in various types of commodities and commodity-related assets or instruments, including revenue streams and the other parties that make markets in the same commodities.

The Company’s other energy related activities include the production, storage and transportation of several commodities, including crude oil, oil
products, natural gas, electric power, emission credits, coal, freight, liquefied natural gas and related products. For example, the Company is an electricity power marketer in the U.S. and owns electricity generating facilities in the U.S. and
Europe.

 The Company conducts its other energy related activities through several subsidiaries, including Morgan Stanley Capital Group Inc.,
and also participates in these activities through investments in certain non-consolidated entities.

 Similar to its market-making activities,
revenue streams are generated by each of these other energy-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. Revenues are generated through transaction price spreads to existing market levels with market movements on the portfolios of managed market risk. To a lesser extent, there also are revenue streams from service fees, lease fees, and
investment appreciation or depreciation.

 Beginning with the Second Quarter Form 10-Q, the Company also will enhance its disclosure by
including the above descriptions related to its other energy related activities.

 The carrying value of the Company’s investments in
non-consolidated entities and fixed assets that are associated with other energy related activities was approximately $[*] at December 31, 2010. On page 92 of the 2010 Form 10-K, the Company disclosed contractual obligations, which
includes these other energy related activities (see Operating leases—equipment and Purchase obligations within the table).

 2

 Of the $1,887 million in Purchase obligations $[*] relates to the Company’s commodities
business. In Note 13 on page 202 of the 2010 Form 10-K, the Company disclosed that future minimum lease commitments of $981 million are in connection with its commodities business.

 Financial Holding Company

 Scope of Permitted Activities, page 9

Comment:

2.
Refer to your response to prior comment three and provide proposed disclosure to be included in your next Form 10-Q. If true, please confirm that such disclosure will
clearly address the status of your interactions with the Federal Reserve on these matters and the specific activities you plan execute in order to conform to the requirements of the BHC Act including divestment activities. Please quantify the impact
of such activities, and identify the respective timeframes of any divestitures. If you believe the impact of such activities is not material, disclose that fact as well as the status of your interactions with the Federal Reserve.

 Response:

 The Company will provide the following draft disclosure in its Second Quarter Form 10-Q (additional disclosure underlined). [*]

 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. The Company has received the first of these extensions with respect to certain activities relating to its real estate and other
funds businesses. Although conformance activities continue with respect to these businesses, the Company is in the process of seeking a second extension, and it is possible that the Company will be required in 2012 to seek Federal Reserve
approval for the third additional year permitted by the BHC Act. The Federal Reserve may grant an extension, one year at a time, if it finds that the extension will not be detrimental to the public interest. Based on the real estate and
other investments and businesses which are required to be sold, there would be no material adverse impact on the Company’s condensed consolidated financial statements.

In addition, the Company is engaged in discussions with the Federal Reserve regarding its commodities activities, as the BHC Act also
grandfathers any “activities related to the trading, sale or investment in commodities and underlying physical properties,” provided that the Company was engaged in “any of such activities as of September 30, 1997 in the United
States” and provided that certain other conditions that are within the Company’s reasonable control are satisfied. 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. At this time the Company does not believe, based on
its interpretation of

 3

applicable law, that any such required divestment would have a material adverse impact on its condensed consolidated financial statements.

Activities Restrictions under the Volcker Rule, page 10

 Comment:

3.
Refer to your response to prior comment four. Please revise your disclosure in future filings to address your plans to dispose of your in-house quantitative proprietary
trading unit, Process Driven Trading, in 2012 in advance of the effectiveness of the Volcker Rule, and the impact of this trading unit on your financial condition, results of operations, and liquidity for each period presented. Additionally, if true
please revise your disclosure in future filings to state that you 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. Disclose the extent to which you are monitoring regulatory developments related to the Volcker Rule and confirm in your disclosure that when the regulations are final, you will be in a position to complete your review of your relevant
activities and make plans to implement compliance with the Rule.

 Response:

Please see the Company’s response to comment 4 immediately below.

 Item 1A. Risk Factors, page 23

 Comment:

4.
We note from your response to prior comment five that you are reviewing your proprietary trading operations, that the regulations implementing the substantive Volcker
Rule provisions have not been published and that you believe you can not quantify how the Volcker Rule may impact your business. However, it is not clear why you have not disclosed how you define “proprietary trading” or quantified the
revenues generated from your proprietary trading business. Please include a risk factor in future filings that does so. The risk factor should address the fact that the Volker Rule has not yet defined proprietary trading and may be more inclusive or
exclusive than your definition. It should also describe the risks associated with the potential elimination of your proprietary trading business (as you define it) and businesses that, while falling outside of your definition, may qualify as
proprietary trading under the Volcker Rule.

 Response:

The scope of the restriction on “proprietary trading” has yet to be defined by the rulemaking agencies. Without that guidance, the Company
is unable to determine what activities may be prohibited in the future (other than for standalone proprietary trading businesses). The Company will enhance its risk factors disclosure related to the Volcker rule provision, which will include
disclosure related to Process-Driven Trading. The Company notes that there may be a period where there continues to be ambiguity until after the rule is made final and/or the full implications of a final rule can be determined.

 4

 The Company will provide the following draft disclosure in its Second Quarter Form 10-Q (additional
disclosure underlined).

 The financial services industry is subject to extensive regulation, which is undergoing major
changes that will impact our business.

 As a major financial services firm, we are subject to extensive regulation by
U.S. federal and state regulatory agencies and securities exchanges and by regulators and exchanges in each of the major markets where we operate. We also face the risk of investigations and proceedings by governmental and self-regulatory agencies
in all countries in which we conduct our business. Interventions by authorities may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. In addition to the monetary consequences, these measures could, for example,
impact our ability to engage in, or impose limitations on, certain of our businesses. The number of these investigations and proceedings, as well as the amount of penalties and fines sought, has increased substantially in recent years with regard to
many firms in the financial services industry, including us. Significant regulatory action against us could materially adversely affect our business, financial condition or results of operations or cause us significant reputational harm, which could
seriously harm our business. The Dodd-Frank Act also provides a bounty to whistleblowers who present the SEC with information related to securities laws violations that leads to a successful enforcement action. As a result of this bounty, we may
face an increased number of investigations by the SEC.

 In response to the financial crisis, legislators and regulators, both
in the U.S. and worldwide, have adopted, or are currently considering enacting, financial market reforms that have resulted and could 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.

 For example, the Volcker Rule provision of the Dodd-Frank Act will have an impact on us, including potentially limiting
various aspects of our business. With respect to the “proprietary trading” prohibition of the Volcker Rule, we have previously announced plans to dispose of our in-house proprietary quantitative trading unit, Process-Driven Trading
(“PDT”), in 2012.

 For the year ended December 31, 2010, PDT did not have a material impact on our
financial condition, results of operations and liquidity. We have also previously exited

 5

other standalone proprietary trading businesses (defined as those businesses that were dedicated solely to investing our capital), and we are continuing to liquidate legacy positions related
to those businesses. Beyond the restriction on standalone proprietary trading businesses, any additional limitations will depend on the details of agency rulemaking, which have not been published. Given the lack of clarity, we are unable to
identify which other parts of our business will or might be defined to be “proprietary trading” or, even if defined as “proprietary trading,” whether we would benefit from a “permitted activity” exception, such as
market-making or hedging. We are closely monitoring regulatory developments related to the Volcker Rule, and when the regulations are final, we will be in a position to complete a review of our relevant activities and make plans to implement
compliance with the Volcker Rule, which will likely not require full conformance until July 2014, subject to extensions.

 Comment:

5.
We note your response to prior comment six. Please expand your risk factor disclosure in future filings to quantify your Monoline exposures and quantify the costs of
your hedging program. Additionally, revise Management’s Discussion and Analysis of Financial Condition and Results of Operations to explain why your hedging program continues to become more costly and difficult to effect.

 Response:

 The Company will expand its risk factor disclosure to quantify its Monoline exposures and hedging costs and revise Management’s Discussion and Analysis of Financial Condition and Results of
Operations to explain why hedging continues to become more costly and difficult to effect. The Company will also modify its Management’s Discussion and Analysis of Financial Condition and Results of Operations to reflect significant
developments in its Monoline exposures.

 The Company will provide the following draft disclosure in its Second Quarter Form 10-Q (additional
disclosure underlined).

 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

CORRESP
1
filename1.htm

Correspondence

 July 11, 2011

 Mr. Kevin W. Vaughn

 Accounting Branch Chief

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 Fiscal Year Ended December 31, 2010

Filed February 28, 2011

Form 10-Q for the Quarterly Period Ended March 31, 2011

Filed May 9, 2011

File No. 001-11758

 Dear Mr. Vaughn:

 Morgan Stanley (the “Company”) received your letter dated July 8, 2011, concerning the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and the Form 10-Q
for the quarterly period ended March 31, 2011.

 We respectfully request an extension of time to respond to your letter and intend to
provide our response on or before August 5, 2011.

 Please feel free to contact me at 212-761-6686 if you would like further clarification
or additional information.

 Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:

Suzanne Hayes, Securities and Exchange Commission

Michael Seaman, Securities and Exchange Commission

Staci Shannon, Securities and Exchange Commission

Ruth Porat, Executive Vice President and Chief Financial Officer

July 8, 2011
 Via E-mail

Ruth Porat Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended December 31, 2010  Filed February 28, 2011  Form 10-Q for the Quarterly Period Ended March 31, 2011  Filed May 9, 2011
File No. 001-11758

Dear Ms. Porat:
 We have reviewed your response date d June 9, 2011 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 disclosure s that clearly identifies new or  revised disclosures.  If
you do not believe our comments apply to your facts and circumstances or do not believe
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, we may have additional comments.  Form 10-K for Fiscal Year Ended December 31, 2010

 Item 1.  Business

 Institutional Securities

 Commodities, page 4

1. Please address the following regarding your response to prior comment two:

Ruth Porat
Morgan Stanley July 8, 2011 Page 2

 Please confirm that in future filings you will disclose the information you
provided related to your market maki ng activities in va rious types of
commodities and commodity-related assets or instruments, including your revenue streams and the other parties that make markets in the same commodities.

 Tell us in greater detail the nature of  your other energy-re lated activities,
including crude oil, oil products, natura l gas, electric power, emission credits,
coal, liquefied natural gas, and rela ted products.  Specify the ownership
structures for those activities, and quantify the amounts related to these
activities as they are refl ected in your financial st atements by category of
activity.
 Financial Holding Company

 Scope of Permitted Activities, page 9

2. Refer to your response to prior comment th ree and provide proposed disclosure to
be included in your next Form 10-Q.  If true, please confirm that such disclosure
will clearly address the stat us of your interactions w ith the Federal Reserve on
these matters and the specific activities you plan execute in order to conform to
the requirements of the BHC Act including divestment activities.  Please quantify
the impact of such activities, and identify the respective timeframes of any divestitures.  If you believe the impact of such activitie s is not material, disclose
that fact as well as the st atus of your interactions w ith the Federal Reserve.
 Activities Restrictions under the Volcker Rule, page 10

3. Refer to your response to prior comment f our.  Please revise your disclosure in
future filings to address your plans to  dispose of your in-house quantitative
proprietary trading unit, Process Driven  Trading, in 2012 in advance of the
effectiveness of the Volcker Rule, and the impact of this trading unit on your
financial condition, results of  operations, and liquidity for each period presented.
Additionally, if true pl ease revise your disclosure in future filings to state that you
cannot currently identify th e trading desks and other related business units or
other activities that might be within the sc ope of the final regulatory definition of
proprietary trading.  Disclose the extent  to which you are monitoring regulatory
developments related to the Volcker Rule  and confirm in your disclosure that
when the regulations are final, you will be  in a position to complete your review
of your relevant activities and make pl ans to implement compliance with the
Rule.

Ruth Porat
Morgan Stanley July 8, 2011 Page 3
 Item 1A.  Risk Factors, page 23

4. We note from your response to prior co mment five that you are reviewing your
proprietary trading operations , that the regulations implementing the substantive
Volcker Rule provisions have not been pub lished and that you believe you can not
quantify how the Volcker Rule may impact  your business.  However, it is not
clear why you have not disclosed how you define “proprietary trading” or
quantified the revenues genera ted from your proprietary trading business.  Please
include a risk factor in future filings that  does so.  The risk factor should address
the fact that the Volker Rule has not ye t defined proprietary trading and may be
more inclusive or exclusive than your defi nition.  It should also describe the risks
associated with the potentia l elimination of your proprie tary trading business (as
you define it) and businesses that, while falling outside of your definition, may
qualify as proprietary trad ing under the Volcker Rule.

5. We note your response to prior comment si x.  Please expand your risk factor
disclosure in future filings to quantif y your Monoline exposures and quantify the
costs of your hedging program.  Additiona lly, revise Management’s Discussion
and Analysis of Financial Condition and Results of Operations to explain why
your hedging program continues to become  more costly and difficult to effect.

6. We note your response to prior comment seven and we reissue the comment.
Please note, cross referencing the discussi on to other parts of your document that
contain the details that allo w investors to understand the magnitude of the risk and
consequences is not sufficient.
Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 Business Segments, page 54

7. Refer to your response to prior comment te n.  Please revise your disclosure in
future filings to clarify the nature of the significant sales restrictions placed on your principal transactions – investments,  and describe the na ture and amount of
such investments.

8. Refer to your response to prior comment te n.  Please tell us what consideration
you gave to including a tabular disclosure  by business or related product type for
your revenues in the Global Wealth Management Group segment similar to the sales and trading revenues by business ta ble disclosed on page 58.  If you have
revenues by business or product type availa ble for this segment, please revise
your disclosure in future filings  to include such information.

Ruth Porat
Morgan Stanley July 8, 2011 Page 4
 Liquidity and Capital Resources

 Global Liquidity Reserve, page 85

9. Refer to your response to prior comment 11.  Please revise your disclosure in
future filings to separately disclose your global liquidity reserve by foreign and domestic Non-bank a nd Bank subsidiaries.
 Item 7A. Quantitative and Qualita tive Disclosures about Market Risk

 Risk Management

 Credit Risk

 Institutional Securities Activities

 Credit Exposure – Corporate Lending

 “Event-Driven” Loans and Lending Commit ments at December 31, 2010 and December
31, 2009, page 109

10. Refer to your response to prior comment 13.  Please clarify whether you intend to
include the discussion from your respons e in future filing disclosures.
Additionally, please revise your disclosure in  future filings to clarify the meaning
of the term, distributions, and state the types of entities to which you sell or
distribute the event-driven loans, includi ng your relationship w ith such entities.
 Item 11.  Executive Compensation

 Definitive Proxy Statement on Schedule 14A

 Compensation Discussion and Analysis, page 23

11. Your references to “performance prioriti es set at the beginn ing of the year,”
“objective performance goals,” and “qua litative priorities” indicate that
performance based compensation is based on the achievement of preset goals.
Please provide draft disclosure to be included in future filings identifying
quantitative and qualitative goals used to  determine performance based awards.
To the extent that goals were set as thre sholds or ranges, this information should
be disclosed.  When discussing perfor mance based awards, you should indicate
the extent to which goals were achieved.  To the extent that there were specific goals for each named executive officer, th e goals should be separately identified.

12. We note your disclosure on pages 23 and 32 that Mr. Gorman’s compensation for
2010 was lower than his 2009 compensation because you did not meet “certain financial priorities” during 2010.  Please tell us what financial priorities were not

Ruth Porat
Morgan Stanley July 8, 2011 Page 5
 met and specifically describe how not meeting the priorities affected Mr.
Gorman’s 2010 compensation.

13. We note your disclosure on page 26 relati ng to target PSUs earned, as determined
by applying the applicable MS ROE and MS TSR Rank multiplier to the target
award.  Please disclose the target awards.
 Item 15.  Exhibits and Financial Statement Schedules

14. We note your response to prior comment 26.  We are not persuaded that the
documents related to the joint ventures are not material contract s.  In particular,
we note the parenthetical qualification in  your response indica ting that the rights
and obligations under the agreements disc losed in your Form 10-K are material.
Please file the documents related to the joint ventures as exhibits to your
upcoming Form 10-Q.
 Exhibit 10.2

15. We note your response to prior comment 27.  Please tell us how you concluded
that the joint venture agreement is the type of agreement contemplated by Item
601(b)(2) of Regulation S-K, as  opposed to Item 601(b)(10).

Form 10-Q for the Quarterly Period Ended March 31, 2011
 Item 1. Financial Statements

 Notes to Condensed Consolidated Financial Statements

 6.  Variable Interest Entities a nd Securitization Activities, page 34

16. You disclose that your involvement with VI Es arises from structuring of credit-
linked notes or other asset -repackaged notes designed to meet the investment
objectives of clients.  Please tell us wh ether your credit-linked notes and other
asset-repackaged notes include re-securi tization transactions , and if so, please
address the following:

 Confirm the amount of re-securitizati on vehicles you consolidate and the
amount you do not consolidate, and provi de us with you accounting analysis
to support whether you consolidate the vehicles.

 Quantify the total assets of your re-s ecuritization vehicles and amount of
securities that were re-securi tized in the periods presented.

 Quantify the impact of these vehicles on your consolidated financial position
and results of operations for all period s presented, including the amount of

Ruth Porat
Morgan Stanley July 8, 2011 Page 6
 interest held in unconsolidated re-secur itization vehicles and total assets and
liabilities in consolidated vehicles.
 Tell us what years you participated  in re-securitization activities.

 Tell us whether your client s are requesting the re-secu ritization, th e types of
parties that request your assistance in  performing the re -securitization, and
discuss their role in the design of the ve hicle and the structure of the securities
to be issued.

 Tell us whether there are situations in which you are doing re-securitizations
for your own liquidity or capital pur poses, and tell us the other parties
involved that have discretion ove r the design of the vehicle.

17. You consolidate certain of your mortgage  and asset-backed securitizations and
collateralized debt obligations, and do not  consolidate certain others since you are
not the primary beneficiary.  You disclo se that you consider servicing and
collateral management decisions as repr esenting the power to  make the most
significant economic decisions in  transactions such as s ecuritizations or collateral
debt obligations.  Please tell us, and expa nd your disclosure in future filings to
address the following:

 The specific key differences resulting in  the non-consolidation of certain of
your securitizations and collateralized de bt obligations.  For example, clarify
whether the key difference is the lack of  power over the vehicles, or the lack
of an obligation to either absorb lo sses or receive benefits that could
potentially be significant and th e nature of the key difference.

 Clarify the roles you maintain or are requi red to maintain for the securitization
vehicles for which you do not consolidate.

 We note that you disclose on page 177 of your Form 10-K that you do not
provide additional support in securitiza tion transactions th rough contractual
facilities, such as liquidity facilities , guarantees or similar derivatives, and
although not obligated, you ge nerally make a market in  the securities issued
by SPEs in these transactions.  Please describe the circumstances where you
have purchased assets or provided othe r forms of liquidity, for securitization
and collateralized debt obligation vehi cles, but were not required to do so.
Specifically, address the business reasons  for such purchases or liquidity,
including whether you were providing prot ection to security investors or your
customers.

 Discuss the reasons certain deals are struct ured to result in your qualifying or
not qualifying as the primary beneficiary.

Ruth Porat
Morgan Stanley July 8, 2011 Page 7
  Identify the parties that drive the structure of the vehicles.

18.  Segment and Geographic Information

 Geographic Information, page 69

18. It appears that you omitted the regional  view of your income (loss) from
continuing operations before income taxes,  net income (loss) applicable to the
company and total assets.  Please confirm that you will include this information in
future filings.
 Item 2. Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 Executive Summary

 Significant Items

 Morgan Stanley Debt, page 80

19. You disclose net revenues reflected negative revenues of $189 million in the
quarter ended March 31, 2011 from the tightening of your credit spreads on
certain long-term and short-term borrowings , primarily structured notes that are
accounted for at fair value.  We also  note you recorded a loss on long-term
borrowings for which the fair value option was elected of $1.266 billion in
Principal Transactions – Trading in  the quarter ended March 31, 2011 as
disclosed on page 27.  Please revise your disclosure in future filings to more clearly describe the underlying reasons for the loss on your long-term borrowings
recorded at fair value that was not due to your own credit quality.
 Business Segments

 Institutional Securities

 Investment Banking, page 84

20. You disclose that Investment banking revenues for the quarter ended March 31,
2011 increased 14% from the comparable  period in 2010, reflecting higher
revenues from equity and fixed income underwriting transactions and higher
advisory fees.  Please revise your disclosu re in future filings  to include tabular
disclosure regarding the vol ume of transactions underlying your underwriting and
advisory fee revenues.  Specifically, c onsider quantifying the volume of equity
offerings and fixed income offerings  for which you received underwriting
revenues, as well as announced and completed mergers, acquisitions and
restructuring transactions for whic h you received advisory revenues.

Ruth Porat
Morgan Stanley July 8, 2011 Page 8
 Item 3.  Quantitative and Qualitative Disclosures about Market Risk

 VaR, page 115

21. You disclose that you use VaR as one of a range of risk management tools and
VaR methodology has various strengths a nd limitations, which include, but are
not limited to use of historical changes in  market risk factors, which may not be
accurate predictors of future market c onditions, and may not fully incorporate the
risk of extreme market events that are outsized relative to observed historical
market behavior or reflec t the historica

CORRESP
1
filename1.htm

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.

 1

 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

 2

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.

 3

 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

 5

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):

 6

 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

May 16, 2011
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-Q for Quarterly Period Ended
  September 30, 2010   Filed November 8, 2010
File No. 001-11758

Dear Ms. Porat:
 We have completed our review of your Fo rm 10-Q for the quarterly period ended
September 30, 2010 filed on November 8, 2010.  We  remind you that our comments or changes
to disclosure in response to our comments do not foreclose the Commission from taking any
action with respect to the company or the filing and the company may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United St ates.  We urge all persons who are responsible for the accuracy
and adequacy of the disclosure in the filing to be certain that the filing includes the information
the Securities Exchange Act of 1934 and all applicable rules require.

Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

Correspondence

 May 11, 2011

Ms. 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 Fiscal Year Ended December 31, 2010

 Filed February 28, 2011

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) received your letter dated May 6, 2011, concerning the Company’s Annual
Report on Form 10-K for the year ended December 31, 2010.

 We respectfully request an extension of time to respond to your letter and
intend to provide our response on or before June 9, 2011.

 Please feel free to contact me at 212-761-6686 if you would like further
clarification or additional information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Michael Seaman, Securities and Exchange Commission

Staci Shannon, Securities and Exchange Commission

Kevin W. Vaughn, Securities and Exchange Commission

Ruth Porat, Executive Vice President and Chief Financial Officer

May 6, 2011
   Ruth Porat Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036
Re: Morgan Stanley  Form 10-K for Fiscal Year Ended December 31, 2010  Filed February 28, 2011
File No. 001-11758
 Dear Ms. Porat:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us w ith 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.  If you do not believe our comments apply to your facts and
circumstances or do not believe 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, we ma y have additional comments.
            Form 10-K for Fiscal Year Ended December 31, 2010

General

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

Ruth Porat
Morgan Stanley May 6, 2011 Page 2  Item 1.  Business

 Institutional Securities

 Commodities, page 4

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 ma rkets 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 activ ities that go into making a market in
these commodities and describe the t ypes 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 financ ial statements, including the amounts
involved.

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

 Scope of Permitted Activities, page 9

3. We note your disclosure that you have re quested 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.
 Activities Restrictions under the Volcker Rule, page 10

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

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

Ruth Porat
Morgan Stanley May 6, 2011 Page 3

b. Identify the trading desks and other rela ted business units that participate in
activities you believe meet the definiti on of proprietary trading.  Identify
where these activities ar e 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 ta ke to terminate or
dispose of the rest of  these components.
 c. Revise your future filings to clearly id entify aspects of your business that are
similar to but excluded from your defini tion of “proprietary trading” for these
purposes.  Clearly disclose how you differentiate such activities.  Tell us the extent to which you believe it is possibl e that such activit ies will be scoped
into the final regulatory defin ition of proprietary trading.

Item 1A.  Risk Factors, page 23

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 ba sis for your belief.

6. We note that your exposure to the M onolines at December 31, 2010 included $1.5
billion in insured municipal bond securi ties 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 addi tional losses could be incurred as market
conditions evolve.  Please provi de risk factor disclosure in  future filings or tell us
why you believe risk factor di sclosure is not appropriate.

7. Many of your risk factor discussions are too vague to be meaningful to investors.  For example:

• “Our borrowing costs and access to the debt capital markets depend
significantly on our cr edit ratings;”
• “Holding large and concentrated positions may expose us to losses;”
• “We have incurred, and may continue to incur, significant losses in the real
estate sector;” and
• “The financial services industry is su bject to extensive regulation which is
undergoing major changes that will impact our business.”

Please provide draft disclosure to be incl uded in future filings expanding your risk
factors discussions to identify any specifi c situations that make you particularly
vulnerable to the identified risks, incl uding regulatory changes.  Additionally,

Ruth Porat
Morgan Stanley May 6, 2011 Page 4
provide a more specific discussion of th e potential consequences.  For example,
with respect to the risk discussion relating to your dependence on credit ratings, discuss the negative ratings outlook and the specific consequences in the event of
a one-notch and two-notch downgrade.
 Acquisition and Joint Venture Risk

 We may be unable to fully capture  the expected value…, page 31

8. Please provide us with draft disclosure to be included in future filings that more fully describes the risks associated with your joint ventures w ith Mitsubishi UFJ
Financial Group, Inc., includi ng a description of the ow nership arrangements and
quantification of any prior losses resulting from the joint ventures.
 Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations
 Significant Items

 Monoline Insurers, page 52

9. Please tell us and enhance your disclosure in future filings to quantify and discuss your total remaining expos ure related to MBIA.
 Business Segments, page 54

10. We note your various discussions of Principal transactions Trading and
Investment revenues within each of your segments between pages 56 and 72.  Please respond to the following and expand your disclosures in future filings to
address the following:    a. Tell us and expand your disclosures to pr ovide further discussion of the types
of instruments that generate the principa l transactions revenue by type of risk
and how those instruments affect the financial statement line items.  For
example, discuss how interest rate deri vatives generate principal transactions
revenue (changes in fair value which a ffect X line item, and fee charged to
customer, which affects Y line item, etc).

b. Describe the significant drivers of the principal transactions revenue.  For
example, discuss how much of the revenue  is driven by transaction fees versus
changes in fair value of the instruments.

c. Tell us in more detail how principal transactions revenue is generated by
customer demand, the steps you take to f ill the order, and how the associated
revenue line items are affected.  For exam ple, if a customer requests a foreign
exchange swap, discuss the types of fees charged for the transaction, and

Ruth Porat
Morgan Stanley May 6, 2011 Page 5
whether the principal transactions re venues you would recognize is the other
side of the swap transaction that the customer requested.

d. Revise your future filings to tie your disclosures elsewhere of gains and losses on derivative contracts to your principa l transactions reve nue line items.
 Liquidity and Capital Resources, page 81

11. We note from your disclosure in footnote 22 to your financial statements that as
of December 31, 2010 approximately $5.1 bill ion of earnings has been designated
as being permanently held outside of the United States.  Please revise your MD&A to discuss the impact this designation has on your available liquidity.
 Global Liquidity Reserve, page 85

12. We note your disclosure that “the vast ma jority” of the assets held in the Global
Liquidity Reserve can be monetized on a next -day basis.  In future filings, please
revise your liquidity discussion to disclose  the total amount that can be monetized
on a next-day basis as of December 31, 2010.
 Item 7A. Quantitative and Qualita tive Disclosures about Market Risk

 Risk Management

 Credit Risk

 Institutional Securities Activities

 Credit Exposure – Corporate Lending

 “Event-Driven” Loans and Lending Commit ments at December 31, 2010 and December
31, 2009, page 109

13. Please provide us with more information regarding your “Event-Driven” lending.  In your response, please provide us with additional info rmation as to the purpose
of your event driven loans, the credit quality of the borrowers, the typical terms of
the loans, charge-off experien ce, and the amount of loans in non-accrual status as
of the balance sheet date.  Additionally, explain to us why the loan balance is
primarily reduced through “distributions” rather than repayments based on your
rollforward on page 109.

Credit Exposure – Derivatives, page 109

14. Your OTC Derivative Product tables on pages 110-112 present interest rate and
currency swaps, interest rate options, cr edit derivatives and other fixed income
securities contracts on a singl e line item.  In future f ilings, please revise your

Ruth Porat
Morgan Stanley May 6, 2011 Page 6
tables on pages 110-112 to separately report your interest rate swaps and options, your currency swaps, and your credit derivatives.

15. In future filings, please revise Note 2 to your table at the top of page 113 to
quantify the impact of your hedges of Monoline derivative co unterparty exposure
that is excluded from this table.

16. Please revise your future filings to quantif y and more clearly discuss the impact of
your participation in novating certain credit default swap contracts with external counterparties to a central clearinghouse.

17. We note various disclosures throughout  your filing regarding your significant
exposure to various types of credit deri vatives. To the extent material and
applicable, please revise your future fili ngs to address the following regarding
your credit derivatives:

a. For the notional and fair value amount of your credit derivatives as of the
balance sheet dates presented, please  quantify the extent to which the
positions held in your credit derivatives  portfolio represent a purchase of
credit default protection versus a sale of credit default protection, as well as
the types of instrument used (e.g., tota l rate of return swap, credit default
swap, derivatives on credit linked notes, derivative interests in mortgage-
related collateralized debt  offerings, certain types of ABS credit default
swaps, basket credit default swaps, CDO-squared positions, or other credit
derivatives). Link and if nece ssary reconcile this data to your existing tables in
this section as well as y our financial statement foot notes.  Within these two
categories of protection sold and purch ased, please separately quantify the
extent to which the derivative activ ity was for the following purposes:

i. Provide default risk protection to  offset credit exposure to your
holdings of the related reference enti ty’s debt in your loan portfolio,
investment portfolio, or loan  commitments outstanding;
ii. Create new credit exposure fo r your own trading purposes;
iii. Reflect credit exposures taken for th e benefit of your clients; and
iv. Provide an offset to credit exposure taken for the benefit of clients.

b. Separately quantify the gross realized gains and losses from your credit derivative
activity.

c. More clearly discuss the settlement triggers that are typical to the swap contracts in your credit derivatives portfolio. To the extent that the nature of the triggers
varies within your portfolio, discuss that fact accordingly.

d. Discuss your overall strategies employed in your credit derivatives portfolio as well as any changes in those strategies during the periods presented.

Ruth Porat
Morgan Stanley May 6, 2011 Page 7
e. Discuss any trends experienced within the portfolio both in terms of positions
held and realized gains and losses. Specifically disclose the reasons for the
significant increases in the notional amounts as well as the reasons for the
changes in the fair values of the swaps. Discuss any expected changes to those trends.

Item 8.  Financial Statements and Supplementary Data
 Notes to Consolidated Financial Statements

 1.  Introduction and Basis of Presentation

 Basis of Financial Information, page 128

18. You disclose that at December 31, 2 010, you netted securities received as
collateral in connection with securitie s lending arrangements aggregating $4.6
billion with identical securities, prim arily Corporate equ ities, in Financial
instruments sold, not yet purchase d.  At December 31, 2009, you did not net
securities received as collateral with  Financial instruments sold, not yet
purchased, as amounts did not materially  affect the Company’s consolidated
statement of financial condition.  Plea se tell us how your practice meets the
criteria in ASC 210-20-45.  Additionally, please tell us why you changed your practice in 2010, including whether and if  so, how your current practice of netting
is preferable.
 2.  Summary of Significant Accounting Policies

 Allowance for Loan Losses, page 138

19. You disclose payments received on nonaccrual loans held for investment are applied to principal if there is doubt regarding the ultimate collectability; if
collection of the principal is  not doubtful, interest inco me is recognized on a cash
basis.  Please tell us and more clearly disclose in your future filings under what circumstances a loan is on nonaccrual stat us but is not doubtful of collection.
Also, please tell us and more clearly di sclose in your future filings why you
differentiate between the nonaccrual lo ans that are doubtful of collection by
applying cash payments only to principa l and the nonaccrual loans that are not
doubtful of collection by applying payments to both income and principal.
 4. Fair Value Disclosures

 Collateralized Interest Rate Derivative Contracts, page 148

20. We note your disclosure here as well as on page 48 regarding your change in valuation methodology to use the overnight indexed swap curve as an input to
value substantially a ll of your collateralized interest  rate derivative contracts.

Ruth Porat
Morgan Stanley May 6, 2011 Page 8
You indicate the result of this change was a pre-tax gain of approximately $176 million.  Please address the following:

a. Tell us how you determined that your new methodology was preferable in more accurately valuing these contracts.

b. Tell us why you changed this methodology for “substantially” but not all of
your collateralized interest ra te derivative contr

CORRESP
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filename1.htm

Correspondence

 March 2, 2011

 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-Q
for Quarterly Period Ended

 September 30, 2010

 Filed November 8, 2010

 File No. 001-11758

Dear Mr. Telewicz:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of February 17, 2011 concerning its Form 10-Q for the Quarterly Period Ended September 30, 2010 (“Third Quarter Form 10-Q”).

For your convenience, we have restated your comment below.

 1

 Form 10-Q for the quarterly period ended September 30, 2010

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 Liquidity and Capital Resources, page 118

 Comment:

1.
We note your response to our prior comment two. Please clarify for us whether any third parties, including any clearing bank, hold liens on securities that have been
reversed to the company on an overnight basis by its subsidiaries. To the extent these liens exist, tell us how you concluded it would be appropriate to include these assets in your Global Liquidity Reserve.

Response:

 Pursuant to
conversations with the staff on February 23 and February 25, 2011, the asset balances included in the Global Liquidity Reserve disclosure are end of day amounts that are not subject to any liens or encumbrances by third parties, including
any clearing banks. However, the Company does engage in daily financing transactions with its major broker-dealer subsidiaries, in which it is exposed to intra-day settlement risk in connection with the clearing and settlement of these transactions.

 The Company enhanced its Liquidity and Capital Resources disclosure regarding the intra-day settlement risk in its Form 10-K for the year
ended December 31, 2010.

 2

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

 Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Deputy Chief Financial Officer

cc:
Jennifer Monick, Securities and Exchange Commission

 Ruth Porat, Chief Financial Officer

 Gregory G. Weaver, Deloitte & Touche
LLP

 James V. Schnurr, Deloitte & Touche LLP

 3

February 17, 2011
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-Q for Quarterly Period Ended
  September 30, 2010   Filed November 8, 2010
File No. 001-11758

Dear Ms. Porat:
 We have reviewed your response letter date d February 14, 2011 and have the following
additional comment.  In our comment, 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 advi sing us when you will provide the requested
response.  If you do not believe our comment applies to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to this comment, we may have additional comments.

Ruth Porat
Morgan Stanley  February 17, 2011 Page 2

Form 10-Q for the quarterly period ended September 30, 2010

 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

 Liquidity and Capital Resource, page 118

1. We note your response to our prior comment tw o.  Please clarify for us whether any third
parties, including any clearing ba nk, hold liens on securities th at have been reversed to
the company on an overnight basis by its subsidia ries.  To the extent these liens exist, tell
us how you concluded it would be appropriate  to include these a ssets in your Global
Liquidity Reserve.

You may contact Jennifer Moni ck, Senior Staff Accountan t, at 202-551-3295 or me at
202-551-3438 if you have questions.
Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

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.

 February 14,
2011

 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-Q
for Quarterly Period Ended

 September 30, 2010

 Filed November 8, 2010

 File No. 001-11758

Dear Mr. Telewicz:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of January 31, 2011 concerning its Form 10-Q for the Quarterly Period Ended September 30, 2010 (“Third Quarter Form 10-Q”).

For your convenience, we have restated your comments below.

 1

 Form 10-Q for the quarterly period ended September 30, 2010

Financial Statements

 Notes to
Condensed Consolidated Financial Statements

 11. Commitments, Guarantees and Contingencies

Other Guarantees and Indemnities

Representation and Warranties on Certain Securitized Assets, page 67

 Comment:

1.
We have considered your response to our prior comment one. Please clarify for us whether your exposure to the representations and warranties discussed in your response
stems from your activities as a loan originator, servicer or the underwriter of securitization transactions. As part of your response, please provide some quantification of the volume of similar activity that is potentially subject to similar
repurchase requests in the future, such as volume of loans sold or securitized as well as whether similar activities continue to occur. In addition, please consider enhancing your disclosures to include this information.

Response:

 While the
Company originated some of the residential mortgage loans that it securitized, the Company’s potential responsibility for representations and warranties associated with residential mortgage loans securitized by the Company is primarily
attributable to the Company’s role as a sponsor of certain U.S. residential mortgage backed securitizations (“RMBS”) containing loans originated by third parties. In that capacity, the Company agreed to make representations and
warranties, or to be responsible for representations and warranties made by third-party sellers, on certain loans. In other instances, third-party sellers made the representations and warranties, and the Company did not agree to be responsible for
them.

 Between 2004 and 2007, the Company sponsored RMBS containing approximately [*]. Of that amount, the Company made representations and
warranties concerning approximately [*]. In addition, the Company agreed to be responsible for the representations and warranties made by third-party sellers on approximately [*]. The Company did not make, or otherwise agree to be responsible for,
most of the representations and warranties on approximately [*]. The Company has not sponsored any U.S. RMBS since 2007.

 The Company also has
potential responsibility for representations and warranties associated with its role as an originator of commercial mortgage loans that it securitized in commercial mortgage backed securitizations (“CMBS”). Between 2004 and 2010, the
Company originated

 2

approximately [*] that were securitized. In addition, the Company originated the U.S. Dollar equivalent of approximately [*] and [*]. The Company is generally responsible for the representations
and warranties associated with all or almost all of these loans. The Company continues to originate and securitize commercial mortgages subject to representations and warranties provided by the Company.

We are currently planning to include additional quantitative information in our disclosure regarding Representations and Warranties on Certain
Securitized Assets in our Form 10-K for the year ended December 31, 2010.

 Management’s Discussion and Analysis of Financial
Condition and Results of Operations

 Liquidity and Capital Resources, page 118

Comment:

2.
We note your disclosure on page 122 of your Form 10-Q that your Global Liquidity Reserve of $162 billion as of September 30, 2010 is made up of all unencumbered
assets that are not pledged as collateral on either a mandatory or a voluntary basis and that they do not include other unencumbered assets that are available to the Company for additional monetization. Please tell us if you are aware of any
instances where certain of the assets included as part of your Global Liquidity Reserve disclosure may have in fact been subject to a lien or other encumbrance and thus not appropriately included as part of the Global Liquidity Reserve. As part of
your response, please discuss the following, and consider revising the appropriate sections of your future Exchange Act filings to address the following:

a.
Discuss the circumstances surrounding any situations where this may have occurred and how they were identified;

b.
Quantify the amount(s) and period(s) impacted;

c.
Discuss the changes or steps taken to ensure that any of these types of situations do not occur in the future; and

d.
Discuss the Company’s conclusions regarding how any circumstances, if any, where amounts were improperly included in the Global Liquidity Reserve were not material
to the periodic reports affected.

 Response:

 With respect to the matter cited by the Staff which is included in the Third Quarter Form 10-Q, in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results
of Operation—Liquidity and Capital Resources,” we confirm the language is accurate.

 In connection with the Staff’s comments,
the Company performed a thorough review of the assets included in the Global Liquidity Reserve amounts reported in the Third Quarter Form 10-Q. [*]

 3

 [*]

 4

*            *
 *            *            *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

 Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:
Jennifer Monick, Securities and Exchange Commission

 Ruth Porat, Chief Financial Officer

 Gregory G. Weaver, Deloitte & Touche
LLP

 James V. Schnurr, Deloitte & Touche LLP

 5

January 31, 2011
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-Q for Quarterly Period Ended
  September 30, 2010   Filed November 8, 2010
File No. 001-11758

Dear Ms. Porat:
 We have reviewed your response letter da ted January 14, 2011 and have the following
additional comments.  In 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 advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

Ruth Porat
Morgan Stanley  January 31, 2011 Page 2

Form 10-Q for the quarterly period ended September 30, 2010

 Financial Statements

 Notes to Condensed Consolidated Financial Statements

 11. Commitments, Guarantees and Contingencies

 Other Guarantees and Indemnities

 Representation and Warranties on Cert ain Securitized Assets, page 67

 1. We have considered your response to our prior comment one.  Please clarify for us
whether your exposure to the representations and warranties discussed in your response
stems from your activities as a loan orig inator, servicer or  the underwriter of
securitization transa ctions.  As part of your response,  please provide some quantification
of the volume of similar activity that is poten tially subject to similar repurchase requests
in the future, such as volume of loans sold or securitized as well as whether similar activities continue to occur.  In addition, please consid er enhancing your disclosure to
include this information.

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

 Liquidity and Capital Resource, page 118

2. We note your disclosure on page 122 of your  Form 10-Q that your Global Liquidity
Reserve of $162 billion as of September 30, 2010  is made up of all unencumbered assets
that are not pledged as collate ral on either a mandatory or a voluntary basis and that they
do not include other unencumbered assets that are available to the Company for
additional monetization.   Please tell us if you are aware of a ny instances where certain of
the assets included as part of  your Global Liquidity Reserve disclosure may have in fact
been subject to a lien or other encumbrance a nd thus not appropriately  included as part of
the Global Liquidity Reserve.  As part of your response, please discuss the following, and
consider revising the appropriate  sections of your future Exch ange Act filings to address
the following:

a. Discuss the circumstances surrounding any s ituations where this may have occurred
and how they were identified;
b. Quantify the amount(s) and period(s) impacted;
c. Discuss the changes or steps taken to ensure  that any of these t ypes of situations do
not occur in the future; and
d. Discuss the Company’s conclusions regard ing how any circumstances, if any, where
amounts were improperly included in the Globa l Liquidity Reserve were not material
to the periodic reports affected.

Ruth Porat
Morgan Stanley  January 31, 2011 Page 3

You may contact Jennifer Moni ck, Senior Staff Accountan t, at 202-551-3295 or me at
202-551-3438 if you have questions.
Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

Letter to SEC

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.

 January 14, 2011

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-Q for Quarterly Period Ended September 30, 2010

Filed November 8, 2010

 File No. 001-11758

 Dear Mr. Telewicz:

Morgan Stanley (the “Company”) is pleased to respond to your letter of December 21, 2010 concerning its Form 10-Q for Quarterly Period
Ended September 30, 2010 (“Third Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

Form 10-Q for the quarterly period ended September 30, 2010

 Financial Statements

 Notes to Condensed Consolidated Financial Statements

 1

 11. Commitments, Guarantees and Contingencies

Other Guarantees and Indemnities

Representation and Warranties on Certain Securitized Assets, page 67

 Comment:

1.
Please tell us and disclose the total amount you have paid to date related to representations and warranties in connection with securitized assets. In addition, explain
to us how you determined that the probability of any future payments related to these representations and warranties is remote.

 Response:

 [*]

 As disclosed in its Third Quarter Form 10-Q, the Company has provided, or otherwise agreed to be responsible for, representations and warranties regarding certain assets transferred in securitization
transactions sponsored by the Company.1 The extent and
nature of the representations and warranties, if any, varied considerably among different securitizations. For example, the Company sponsored many subprime residential mortgage securitizations without providing or otherwise agreeing to be
responsible for, the representations and warranties made by third-party originators and/or sellers. In other securitizations, the Company agreed to provide, or otherwise be responsible for, the representations and warranties associated with some of
the securitized assets but not others. In still other securitizations, the Company agreed to make certain representations and warranties directly, or to be responsible for representations and warranties made by third parties, but these
representations and warranties could vary from transaction to transaction, and, in many instances, the Company may have recourse to a third party which could ultimately be responsible for repurchasing such assets.

As of the filing date of its Third Quarter Form 10-Q, November 8, 2010, the Company had not made any payments for breaches of representations and
warranties on securitized assets, and had not been sued for breaches of representations and warranties on securitized assets. In light of that historical experience, the Company concluded that the probability of such payments was remote.

During the Quarterly Period Ended December 31, 2010 (“Fourth Quarter”), there were a number of press reports and other public disclosures
regarding potential claims against various financial institutions for breaches of representations and warranties on securitized and unsecuritized U.S. residential mortgage loans. [*]2 [*]

1
In addition, the Company disclosed its contingent liability for representations and warranties related to certain assets sold as whole loans on page 66 of its Third
Quarter Form 10-Q under “Whole loan sale guarantees,” which sets forth the maximum potential payout and the liability carrying amount as of September 30, 2010.

2
[*]

 2

 As the Company disclosed in its Third Quarter Form 10-Q, the level of litigation activity related to
residential mortgage related issues has recently increased in the financial services industry. [*]3 [*]

 Contingencies, page 68

 Comment:

2.
We note your disclosure in the last paragraph of footnote 11. Please tell us how this disclosure complies with ASC 450-20-50. Further, to the extent the basis for this
disclosure is paragraph 4 of ASC 450-20-50, please tell us how you have complied with paragraph 4b of ASC 450-20-50, or tell us why you believe it was not necessary to make an explicit statement that an estimate of the possible loss cannot be made.

 Response:

 The last paragraph of footnote 11 is part of the Contingencies disclosure overall and needs to be read in conjunction with the other paragraphs of this section. The penultimate paragraph of this section
states that for certain legal proceedings, the Company cannot reasonably estimate such losses, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. The purpose of
the final paragraph of this section was to supplement, but not replace, the penultimate paragraph of this section by providing further information related to the recent level of legal activity concerning residential mortgage related claims in the
financial services industry generally.

 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

 Liquidity and Capital Resources

 The Balance Sheet, page 118

 Comment:

3.
We note the Tier 1 common ratio increased from 8.2% at December 31, 2009 to 10.7% at September 30, 2010 as you have disclosed on page 119. Additionally, we
note the Total Capital (to RWAs) and Tier 1 Capital (to RWAs) for Morgan Stanley Private Bank, N.A. decreased from 70.3% at December 31, 2009 to 26.9% at September 30, 2010 as you have disclosed on page 71. Please tell us the reasons for
the changes in these ratios from

3
[*]

 3

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:

 The increase in the Company’s Tier 1 ratio from 8.2% to 10.7% was predominantly driven by the issuance of approximately $5,579 million of common stock in connection with the
redemption of the junior subordinated debentures underlying the CIC Equity Units as described in “Redemption of CIC Equity Units and Issuance of Common Stock” on page 120 of the Third Quarter Form 10-Q.

In July 2010, the former Morgan Stanley Trust ( a Federal Savings Bank regulated by the Office of Thrift Supervision (the “OTS”)) converted to
Morgan Stanley Private Bank, National Association (the “Private Bank”) (a national bank regulated by the Office of the Comptroller of the Currency). Upon conversion the Private Bank became subject to the Market Risk Amendment to the
Risk-Based Capital rules under Basel I; the OTS had never adopted the Market Risk Amendment. Thus, the Private Bank’s trading portfolio risk-weighted assets calculation changed from the ratings-based approach to the market-risk
approach. The change in the risk-weighting of the portfolio resulted in the capital ratio change, which had no impact on the operations of the Company or the Private Bank.

 The Company will enhance its disclosure in future filings as necessary.

 Credit Ratings, page
125

 Comment:

4.
It appears that Fitch Ratings downgraded Morgan Stanley Bank, N.A. from A+ at June 30, 2010 to A at September 30, 2010. Please tell us the impact that this
downgrade has had or is expected to have on the company’s operations. Consider enhancing your disclosure in future filings to include this discussion.

 Response:

 Fitch’s downgrade of Morgan Stanley Bank, N.A.’s (“Bank
N.A.”) rating to “A” in September had no impact on the operations of the Bank N.A. or the Company as a whole. As the rating Outlook is Stable, the Company does not expect this downgrade to have any future impact on operations.
The Company will enhance its disclosure in future filings as necessary.

 In addition, Fitch noted that the Bank N.A.’s downgrade
equalized the Bank N.A.’s rating to the rating of its Parent (Morgan Stanley) to recognize Fitch’s view of interdependence of funding, risk, management and operations under the current bank holding company structure. Fitch has applied
this equalization of bank and parent rating for other peer institutions.

 4

*    *    *    *    *

In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:
Jennifer Monick, Securities and Exchange Commission

 Ruth Porat, Chief Financial Officer

 Gregory G. Weaver, Deloitte & Touche LLP

 James V. Schnurr, Deloitte & Touche LLP

 5

December 21, 2010
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-Q for Quarterly Period Ended
  September 30, 2010   Filed November 8, 2010
File No. 001-11758

Dear Ms. Porat:
 We have reviewed your filing 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 advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

Ruth Porat
Morgan Stanley  December 21, 2010 Page 2

Form 10-Q for the quarterly period ended September 30, 2010

 Financial Statements

 Notes to Condensed Consolidated Financial Statements

 11. Commitments, Guarantees and Contingencies

 Other Guarantees and Indemnities

 Representation and Warranties on Cert ain Securitized Assets, page 67

 1. Please tell us and disclose the total am ount you have paid to date related to
representations and warranties in connection w ith securitized assets.  In addition, explain
to us how you determined that the probability of any future payments related to these
representations and warranties is remote.
 Contingencies, page 68

 2. We note your disclosure in the last paragra ph of footnote 11.  Please tell us how this
disclosure complies with ASC 450-20-50.  Furt her, to the extent the basis for this
disclosure is paragraph 4 of ASC 450-20-50, please tell us how you have complied with
paragraph 4b of ASC 450-20-50, or tell us why you believe it  was not necessary to make
an explicit statement that an estimate  of the possible loss cannot be made.
 Item 2. Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 Liquidity and Capital Resources

 The Balance Sheet, page 118

 3. We note the Tier 1 common ratio increased  from 8.2% at December 31, 2009 to 10.7% at
September 30, 2010 as you have disclosed on page 119.  Additionally, we note the Total Capital (to RWAs) and Tier 1 Capital (to RW As) for Morgan Stanley Private Bank, N.A.
decreased from 70.3% at December 31, 2009 to 26.9% at September 30, 2010 as you
have disclosed on page 71.   Please tell us th e reasons for the changes in these ratios from
period to period and the impact that these cha nges have had or are expected to have on
the company’s operations.  Consider enhanci ng your disclosure in future filings to
include this discussion.

Ruth Porat
Morgan Stanley  December 21, 2010 Page 3

Credit Ratings, page 125

 4. It appears that Fitch Ratings downgraded Mo rgan Stanley Bank, N.A. from A+ at June
30, 2010 to A at September 30, 2010.  Please tell us the impact that this downgrade has
had or is expected to have on the comp any’s operations.  Consider enhancing your
disclosure in future filings to include this discussion.   We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
• the company is responsible for the adequacy an d accuracy of the disclo sure 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

• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Jennifer Moni ck, Senior Staff Accountan t, at 202-551-3295 or me at
202-551-3438 if you have questions.

Sincerely,

Robert Telewicz   Senior Staff Accountant

September 30, 2010
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036
Re: Morgan Stanley
Form 10-K for Fiscal 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 Ms. Porat:
 We have completed our review of your fili ngs and do not have any further comments at
this time.
Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

Correspondence

 September 15, 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 June 30, 2010 Filed August 6, 2010

File No. 001-11758

 Dear Mr. Telewicz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of September 2, 2010 concerning its Annual Report on Form
10-K for the year ended December 31, 2009, its Definitive Proxy Statement for the year ended December 31, 2009, its Form 8-K filed April 21, 2010, and its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010
(“Second Quarter Form 10-Q”).

 For your convenience, we have restated your comments below.

Form 10-K

 Item 8. Financial
Statements and Supplementary Data

 Notes to Consolidated Financial Statements

4. Fair Value Disclosures, page 135

 1

 Comment:

1.
We note your response to our prior comment three. Please tell us how you have complied with Article 9 of Regulation S-X, or tell us how you determined it was
appropriate to include your provision for loan losses within Other Revenue.

 Response:

The Company is not a traditional commercial bank and, as such, its business activity related to the accrual loan portfolio is not significant to the
Company’s overall business operations. Moreover, the investor community is mainly focused on the Company’s revenues related to its sales and trading, investment banking and asset management businesses. Accordingly, the Company does not
believe the provision for loan losses of $258 million (approximately 1% of Total revenues) was material to require separate disclosure on the Company’s consolidated statement of income for the calendar year ended December 31, 2009. The
Company included the provision for loan losses in Other revenue so Total revenues would remain the same if, and when, the provision for loan losses becomes material to require a separate line item.

In future filings, the Company will separately disclose the provision for loan losses in compliance with Article 9 of Regulation S-X, if material.

 Form 10-Q for the quarterly period ended June 30, 2010

Financial Statements

 Notes to
Condensed Consolidated Financial Statements

 11. Commitments, Guarantees and Contingencies

Contingencies, page 67

 Comment:

2.
 We note your response to our prior comment four and your enhanced litigation-related disclosures on page 67 of your June 30, 2010 Form 10-Q. We
note your disclosure that you do not believe losses will have a material adverse effect on certain financial statements. Please confirm for us and disclose in future filings, if true, that these losses will not have a material effect on the
financial statements as a whole, rather than certain individual financial statements. Additionally, it appears your threshold for disclosure is whether you can “predict with certainty” what the eventual outcome of the pending matters will
be. We do not believe that this criteria is consistent with the guidance in ASC 450. Please either provide a range of loss, which may be aggregated for all of the

 2

litigation matters for which you are able to estimate the amount of the loss or range of possible loss, or provide explicit disclosure that you are unable to estimate the loss or range of
possible loss and the reasons why you are unable to provide an estimate. Furthermore, if you cannot estimate the possible loss or range of possible losses, please consider providing additional disclosure that could allow a reader to evaluate the
potential magnitude of the claim.

 Response:

Regarding the enhanced litigation-related disclosures on page 67 of the Company’s Second Quarter Form 10-Q, this will confirm that, with respect to
those proceedings where the Company can estimate possible losses, additional losses, range of loss or ranges of additional losses in excess of the amounts accrued, the Company does not believe, based on current knowledge and after consultation with
counsel, such losses would have a material adverse effect on the consolidated financial statements as a whole, other than the possible loss described in the fourth paragraph on page 67, and will disclose as such in future filings, if true.

 Regarding the threshold for disclosure of pending matters, the Company’s threshold is based on whether a “reasonable estimate”
of possible loss or range of loss can be made, which is consistent with the guidance in ASC 450. The litigation-related disclosure on page 68 notes that this is the Company’s threshold by stating that, “For certain other legal proceedings
the Company cannot reasonably estimate such losses,” [emphasis added] and then further explains that it cannot predict with certainty if, how or when such proceedings will be resolved. The disclosure that the Company cannot predict with
certainty if, how or when such proceedings will be resolved, is not intended to imply that the disclosure threshold is based on a prediction of certainty but merely illustrates why in certain cases the Company cannot reasonably estimate possible
losses or range of loss. The Company provided further examples of why in certain cases it cannot reasonably estimate possible losses or range of loss by noting that “Numerous issues must be developed, including the need to discover and
determine important factual matters and the need to address novel or unsettled legal questions relevant to the proceedings in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any
proceeding” [emphasis added]. When the Company can estimate possible losses or range of loss, the Company discloses either they are immaterial or provides disclosure regarding those losses as it did regarding the Capmark matter at June 30,
2010.

 In future filings, the Company will not make reference in the disclosure to the fact that “the Company cannot predict with
certainty if, how or when such proceedings will be resolved” and will continue to consider providing additional disclosure that could allow a reader to evaluate the potential magnitude of a claim or claims when an estimate of the possible loss
or range of possible losses cannot be made.

 3

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:

Jennifer Monick, Securities and Exchange Commission

Ruth Porat, Chief Financial Officer

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 4

September 2, 2010
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal 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 Ms. Porat:
 We have reviewed your response letter dated July 30, 2010 and have the following
additional 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 advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

Ruth Porat Morgan Stanley September 2, 2010 Page 2

Form 10-K

 Item 8 Financial Statements and Supplementary Data

 Notes to Consolidated Financial Statements

4. Fair Value Disclosures, page 135

1. We note your response to our prior comment  three.  Please tell us how you have
complied with Article 9 of Regulation S-X,  or tell us how you determined it was
appropriate to include yo ur provision for loan losses within Other Revenue.

Form 10-Q for the quarterly period ended June 30, 2010
 Financial Statements

 Notes to Condensed Consolidated Financial Statements

 11. Commitments, Guarantees and Contingencies

 Contingencies, page 67

2. We note your response to our prior comment four and your enhanced litigation-related
disclosures on page 67 of your June 30, 2010 Fo rm 10-Q.  We note your  disclosure that
you do not believe losses will have a materi al adverse effect on certain financial
statements.  Please confirm for us and disclose in future filings, if true, that these losses will not have a material effect on the financial statements as a whole, rather than certain
individual financial statements.  Additionall y, it appears your threshol d for disclosure is
whether you can “predict with certainty” what the eventual outcome of the pending
matters will be.  We do not believe that this criteria is consistent with the guidance in
ASC 450.  Please either provide a range of loss, which may be aggregated for all of the
litigation matters for which you are able to es timate the amount of the loss or range of
possible loss, or provide exp licit disclosure that you are unable to estimate the loss or
range of possible loss and th e reasons why you are unable to  provide an estimate.
Furthermore, if you cannot estimate the possibl e loss or range of possible losses, please
consider providing additional disclosure th at could allow a reader to evaluate the
potential magnitude of the claim.

Ruth Porat Morgan Stanley September 2, 2010 Page 3

You may contact Jennifer Monic k, Senior Staff Accountant, at (202) 551-3295, or me at
(202) 551-3438 if you have questions.
Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

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

CORRESP
1
filename1.htm

SEC Correspondence Letter

 July 8, 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 Fiscal 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 Ended Period March 31, 2010 Filed May 7, 2010

File No. 001-11758

 Dear Mr. Telewicz:

 Morgan Stanley (the “Company”) received your letter dated July 1 2010, concerning the Company’s Annual Report on Form
10-K for the year ended December 31, 2009, Definitive Proxy Statement for the year ended December 31, 2009, Form 8-K filed April 21, 2010, and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010.

 We respectfully request an extension of time to respond to your letter and intend to provide our response on or before July 30, 2010.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional information.

Sincerely,

 /s/    Paul C.
Wirth

 Paul C. Wirth

 Finance Director and Controller

cc:

Jennifer Monick, Securities and Exchange Commission

Ruth Porat, Chief Financial Officer

July 1, 2010
 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal 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 Ms. Porat:
 We have reviewed your response letter  dated May 28, 2010 and have the following
additional 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 advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

Ruth Porat Morgan Stanley July 1, 2010 Page 2

Form 10-K

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

 Liquidity Management Policies

 Liquidity Reserves, page 78

1. We note your response to our prior comment five .  Please confirm for us that, in addition
to including total assets by investment, you w ill 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.
 Item 8 Financial Statements and Supplementary Data

 Notes to Consolidated Financial Statements

4. Fair Value Disclosures, page 135

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 fund, real estate funds, hedge funds , etc.) and whether the company expects to provide any
financial support to these funds on a voluntary basis.

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 negativ e valuation adjustment or allowance from
the subsequent credit review process did not re late to factors that existed when the loans
were originated.

Ruth Porat Morgan Stanley July 1, 2010 Page 3

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

 General

 4. We note your disclosure beginning on page 27 of the Form 10-K for the year ended
December 31, 2009 regarding the various litig ation matters to which the Company is
exposed. We also note that you have not disc losed 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 th e possible loss or range  of possible loss or
state that such an estimate cannot be made.  Additionally, we note th at 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 revi se your disclosures beginning in  the second quarter Form 10-
Q to include all of the disclosures require d 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 accrue d by the Company or disclosure indicating
that the outcome of a matter may be material  to your operating resu lts for a particular
period satisfies the criteria in ASC 450.
 5. We note from news reports that you ha ve 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 co mplied 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 po ssible 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 peri odic filings in accordan ce with paragraphs 3
and 4 of ASC 450-20-50.
6. In your Form 10-Q for the quarter ended March 31, 2010, we note that you have not
provided any discussion concer ning investigations by author ities, which were recently
reported by several news outlets, related your  involvement with collateralized debt
obligations.  Please tell us why you did not in clude any discussion of these investigations
in your first quarter 10-Q.  Also, tell us wh ether you intend to include  disclosure in your
next quarterly report and if not, te ll us your basis for excluding it.

Ruth Porat Morgan Stanley July 1, 2010 Page 4

You may contact Jennifer Monic k, Senior Staff Accountant, at (202) 551-3295, or me at
(202) 551-3438 if you have questions.
Sincerely,

Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

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

CORRESP
1
filename1.htm

Correspondence

 May 20, 2010

By U.S. Mail & Facsimile to 703 813 6984

Ms. Linda van Doorn

 Senior Assistant
Chief Accountant

 Division of Corporation Finance

Securities and Exchange Commission

 100 F
Street, N.E.

 Mail Stop 4561

Washington, DC 20549

Re:
Form 10-Q for Quarter Ended March 31, 2010 filed May 7, 2010

Dear Ms. van Doorn:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of May 11, 2010, concerning its Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

For your convenience, we have restated your comment below.

Comment:

1.
We note your response to our prior comment one and your disclosure in the Form 10-Q for the quarter ended March 31, 2010. We note you describe your accounting
policy for repurchase and securities lending transactions as generally being treated as collateralized financings. In future filings, please make an unqualified statement as to how you have accounted for these transactions. To the extent you
have any deviations from your accounting policy, please explain and quantify these deviations in your disclosure.

 Response:

 In future filings, the Company will make an unqualified statement as to how it accounted for repurchase and securities
lending transactions. To the extent the Company has any deviations from its accounting policy, it will explain and quantify these deviations in its disclosures.

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:
Ruth Porat, Chief Financial Officer

Jennifer Monick, Securities and Exchange Commission

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 2

Mail Stop 3010
      May 11, 2010

VIA U.S. MAIL AND FAX (212) 507-3961

 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036
Dear Ms. Porat:
 We have reviewed your response letter dated May 6, 2010 and have the following
additional comment.  If you disagree with our comment, we will consider your
explanation as to why our comment is not applic able.  Please be as detailed as necessary
in your explanation.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comment or on any other aspect of our
review.  Feel free to call me at the telephone  number listed at the end of this letter.
 1. We note your response to our prior comment  one and your disclosure in the Form
10-Q for the quarter ended March 31, 2010.  We note you describe your
accounting policy for repurchase and s ecurities lending transactions as
generally  being treated as collater alized financings.  In fu ture filings, please make
an unqualified statement as to how you have accounted for these transactions.  To the extent you have any deviations from your accounting policy, please explain
and quantify these deviations in your disclosure.

Please respond to this comment within 10 business days or tell us when you will
provide us with a response.  Please s ubmit your response letter on EDGAR.  Please
contact me at (202) 551-3498 if you have any questions.
      S i n c e r e l y ,
Linda van Doorn Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

SEC Correspondence Letter

 May 6, 2010

By U.S. Mail & Facsimile to 703 813 6984

Ms. Linda van Doorn

 Senior Assistant Chief
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

Dear Ms. van Doorn:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of April 26, 2010, concerning its Annual Report on Form 10-K for the year ended December 31, 2009.

For your convenience, we have restated your comments below.

Comment:

1.
Beginning with the Form 10-Q for the quarter ended March 31, 2010, please revise your Summary of Significant Accounting Policies footnote to include your accounting
policy for repurchase agreements, which we understand from your response are all accounted for as collateralized financings.

Response:

 The Company will expand its
Summary of Significant Accounting Policies footnote to include its accounting policy for repurchase agreements in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010.

*        *        *
  *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

/s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:
Ruth Porat, Chief Financial Officer

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 2

Mail Stop 3010
      May 4, 2010

VIA U.S. MAIL AND FAX (212) 507-3961

 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal 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 Ms. Porat:
We have reviewed your filing and have the following comments.  In our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.  After reviewing this inform ation, we may raise additional comments.
  Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Ruth Porat
Morgan Stanley May 4, 2010 Page 2   Form 10-K

 Item 7 Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 General

1. We understand that you have entered into repurchase transactions accounted for
as collateralized financings.  To the exte nt there are significant variations between
the average level of these transacti ons 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 a bove would be useful  to investors and
should be included.

Business Segments
 Global Wealth Management Group

 2009 Compared with Fiscal 2008

 Asset Management, Distribution a nd Administration Fees, page 56

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 te ll 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 prio r period amounts to
conform to your new presentation.

Other Matters
 Real Estate, page 66

3. Please tell us whether the company’s inve stments in consolidated real estate
subsidiaries are presente d net of non-controlling in terests in the company’s
consolidated financial statements.  To th e extent these investments are accounted
for on a gross basis, explain to us whethe r 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.

Ruth Porat
Morgan Stanley May 4, 2010 Page 3   Liquidity and Capital Resources

 The Balance Sheet, page 74

4. We note your disclosure of Tier 1 levera ge ratios and Levera ge ratio.  Please
provide us with a discussion of the us es of these ratios beyond assessing
compliance with federal banking regula tors minimum guidelines.  In your
discussion, tell us the reasons for any si gnificant 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.

Liquidity Management Policies
 Liquidity Reserves, page 78

5. We note your disclosure of your liquidity re serves.  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 manda tory or voluntary basis;
• the ease with which the registrant could liquidate these assets; and
• any expected surplus or deficiency gene rated in your liquidity reserves after
meeting all funding and regulatory requi rements in a stressed environment.
 Item 8 Financial Statements and Supplementary Data

 Notes to Consolidated Financial Statements

 1. Introduction and Basis of Presentation

 Discontinued Operations, page 120

6. It appears that you have cl assified 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 purchas e this business.  Explain to us how you
considered the guidance in paragraph 1 of ASC 205-20-45 in  determining the
appropriate classification of th e results of th is business.

Ruth Porat
Morgan Stanley May 4, 2010 Page 4   2. Summary of Significant Accounting Policies

Revenue Recognition
 Asset Management, Distribution a nd Administration Fees, page 122

7. To the extent your performance-based fees  are related to cont racts that do not
coincide with your fiscal year end, pl ease tell us how you have complied with
ASC 605-20-S99-1, or tell us why you believe  it was not necessary to disclose the
amount of revenue recognized that may be reversed in future periods if the fund
performance falls below the performance benchmark.
3. Morgan Stanley Smith Barney Holdings LLC

Smith Barney, page 131
8. Please tell us your basis in U.S. GAAP for recording a receivable of
approximately $1.1 billion related to the fa ir value of the Smith Barney delayed
contribution businesses, as well as presen ting the receivable as a reduction from
non-controlling interests.  Cite any releva nt accounting literature in your response.
9. Please tell us how you accounted for the ca ll and put rights related to Citi’s
interest in MSSB.  Please reference the authoritative accounting literature
management relied upon.
10. Please tell us how you determined  it was appropriate to use the fair value  of your
consideration transferred in your calculation of goodw ill, as it appears that you
retain control of the assets and liabilitie s transferred.  Please refer to paragraph 8
of ASC 805-30-30.
11. We note you have recorded a gain on the Morgan Stanley Smith Barney
transaction in your Consolidated Statements  of Changes in Total Equity.  Please
tell us the nature of this gain, and refe rence the authoritativ e accounting literature
management relied upon.

4. Fair Value Disclosures, page 135
12. Please provide us with further detail of  the investment line item by asset type
(private equity fund, real es tate funds, hedge funds, etc. ).  Additionally, tell us
whether the company has provided any gua rantees to these funds, has provided
voluntary financial assistance to these funds  or expects to provide any additional
financial support to these f unds on a voluntary basis.

Ruth Porat
Morgan Stanley May 4, 2010 Page 5   13. Tell us whether the company acts solely as fund manager for any off balance
sheet private equity or real estate funds.   To the extent the company has engaged
in this business, tell us the current financ ial status of these funds and whether the
company expects to provide any financia l support to these funds on a voluntary
basis.
14. We note that the company recorded approxi mately $4.3 billion in losses to level 3
net derivative and other cont racts and $1.4 billion in losses to level 3 investments.
Please describe for us in detail the cha nges in circumstances and assumptions that
led to recording these losses in the cu rrent period, any signi ficant changes in
assumptions or valuation methodology from the previous period, and the
performance of these assets subsequent to year end.
15. With respect to those commercial and residential loans the company has
originated, explain to us how your credit review pro cess factored into your
original decision to extend, and the subsequent valuation of the loans.  In your
response, provide us with sufficient detail  of the credit review process, and the
degree to which the credit quality of the bo rrowers of these loans is used as an
assumption in determining fair value.  Fi nally, clarify for us where these loans are
classified within the fair value hierarc hy, or if they are classified elsewhere on
your Consolidated Statements  of Financia l Condition.
15. Interest and Dividends and Interest Expense, page 198

16. We note your net ‘other’ intere st expense item has a nega tive balance as of year
end.  Please tell us the composition of th is item, and your basis in U.S. GAAP for
classifying any revenue net with in this expense line item.
Definitive Proxy Statement filed April 12, 2010
Consideration of Risk Matters in  Determining Compensation, page 17
17. We are aware of the Federal Reserve’ s “horizontal review” of compensation
practices at large, complex banking organi zations.  Taking into consideration any
discussions you have had with other regul ators, please confirm that you continue
to believe that risks arising from you r compensation policies and practices for
employees are not reasonably likely to have a material adverse effect on you.

Ruth Porat
Morgan Stanley May 4, 2010 Page 6   Form 8-K Filed April 21, 2010

General
18. Please tell us how you accounted for your i nvestment in Revel prior to the first
quarter 2010.  In your response, te ll us whether you accounted for your
investment as an equity method investme nt in a real estate partnership or a
consolidated real esta te asset.  In addition, explain to us whether this investment
was carried at fair value or historical cost basis prior to the company’s decision to
sell.  To the extent the investment was car ried at cost basis, explain to us the
company’s policy for periodical ly testing the investment for impairment.  To the
extent the investment was carried at fair value, tell us the significant assumptions
used in determining the fair value as of December 31, 2009, and how these
assumptions changed during the first quarter 2010.
19. We understand from news reports that the company held a 94.5% equity
investment in Revel that it was attempting to reduce by selling equity interests to
others.  Please clarify whether this wa s the case.  If so, tell us when the
investment was made and when the co mpany began attempting to reduce its
ownership interest.  In addition, tell us the level of success the company had with
those efforts and when the company first realized difficulties in selling the interests.  Your response should also di scuss the timing of the downturn in the
Atlantic City market and how that downturn  affected the company’s efforts to sell
the interests in Revel to others.  Finally, tell us why these adverse market developments did not lead to impair ment recognition prior to March 31, 2010.
20. In light of the impairment charge reco rded for Revel during the quarterly period
ended March 31, 2010, please tell us what c onsideration you gave to disclosing a
potential impairment within the Mana gement’s Discussion and Analysis of
Financial Condition and Results of Opera tions of your Form 10-K for the year
ended December 31, 2009.

*    *    *    *

Ruth Porat
Morgan Stanley May 4, 2010 Page 7
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please s ubmit your response letter on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

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

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
You may contact Jennifer M onick, Senior Staff Account ant, at (202) 551-3295, or
the undersigned at (202) 551-3438 if you have questions.

         S i n c e r e l y ,
Robert Telewicz   Senior Staff Accountant

Mail Stop 3010
      April 26, 2010

VIA U.S. MAIL AND FAX (212) 507-3961

 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036
Dear Ms. Porat:
 We have reviewed your response letter dated April 13, 2010 and have the
following additional comment.  If you disagree with our comment, we will consider your explanation as to why our comment is not applic able.  Please be as detailed as necessary
in your explanation.
 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comment or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.
 1. Beginning with the Form 10-Q for th e quarter ended March 31, 2010, please
revise your Summary of Si gnificant Accounting Policies footnote to include your
accounting policy for repurchase agreem ents, which we understand from your
response are all accounted for as collateralized financings.
 Please respond to this comment within 10 business days or tell us when you will
provide us with a response.  Please s ubmit your response letter on EDGAR.  Please
contact me at (202) 551-3498 if you have any questions.
      S i n c e r e l y ,
Linda van Doorn Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

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.

 April 13, 2010

By U.S. Mail & Facsimile to 703 813 6984

Ms. Linda van Doorn

 Senior Assistant
Chief 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

Dear Ms. van Doorn:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter dated March 29, 2010, concerning its Annual Report on Form 10-K for the year ended December 31, 2009.

For your convenience, we have restated your comments below.

1.
With regard to your repurchase agreements, please tell us whether you account for any of those agreements as sales for accounting purposes in your financial statements.
If you do, we ask that you:

a.
Quantify the amount of repurchase agreements qualifying for sales accounting at each quarterly balance sheet date for each of the past three years.

b.
Quantify the average quarterly balance of repurchase agreements qualifying for sales accounting for each of the past three years.

 Confidential Treatment Requested by Morgan Stanley

c.
Describe all the differences in transaction terms that result in certain of your repurchase agreements qualifying as sales versus collateralized financings.

d.
Provide a detailed analysis supporting your use of sales accounting for your repurchase agreements.

e.
Describe the business reasons for structuring the repurchase agreements as sales transactions versus collateralized financings. To the extent the amounts accounted for
as sales transactions have varied over the past three years, discuss the reasons for quarterly changes in the amounts qualifying for sales accounting.

f.
Describe how your use of sales accounting for certain of your repurchase agreements impacts any ratios or metrics you use publicly, provide to analysts and credit
rating agencies, disclose in your filings with the SEC, or provide to other regulatory agencies.

g.
Tell us whether the repurchase agreements qualifying for sales accounting are concentrated with certain counterparties and/or concentrated within certain countries. If
you have any such concentrations, please discuss the reasons for them.

 Response:

The Company does not generally engage in repurchase agreements that are treated as sales for accounting purposes in its financial
statements. There are no such transactions for the periods requested.

2.
Tell us whether you have changed your original accounting on any repurchase agreements during the last three years. If you have, explain specifically how you determined
the original accounting either as a sales transaction or as a collateralized financing transaction noting the specific facts and circumstances leading to this determination. Describe the factors, events or changes which resulted in your changing
your accounting and describe how the change impacted your financial statements.

 Response:

The Company has not changed the original accounting on any repurchase agreements during the last three years.

3.
For those repurchase agreements you account for as collateralized financings, please quantify the average quarterly balance for each of the past three years. In
addition, quantify the period end balance for each of those quarters and the maximum balance at any month-end. Explain the causes and business reasons for significant variances among these amounts.

 2

 Confidential Treatment Requested by Morgan Stanley

 Response:

The following table presents the information requested above for repurchase agreements. Given the similarity, the same information has
also been provided for securities lending in the second table below.

 Quarter Ended (1):

Securities Purchased
Under Agreements
to Resell

Securities Sold Under
Agreements to
Repurchase

(in millions)

 December 2009

 Period end

[*]

$
159,401

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2009

 Period end

[*]

147,344

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 June 2009

 Period end

[*]

91,935

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 March 2009

 Period end

[*]

69,641

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 December 2008

 Period end

[*]

92,213

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 June 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 March 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 December 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 June 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 3

 Confidential Treatment Requested by Morgan Stanley

 Maximum month end

[*]

[*]

 March 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

(1)
Average balances were calculated using weekly balances in 2009 and month-end balances in 2008 and 2007.

(2)
Amounts presented are on a calendar basis due to the Company’s change in fiscal year end from November 30 to December 31 beginning January 1, 2009.

 Quarter Ended (1):

Securities Borrowed

Securities Loaned

(in millions)

 December 2009

 Period end

$
167,501

$
26,246

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2009

 Period end

128,922

26,182

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 June 2009

 Period end

107,853

18,002

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 March 2009

 Period end

92,589

19,106

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 December 2008

 Period end

88,052

14,580

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 June 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 March 2008(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 December 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 September 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 4

 Confidential Treatment Requested by Morgan Stanley

 June 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

 March 2007(2)

 Period end

[*]

[*]

 Quarterly average

[*]

[*]

 Maximum month end

[*]

[*]

(1)
Average balances were calculated using weekly balances in 2009 and month-end balances in 2008 and 2007.

(2)
Amounts presented are on a calendar basis due to the Company’s change in fiscal year end from November 30 to December 31 beginning January 1, 2009.

 As noted in the above tables, repurchase agreements and securities lending transactions trended down over the
three-year period, including a sharp decline in the fourth quarter of 2008. The overall decline reflects the de-leveraging that occurred throughout the industry resulting from market forces, including the severe disruption of the collateralized
lending market after the Lehman failure. In the fourth quarter of 2008 in particular, the Company increased its focus on rescaling the size of its balance sheet intensive businesses including prime brokerage and select proprietary trading
strategies. As a result, securities loaned in particular remain at low levels as the Company’s holdings of equities are well below 2007 levels as are securities available for lending from prime brokerage customers.

Comparing quarterly average balances with quarter-end balances, the variances are within expectations given the absolute size of these
balances and the fluctuating volumes that are typical of this market. In previous SEC filings, within the Liquidity section of Management’s Discussion and Analysis, the Company has noted that quarter-end asset balances may be lower than
intra-quarter balances due to the nature of the Company’s market making and client-financing activity as well as the Company’s efforts to manage its asset balances and liquidity. However, as shown in the tables above, there are also a
number of periods where the quarter-end balances are higher than intra-quarter.

4.
In addition, please tell us:

a.
Whether you have any securities lending transactions that you account for as sales pursuant to the guidance in ASC 860-10. If you do, quantify the amount of these
transactions at each quarterly balance sheet date for each of the past three years. Provide a detailed analysis supporting your decision to account for these securities lending transactions as sales.

Response:

The Company does not have any securities lending transactions accounted for as sales.

 5

 Confidential Treatment Requested by Morgan Stanley

b.
Whether you have any other transactions involving the transfer of financial assets with an obligation to repurchase the transferred assets, similar to repurchase or
securities lending transactions that you account for as sales pursuant to the guidance in ASC 860. If you do, describe the key terms and nature of these transactions and quantify the amount of the transactions at each quarterly balance sheet date
for the past three years.

 Response:

The Company does not have any other transactions involving the transfer of financial assets with an obligation to repurchase the
transferred assets, similar to repurchase or securities lending transactions, that are accounted for as sales.

c.
Whether you have offset financial assets and financial liabilities in the balance sheet where a right of setoff — the general principle for offsetting — does
not exist. If you have offset financial assets and financial liabilities in the balance sheet where a right of setoff does not exist, please identify those circumstances, explain the basis for your presentation policy, and quantify the gross amount
of the financial assets and financial liabilities that are offset in the balance sheet. For example, please tell us whether you have offset securities owned (long positions) with securities sold, but not yet purchased (short positions), along with
any basis for your presentation policy and the related gross amounts that are offset.

 Response:

 The Company presents receivables and payables arising from unsettled regular-way purchases and sales of securities on a
net basis in accordance with ASC 940-20-45-3. That paragraph is part of a section on presentation matters and states that “payables and receivables arising from unsettled regular-way transactions may be recorded net.” The Company’s
practice is also consistent with the financial institutions industry.

 The table below shows the impact to the balance sheet of
presenting payables and receivables arising from unsettled regular-way purchases and sales of securities as one net number at each quarter end for the past three years. Although the Company has made every effort to ensure the accuracy of the amounts
below, the netting impact is not readily available or easily created or reconciled since the transactions are booked net in the Company’s systems. The amounts were calculated by aggregating separately, for trades giving rise to such receivables
and payables, all open purchases and all open sales at each date and assuming the smaller amount would have been netted against the larger.

 6

 Confidential Treatment Requested by Morgan Stanley

 Quarter Ended

Amount

(in billions)

 December 2009

[*]

 September 2009

[*]

 June 2009

[*]

 March 2009

[*]

 December 2008

[*]

 September 2008

[*]

 June 2008

[*]

 March 2008

[*]

 December 2007

[*]

 September 2007

[*]

 June 2007

[*]

 March 2007

[*]

 In your request,
specific reference is made to cases where securities owned are netted with securities sold, but not yet purchased. The Company applies what is commonly known as “CUSIP netting” as part of the Company’s normal consolidation and
reporting procedures, but the Company does not consider this as the netting of separate financial assets and liabilities that would fall under the netting rules in ASC 210-20. Rather, this procedure is applied to ensure that the Company properly
reflects its security positions and the Company does not reflect a liability to repurchase the security in the market when in fact the Company has no such obligation.

Short sale liabilities are booked initially at the trader level without regard for whether the security may be held by another trading
desk or entity within the consolidated group. The CUSIP netting process is then used for reporting purposes so that the position for that security is correctly reflected when considering the consolidated group as a whole. Securities with the same
CUSIP number are considered to be fungible. As such, it would not be appropriate to present a long and short position for the same security, and there would be no obligation to repurchase the security in the market in this case. The Company’s
practice is consistent with the financial institutions industry.

 The table below shows the netting impact of CUSIP netting at
each quarter end for the previous three years:

 Quarter Ended

Amount

(in billions)

 December 2009

[*]

 September 2009

[*]

 June 2009

[*]

 March 2009

[*]

 December 2008

[*]

 September 2008

[*]

 June 2008

[*]

 March 2008

[*]

 December 2007

[*]

 7

 Confidential Treatment Requested by Morgan Stanley

 September 2007

[*]

 June 2007

[*]

 March 2007

[*]

5.
Finally, if you accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of financial assets with an
obligation to repurchase the transferred assets as sales and did not provide disclosure of those transactions in your Management’s Discussion and Analysis, please advise us of the basis for your conclusion that disclosure was not necessary and
describe the process you undertook to reach that conclusion. We refer you to paragraphs (a)(1) and (a)(4) of Item 303 of Regulation S-K.

Response:

The Company has not accounted for repurchase agreements, securities lending transactions, or other transactions involving the transfer of
financial assets with an obligation to repurchase the transferred assets as sales.

 8

 Confidential Treatment Requested by Morgan Stanley

*    *    *    *    *

In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

/s/ Paul C. Wirth

 Paul C. Wirth

 Finance
Director and Controller

cc:
Ruth Porat, Chief Financial Officer

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 9

Mail Stop 3010
      March 29, 2010

VIA U.S. MAIL AND FAX (212) 507-3961

 Ruth Porat Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036
Dear Ms. Porat:
We are currently reviewing your Form 10-K for fiscal year ended December 31,
2009.  In our effort to better understand th e decisions you made in determining the
accounting for certain of your repurchase agreem ents, securities lend ing transactions, or
other transactions involving th e transfer of financial asse ts with an obligation to
repurchase the transferred assets , we ask that you provide us with information relating to
those decisions and your disclosure.        With regard to your repurchase agreemen ts, please tell us whether you account for
any of those agreements as sales for accounti ng purposes in your financial statements. If
you do, we ask that you:

‚ Quantify the amount of repurchase agreements qualifying for sales accounting at each
quarterly balance sheet date for each of the past three years.
‚ Quantify the average quarterly balance of repurchase agreements qualifying for sales
accounting for each of the past three years.

‚ Describe all
 the differences in transaction te rms that result in certain of your
repurchase agreements qualifying as sales versus collateralized financings.
 ‚ Provide a detailed analysis supporting your use of sales accounting for your
repurchase agreements.
 ‚ Describe the business reasons for structur ing the repurchase agreements as sales
transactions versus collateralized financi ngs.  To the extent the amounts accounted for
as sales transactions have varied over the past three ye ars, discuss the reasons for
quarterly changes in the amount s qualifying for sales accounting.

Ruth Porat
Morgan Stanley March 29, 2010 Page 2   ‚ Describe how your use of sales accounting fo r certain of your repurchase agreements
impacts any ratios or metrics you use public ly, provide to analysts and credit rating
agencies, disclose in your filings with the SEC, or provide to other regulatory
agencies.
 ‚ Tell us whether the repurchase agreem ents qualifying for sales accounting are
concentrated with certain counterparties and/ or concentrated within  certain countries.
If you have any such concentrations, please discuss the reasons for them.
 ‚ Tell us whether you have changed your  original accounting on any repurchase
agreements during the last three years.  If you have, explain specifically how you
determined the original accounting as either a sales transaction or as a collateralized financing transaction noting the specific f acts and circumstances leading to this
determination.  Describe the factors, ev ents or changes which resulted in your
changing your accounting and describe how  the change impacted your financial
statements.

For those repurchase agreements you account  for as collateralized financings,
please quantify the average quarterly balance fo r each of the past three years.  In addition,
quantify the period end balance for each of those quarters and the maximum balance at
any month-end.  Explain the causes and busin ess reasons for significant variances among
these amounts.

In addition, please tell us:
‚ Whether you have any securities lending tr ansactions that you account for as sales
pursuant to the guidance in ASC 860-10.  If you do, quantify the amount of these
transactions at each quarterl y balance sheet date for each of the past three years.
Provide a detailed analysis supporting your decision to account for these securities
lending transactions as sales.
‚ Whether you have any other transactions i nvolving the transfer of financial assets
with an obligation to repurchase the tran sferred assets, simila r to repurchase or
securities lending transactions  that you account for as sale s pursuant to the guidance
in ASC 860.  If you do, describe the key term s and nature of these transactions and
quantify the amount of the tran sactions at each quarterly balance sheet date for the
past three years.
‚ Whether you have offset financial assets a nd financial liabilities in the balance sheet
where a right of setoff – the general princi ple for offsetting – does not exist.  If you
have offset financial assets and financial lia bilities in the balance sheet where a right
of setoff does not exist, please identify t hose circumstances, explain the basis for your
presentation policy, and quantify the gro ss amount of the financial assets and
financial liabilities that are offset in the balance sheet.  For example, please tell us

Ruth Porat
Morgan Stanley March 29, 2010 Page 3
whether you have offset securities owned (long positions) with securities sold, but not
yet purchased (short positions),  along with any basis for your presentation policy and
the related gross amounts that are offset.

Finally, if you accounted for repurchas e agreements, securities lending
transactions, or other transact ions involving the transfer of  financial assets with an
obligation to repurchase the tran sferred assets as sales and di d not provide disclosure of
those transactions in your Management’s Di scussion and Analysis, pl ease advise us of
the basis for your conclusion that disclosure was not necessary and describe the process
you undertook to reach that conclusion.  We re fer you to paragraphs (a)(1) and (a)(4) of
Item 303 of Regulation S-K.
 As noted above, we seek to better unde rstand the basis for your decisions and
your disclosure.   Please provide  us with a written response to  these questions within ten
business days from the date of this lette r or tell us when you will respond.  Upon our
review of your response to these questions, we may have additional comments that we
will provide to you with any other comme nts we may have on your Form 10-K.
 Please contact me at (202) 551-3498 if you have any questions.       S i n c e r e l y ,

Linda van Doorn Senior Assistant Chief Accountant

Mail Stop 4561
      February 24, 2010

VIA U.S. MAIL AND FAX 212-507-3961

 Paul C. Wirth Finance Director and Controller Morgan Stanley 1585 Broadway New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal Year Ended
  November 30, 2008   Filed January 29, 2009
Proxy Statement Filed March 20, 2009 File No. 001-11758

Dear Mr. Wirth:

We have completed our review of your Form 10-K and related filings and do not,
at this time, have any further comments.

         S i n c e r e l y ,
Robert Telewicz   Senior Staff Accountant

CORRESP
1
filename1.htm

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.

 February 22, 2010

 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 supplement its February 8, 2010 response to your
letter of December 29, 2009, concerning its Annual Report on 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. In consideration of our telephone
conversation of February 18, 2010, we have prepared, in Appendix 1, draft disclosures that will appear in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 to address your comments.

 *    *    *    *    *

 In connection with responding
to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

 Sincerely,

 /s/    Paul C. Wirth

 Paul C. Wirth

 Finance Director and Controller

cc:

Ruth Porat, Chief Financial Officer

Jennifer Monick, Securities & Exchange Commission

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 2

 Appendix 1

 Draft Disclosures — Form 10-K for the calendar year ended December 31, 2009

 MD&A – Funding Management Policies

 Temporary Liquidity Guarantee Program (“TLGP”). In October 2008,
the Secretary of the U.S. Treasury invoked the systemic risk exception of the FDIC Improvement Act of 1991 and the FDIC announced the TLGP.

 Based on the Final Rule adopted on November 21, 2008, the TLGP provides a guarantee, through the earlier of maturity or June 30, 2012, of certain senior unsecured debt issued by participating Eligible Entities (including the
Company) between October 14, 2008 and June 30, 2009. Effective March 23, 2009, the FDIC adopted an Interim Rule that extends the expiration of the FDIC guarantee on debt issued by certain issuers (including the Company) on or after
April 1, 2009 to December 31, 2012. The maximum amount of FDIC-guaranteed debt a participating Eligible Entity (including the Company) may have outstanding is 125% of the entity’s senior unsecured debt that was outstanding as of
September 30, 2008 that was scheduled to mature on or before June 30, 2009. The ability of certain eligible entities (including the Company) to issue guaranteed debt under this program, under the Interim Rule described above, expired on
October 31, 2009.

 [*]

 3

 Appendix 1, continued

 9. Borrowings.

 Commercial Paper and Other Short-Term Borrowings.

 The table below summarizes certain information
regarding commercial paper and other short-term borrowings:

December 31,
2009(1)

December 31,
2008(2)

(dollars in millions)

Commercial Paper(3):

 Balance at period-end

$
        [*]

$
7,388

 Average balance

$
 [*]

$
7,066

 Weighted average interest rate on period-end balance

[*]

2.3
%

Other Short-Term Borrowings(4)(5):

 Balance at period-end

$
 [*]

$
2,714

 Average balance

$
 [*]

$
3,529

(1)
Average balances are calculated based upon weekly balances for 2009.

(2)
Average balances are calculated based upon month-end balances for the one month ended December 31, 2008.

(3)
Amounts at December 31, 2008 include commercial paper issued under the Temporary Liquidity Guarantee Program (“TLGP”).

(4)
These borrowings included bank loans, bank notes and structured notes with maturities of 12 months or less.

(5)
Certain structured short-term borrowings are carried at fair value under the fair value option. See Note 4 for additional information.

 Long-Term Borrowings.

 Maturities and Terms. Long-term borrowings consisted of the following (dollars in millions):

U.S. Dollar

Non-U.S. Dollar(1)

Fixed
Rate

Floating
Rate(2)

Index
Linked(3)

Fixed
Rate

Floating
Rate(2)

Index
Linked(3)

At
December 31,
2009(4)(5)(6)

At
December 31,
2008(4)

 Due in 2009

$
        [*]

$
        [*]

$
        [*]

$
        [*]

$
        [*]

$
        [*]

$
        [*]

$
20,580

 Due in 2010

[*]

[*]

[*]

[*]

[*]

[*]

[*]

25,129

 Due in 2011

[*]

[*]

[*]

[*]

[*]

[*]

[*]

24,915

 Due in 2012

[*]

[*]

[*]

[*]

[*]

[*]

[*]

24,199

 Due in 2013

[*]

[*]

[*]

[*]

[*]

[*]

[*]

21,665

 Due in 2014

[*]

[*]

[*]

[*]

[*]

[*]

[*]

9,753

 Thereafter

[*]

[*]

[*]

[*]

[*]

[*]

[*]

53,594

 Total

$
 [*]

$
 [*]

$
 [*]

$
 [*]

$
 [*]

$
 [*]

$
 [*]

$
179,835

 Weighted average coupon at period-end

[*]
%

[*]
%

[*]

[*]
%

[*]
%

[*]

[*]
%

4.8
%

(1)
Weighted average coupon was calculated utilizing non-U.S. dollar interest rates.

(2)
U.S. dollar contractual floating rate borrowings bear interest based on a variety of money market indices, including London Interbank Offered Rates (“LIBOR”)
and Federal Funds rates. Non-U.S. dollar contractual floating rate borrowings bear interest based primarily on Euribor floating rates.

(3)
Amounts include borrowings that are equity linked, credit linked, commodity linked or linked to some other index.

(4)
Amounts include long-term borrowings issued under the TLGP.

(5)
Amounts include an increase of approximately [*] as of December 31, 2009 to the carrying amount of certain of the Company’s long-term borrowings associated
with fair value hedges. The increase to the carrying value associated with fair value hedges by year due was approximately less than [*] due in 2010, [*] due in 2011, [*] due in 2012, [*] due in 2013, [*] due in 2014 and [*] due thereafter.

(6)
Amounts include a decrease of approximately [*] as of December 31, 2009 to the carrying amounts of certain of the Company’s long-term borrowings for which the
fair value option was elected (see Note 4).

 4

 Appendix 1, continued

 The Company’s long-term borrowings included the following components:

At December 31,

2009

2008

(dollars in millions)

 Senior debt

$
 [*]

$
165,181

 Subordinated debt

[*]

4,342

 Junior subordinated debentures

[*]

10,312

 Total

$
        [*]

$
179,835

 During 2009, the Company issued notes with a principal
amount of approximately [*]. The amount included non-U.S. dollar currency notes aggregating approximately [*]. These notes include the public issuance of approximately [*] of senior unsecured notes that were not guaranteed by the Federal Deposit
Insurance Corporation (“FDIC”). During 2009, approximately [*] of notes were repaid.

 During fiscal 2008, $56.1
billion of notes were repaid. Included in these repayments were approximately $12.1 billion of fixed rate and floating-rate long-term debt repurchases by the Company in the fourth quarter of fiscal 2008 resulting in a gain of approximately $2.3
billion. In connection with these repurchases, the Company de-designated certain swaps used to hedge the debt. These swaps were no longer considered hedges once the related debt was repurchased by the Company (i.e., the swaps were
“de-designated” as hedges).

 During the one month ended December 31, 2008, the Company issued notes with a
principal amount of approximately $13 billion. The amount included non-U.S. dollar currency notes aggregating approximately $17 million. During the one month ended December 31, 2008, approximately $5.7 billion of notes were repaid.

Senior debt securities often are denominated in various non-U.S. dollar currencies and may be structured to provide a return that is
equity-linked, credit-linked, commodity-linked or linked to some other index (e.g., the consumer price index). Senior debt also may be structured to be callable by the Company or extendible at the option of holders of the senior debt
securities. Debt containing provisions that effectively allow the holders to put or extend the notes aggregated [*] as of December 31, 2009 and $160 million as of December 31, 2008. Subordinated debt and junior subordinated debentures
generally are issued to meet the capital requirements of the Company or its regulated subsidiaries and primarily are U.S. dollar denominated.

 Senior Debt—Structured Borrowings. The Company’s index-linked, equity-linked or credit-linked borrowings include various structured instruments whose payments and redemption
values are linked to the performance of a specific index (e.g., Standard & Poor’s 500), a basket of stocks, a specific equity security, a credit exposure or basket of credit exposures. To minimize the exposure resulting from
movements in the underlying index, equity, credit or other position, the Company has entered into various swap contracts and purchased options that effectively convert the borrowing costs into floating rates based upon LIBOR. These instruments are
included in the preceding table at their redemption values based on the performance of the underlying indices, baskets of stocks, or specific equity securities, credit or other position or index. The Company accounts for these structured borrowings
containing embedded derivatives which, prior to the adoption of the fair value option, were bifurcated from the hybrid notes and accounted for at fair value. Effective December 1, 2006, the Company applied the fair value election in most cases
to these hybrid notes. The swaps and purchased options used to economically hedge the embedded features are derivatives and also are carried at fair value. Changes in fair value related to the notes and economic hedges are reported in Principal
transactions trading revenues.

 Subordinated Debt and Junior Subordinated Debentures. Included in
the Company’s long-term borrowings are subordinated notes (including the Series F notes issued by MS&Co. discussed below) of [*] having a contractual weighted average coupon of [*] at December 31, 2009 and $4,342 million having a
weighted average coupon of 4.78% at December 31, 2008. Junior subordinated debentures outstanding by the Company were [*] at December 31, 2009 and $10,312 million at December 31, 2008 having a contractual weighted

 5

 Appendix 1, continued

 average coupon of [*] at December 31, 2009 and 6.17% at December 31, 2008. Maturities of the subordinated and junior subordinated
notes range from fiscal 2011 to fiscal 2046. Maturities of certain junior subordinated debentures can be extended to 2067 at the Company’s option.

 At December 31, 2009, MS&Co. had a [*] fixed rate subordinated Series F note outstanding. The note matures in fiscal 2016. The terms of the note contain restrictive covenants that require, among
other things, MS&Co. to maintain specified levels of Consolidated Tangible Net Worth and Net Capital, each as defined therein.

 Asset and Liability Management. In general, securities inventories not financed by secured funding sources and the majority of assets are financed with a combination of short-term funding, floating rate long-term debt or
fixed rate long-term debt swapped to a floating rate. Fixed assets are generally financed with fixed rate long-term debt. The Company uses interest rate swaps to more closely match these borrowings to the duration, holding period and interest rate
characteristics of the assets being funded and to manage interest rate risk. These swaps effectively convert certain of the Company’s fixed rate borrowings into floating rate obligations. In addition, for non-U.S. dollar currency borrowings
that are not used to fund assets in the same currency, the Company has entered into currency swaps that effectively convert the borrowings into U.S. dollar obligations. The Company’s use of swaps for asset and liability management affected its
effective average borrowing rate as follows:

2009

Fiscal
2008

Fiscal
2007

One Month
Ended
December 31,
2008

 Weighted average coupon of long-term borrowings at period-end(1)

[*]

4.9%

5.0%

4.8%

 Effective average borrowing rate for long-term borrowings after swaps at period-end(1)

[*]

4.0%

5.1%

3.8%

(1)
Included in the weighted average and effective average calculations are non-U.S. dollar interest rates.

 Subsequent to December 31, 2009 and through January 31, 2010, the Company’s long-term borrowings (net of repayments)
decreased by approximately [*].

 Other. The Company, through several of its subsidiaries, maintains funded and
unfunded committed credit facilities to support various businesses, including the collateralized commercial and residential mortgage whole loan, derivative contracts, warehouse lending, emerging market loan, structured product, corporate loan,
investment banking and prime brokerage businesses.

 FDIC’s Temporary Liquidity Guarantee Program.

 As of December 31, 2009, the Company had long-term debt outstanding of [*] under the TLGP. As of
December 31, 2008, the Company had commercial paper and long-term debt outstanding of $6.4 billion and $9.8 billion, respectively, under the TLGP. These borrowings are senior unsecured debt obligations of the Company and guaranteed by the FDIC
under the TLGP. The FDIC has concluded that the guarantee is backed by the full faith and credit of the U.S. government.

 6

CORRESP
1
filename1.htm

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.

 February 22, 2010

 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 supplement its February 8, 2010 response to your letter of December 29, 2009,
concerning its Annual Report on 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. In consideration of our telephone conversation of February 18,
2010, we have prepared, in Appendix 1, draft disclosures that will appear in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 to address your comments.

 *        *        *        *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

 Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

 cc:

Ruth Porat, Chief Financial Officer

Jennifer Monick, Securities & Exchange Commission

Gregory G. Weaver, Deloitte & Touche LLP

James V. Schnurr, Deloitte & Touche LLP

 2

 Appendix 1

 [*]

 3

CORRESP
1
filename1.htm

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.

 February 8, 2010

 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 December 29, 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

 Financial Statements

 Notes to
Consolidated Financial Statements

 21. Quarterly Results (unaudited), page 187

 Comment:

1.
We have reviewed your response to our prior comment 5. In future filings, please expand your footnote and MD&A disclosure to include a more thorough discussion of
the errors corrected during the second quarter 2008. Specifically, please revise the segment footnote of your financial statements, and the segment discussion in your MD&A to include a description of the errors, the periods to which the errors
relate, and the effects the correction of the error had on segment results in the period corrected. Additionally, please indicate in your disclosure that the Company has determined that the errors are not material, and the rationale for arriving at
that conclusion.

 Response:

 In future filings, the Company will expand its footnote and MD&A disclosure to include a more thorough discussion of the errors corrected during the second quarter of fiscal 2008. The disclosure will
indicate that the Company had determined that the errors were not material and the rationale for arriving at that conclusion.

 Form 10-Q
for the quarterly period ended March 31, 2009

 Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations

 General

 Comment:

2.
We have read your response to our prior comment 6. Please quantify for us the impact that participation in the TLGP program has had on your operating results. In your
response tell us the weighted average rate at which the Company has been able to borrow funds from the program and the approximate interest expense charged to the Company. Additionally, to the extent you are able, tell us how the amounts charged to
the Company under the TLGP program compared to market rates at the time.

 Response:

 The weighted average rate at which the Company issued commercial paper and long-term debt, including TLGP fees, under the TLGP program as of
December 31, 2008 was [*] and [*], respectively. The weighted average rate of long-term debt, including TLGP fees, under the TLGP program as of March 31, 2009 was [*]. The Company did not issue any commercial paper under the program in the
first quarter of 2009. For the three month periods ended December 31, 2008 and March 31, 2009, the Company recorded approximate interest expense of [*] and [*], respectively, related to commercial paper and long-term debt outstanding under
the TLGP program.

 2

 The Company considered your comment regarding how the amounts charged to the Company under the TLGP program
compared to market rates at the time. The Company has not issued long-term debt or commercial paper under the TLGP program since March 2009 and did not issue any long-term unguaranteed debt from the end of the second quarter of fiscal 2008 until
later in the second quarter of 2009. The Company seeks to maintain target liquidity reserves that are sized to cover daily funding needs and meet strategic liquidity targets as outlined in the Company’s contingency funding plan. For the quarter
ended March 31, 2009 and the one month ended December 31, 2008, the average parent liquidity reserve was $61 billion and $64 billion, respectively, and the average total Company liquidity reserve was $145 billion and $142 billion,
respectively. Had the TLGP program not been available, the Company might not have issued additional debt during the above timeframe due to the Company’s liquidity profile. Considering the above, the Company believes that it is not reasonably
possible to meaningfully determine how the amounts charged to the Company under the TLGP program compared to market rates at the time because there are no appropriate benchmarks and any such estimation would be highly hypothetical.

 3

 *        *        *        *        *

 In connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of
the United States.

 Please feel free to contact me at 212-761-6686 if you would like further clarification or additional
information.

Sincerely,

 /s/ Paul C. Wirth

Paul C. Wirth

Finance Director and Controller

cc:
Ruth Porat, Chief Financial Officer

 Jennifer Monick, Securities & Exchange Commission

 Gregory G. Weaver, Deloitte & Touche LLP

 James V. Schnurr, Deloitte & Touche LLP

 4

Mail Stop 3010

      December 29, 2009
 VIA U.S. MAIL AND FAX (212)507-1869

Mr. Colm Kelleher Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036

Re: Morgan Stanley
 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

Dear Mr. Kelleher:

We have reviewed your response letter dated September 21, 2009 and have the
following additional comments.  If you disagree with our comments, we will consider your explanation as to why our comments are not applicable.  Please be as detailed as necessary in your explanation.
 Please understand that the purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing.  We look forward to working with you in these respects.  We welcome any questions you may have about our comments or on any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Colm Kelleher
Morgan Stanley
December 29, 2009 Page 2

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

Financial Statements
 Notes to Consolidated Financial Statements

  21. Quarterly Results (unaudited), page 187

 1. We have reviewed your response to our prior comment 5.  In future filings, please expand your footnote and MD&A disclosure to include a more thorough discussion of the errors corrected during the second quarter 2008.  Specifically, please revise the segment footnote of your financial statements, and the segment discussion in your MD&A to include a description of the errors, the periods to which the errors relate, and the effects the correction of the error had on segment results in the period corrected.  Additionally, please indicate in your disclosure that the Company has determined that the errors are not material, and the rationale for arriving at that conclusion.
 Form 10-Q for the quarterly period ended March 31, 2009

 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations
 General

 2. We have read your response to our prior comment 6.  Please quantify for us the impact that participation in the TLGP program has had on your operating results.  In your response tell us the weighted average rate at which the Company has been able to borrow funds from the program and the approximate interest expense charged to the Company.  Additionally, to the extent you are able, tell us how the amounts charged to the Company under the TLGP program compared to market rates at the time.

Colm Kelleher
Morgan Stanley December 29, 2009 Page 3

You may contact Jennifer Monick, Staff Accountant, at (202) 551-3295 or the
undersigned at (202) 551-3438 if you have questions.

      Sincerely ,

Robert Telewicz
Senior Staff Accountant

CORRESP
1
filename1.htm

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

 4

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

CORRESP
1
filename1.htm

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.

 May 29, 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

Proxy Statement filed March 25, 2009

File No. 001-11758

 Dear Mr. Telewicz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of April 9, 2009, concerning its Annual Report on Form 10-K (“Form 10-K”)
for the fiscal year ended November 30, 2008 and its 2009 Proxy Statement (“Proxy Statement”). For your convenience, we have restated your comments below.

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

 Item 1. Business

 Additional Regulation of U.S. Entities, page 15

 Comment:

1.
 Please tell us the net capital requirements imposed by the CFTC on MS&Co. as a registered futures commission merchant. Also, provide a more detailed description
of the

regulatory requirements imposed by the CFTC and the NFA on your subsidiaries. Please confirm that you will provide this disclosure in future filings.

 Response:

 Pursuant to the U.S.
Commodity Futures Trading Commission (“CFTC”) Rule 1.17(a)(1)(i), Morgan Stanley & Co. Incorporated (“MS&Co.”), as a registered futures commission merchant that is also a securities broker or dealer, must maintain
adjusted net capital equal to or in excess of the amount of net capital required by Rule 15c3-1(a) of the Securities and Exchange Commission (“SEC”) (17 CFR 240.15c3-1(a)); provided, however, that pursuant to CFTC Rule 1.17(c)(6)(i),
MS&Co. has elected to compute its adjusted net capital using the alternative capital deductions that, under SEC Rule 240.15c3-1(a)(7), the SEC has approved by written order.

 In addition to satisfying this net capital requirement, MS&Co., as a registered futures commission merchant, must comply with numerous regulatory requirements imposed by the CFTC, the National Futures Association
(“NFA”) and other self-regulatory organizations such as designated contract markets and designated clearing houses of which it is a member. These regulatory requirements address obligations related to, among other things, the registration
of the futures commission merchant and certain of its associated persons, membership with the NFA, the segregation of customer funds and the holding apart of a secured amount, the receipt of an acknowledgement of certain written risk disclosure
statements, the receipt of trading authorizations, the furnishing of daily confirmations and monthly statements, recordkeeping and reporting obligations, the supervision of accounts, and antifraud prohibitions. Among other things, the NFA has rules
covering a wide variety of areas such as advertising, telephone solicitations, risk disclosure, discretionary trading, disclosure of fees, minimum capital requirements, reporting and proficiency testing.

 MS&Co. has affiliates that are registered as commodity trading advisers (“CTAs”) and/or commodity pool operators (“CPOs”). Under CFTC and NFA
Rules, CTAs that manage accounts must distribute disclosure documents, and maintain specified records relating to their activities and clients. Under CFTC and NFA rules, CPOs have certain responsibilities with respect to each pool it operates. For
each pool, a CPO must prepare and distribute a disclosure document; distribute periodic account statements; prepare and distribute audited annual financial reports; and keep specified records concerning the participants, transactions, and operations
of each pool, as well as records regarding transactions of the CPO and its principals.

 As of November 30, 2008, MS&Co.’s net capital
requirement was $922 million. This amount takes into account the requirements imposed by the CFTC and the SEC. The Company will provide a more detailed description of the regulatory requirements imposed by the CFTC and the NFA on the Company’s
subsidiaries in its relevant future SEC filings.

 2

 Item 3. Legal Proceedings, page 28

 Comment:

2.
Please tell us the relief sought by plaintiffs in each of the litigation matters that you have disclosed. Also, tell us the factual basis alleged to underlie each of the proceedings
if it has not already been disclosed. Please confirm that you will provide similar disclosure in future filings.

 Response:

 In the Form 10-K, the Company disclosed, among other things, that it has been named, from time to time, as a defendant in various legal actions,
including arbitrations, class actions and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the actual or threatened legal actions include claims for substantial
compensatory and/or punitive damages or claims for indeterminate amounts of damages. In addition, the Company described certain litigation matters more specifically, which the Company categorized as the IPO Allocations Matters, Residential
Mortgage-related Matters, Auction Rate Securities Matters and Environmental Matters.

 As an initial matter, the amount of damages at issue in the cases
disclosed in this section, even if unspecified, are less than the threshold set forth in Instruction 2 of the Instructions to Item 103 of Regulation S-K (“Item 103”) (“No information need be given with respect to any proceeding
that involves primarily a claim for damages if the amount involved, exclusive of interests and costs, does not exceed 10 percent of the current assets of the registrants and its securities on a consolidated basis”). Accordingly, the litigation
disclosures in Item 3 of the Form 10-K are intended to provide investors with additional information beyond that required by Item 103.

 IPO
Allocation Matters

 The damages sought in In re Initial Public Offering Securities Litigation are unspecified. Beyond class action
status, the relevant prayers for relief seek “damages,” pre- and post-judgment interest, fees and costs, and such other relief as the Court may deem “just and proper.” As the Company disclosed in the Form 10-K and
further disclosed in the Company’s March 31, 2009 Quarterly Report on Form 10-Q (the “First Quarter 2009 Form 10-Q”), the parties have reached an agreement to settle this matter. The alleged factual basis for this proceeding,
is stated on page 28 of the Form 10-K.

 The relief sought in the derivative actions filed in the Western District of Washington, now captioned In
re Section 16(b) Litigation, is also unspecified. As disclosed in the Form 10-K, plaintiffs principally seek to recover profits generated in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended. Beyond
that, the prayer for relief asks for pre- and post-judgment interest, fees and costs, and such other relief as the court may deem “just and equitable.” The alleged factual basis for this proceeding, as disclosed in the Form 10-K, is
that the Company and other firms earned “short swing” profits, allegedly in violation of Section 16(b), while acting as underwriters in the initial public offerings for the subject companies. To

 3

avoid the statutory exception for underwriters contained in Section 16, plaintiffs also allege that defendants lacked good faith in connection
with their underwriting activities because of alleged laddering activities and an alleged scheme to share in customer profits. As disclosed in the First Quarter 2009 Form 10-Q, the court in the matter granted defendants’ motions to dismiss
these cases and an appeal is now pending.

 Residential Mortgage-related Matters

 In this subsection of the Form 10-K, the Company identified several different types of civil litigation. The first category concerns various lawsuits brought under Sections 11 and 12 of the Securities Act of 1933, as
amended, related to the Company’s role as a member of the syndicates that underwrote offerings of securities and mortgage pass through certificates for various entities that have been exposed to subprime and other mortgage-related losses.

 The Company, as part of its normal business, regularly underwrites securities offerings for various issuers, including financial institutions. When these
issuers experience financial difficulties after an offering, the Company is routinely named as one of the underwriter defendants in the litigation related to the offering at issue together with other members of the relevant underwriting syndicates.
As such, this litigation is generally incidental to the business of underwriting offerings of securities and thus does not ordinarily need to be disclosed under Item 103.

 Nevertheless, because the residential mortgage crisis has led to a larger than normal number of cases related to offerings for financial institutions, the Company decided to disclose the general nature of these cases,
the identities of the financial institutions to which they relate, and the jurisdictions in which these cases were pending. In this respect, the Company has gone beyond the disclosures provided by many of our peer firms which have also been named as
defendants in many of these cases. The Company also disclosed the fact that certain of these institutions had filed for bankruptcy protection. In addition, the Company included additional disclosure on page 130 of the First Quarter 2009 Form 10-Q.

 Given the large number of these actions, their legal and factual similarities, their early stage, and other factors, the Company believes that it is
appropriate to address this category of class actions in the aggregate as a general matter, while continuing to identify the individual issuers to which they relate. This category of cases usually concerns offerings related to twenty different
financial institutions. Accordingly, it would be confusing and repetitive to discuss them each separately, particularly since many of these matters involve multiple proceedings, multiple plaintiffs and multiple offerings. Nevertheless, as individual
cases progress, the Company will provide additional information concerning the relief sought and the factual basis of the claim for certain significant matters. For example, page 130 of the First Quarter 2009 Form 10-Q includes additional
disclosures regarding three of these purported class actions.

 In addition to the litigation discussed above, the Company also disclosed three other class
actions in this section: In re Morgan Stanley ERISA Litigation, Joel Stratte-McClure, et al. v. Morgan Stanley, et al., and Public Employees’ Retirement Systems of Mississippi v. Morgan Stanley, et al. The relief sought in these
cases includes class certification, unspecified compensatory

 4

damages, interest fees and costs. In addition to those types of relief, the plaintiffs in the Public Employees’ Retirement System of Mississippi v.
Morgan Stanley, et al. matter are also seeking unspecified rescissionary damages. The factual allegation related to these claims were summarized in the Form 10-K. The Company made additional disclosures on pages 130-131 of the First Quarter 2009
Form 10-Q.

 The remaining disclosures in this section of the Form 10-K related to the Shareholder Derivative Matter, styled Steve Staehr, Derivatively
on Behalf of Morgan Stanley v. John J. Mack, et al., and a lawsuit brought by the City of Cleveland against multiple financial institutions, including the Company. The shareholder derivative matter does not seek relief against the Company, and
instead seeks to assert claims on the Company’s behalf. The factual basis alleged to underlie this action is described in the Form 10-K as being related in large part to losses caused by certain subprime-related trading positions. There is
currently a motion to dismiss this case on the grounds that the shareholder demand requirement was not excused and therefore the shareholder does not have authority to assert a claim on behalf of the Company. If that motion is denied, the Company
will include additional disclosure concerning this matter in future filings.

 The lawsuit brought by the City of Cleveland seeks unspecified compensatory
damages, including damages related to items such as unspecified demolition costs associated with abandoned properties. The lawsuit has been brought against a large number of financial institutions, and contains few allegations specifically related
to the Company. As the Company disclosed in the Form 10-K, the lawsuit generally alleges that that the defendants’ activities in connection with securitizations of subprime loans created a “public nuisance” in Cleveland. On
May 15, 2009, the court presiding over this matter granted the defendants’ motion to dismiss the complaint.

 Auction Rate Securities Matters

 As stated in the Form 10-K, the primary relief sought in Miller v. Morgan Stanley & Co. Incorporated was damages,
attorneys’ fees and rescission; in Jamail v. Morgan Stanley et al. it was damages, attorneys fees and equitable and/or injunctive relief; in Bartholomew v. Morgan Stanley et al. it was damages, disgorgement, attorneys’
fees, and a declaration that the Company’s auction rate securities (“ARS”) transactions with the putative class members are void; and in Louisiana Municipal Police Employees Retirement System v. Mack, et al., and
Thomas v. Mack, et al., it is unspecified compensatory damages, restitution from the defendants with respect to compensation, benefits and profits obtained, and the institution of certain reforms to the Company’s internal
control functions. As disclosed in the First Quarter 2009 Form 10-Q, the Miller, Jamail and Bartholomew actions have each been voluntarily dismissed without prejudice.

 Each of these litigations concerns the failure of the ARS market in 2008. In Miller and Jamail, the plaintiffs’ primary factual premise, as stated in the Form 10-K, was that the
Company failed to disclose material facts with respect to ARS. In Bartholomew, again as stated in the Form10-K, it was that the Company made misrepresentations and omissions with respect to ARS and breached a fiduciary duty to the
putative class by failing to participate in auctions. In Louisiana Municipal Employees Retirement System and in Thomas the alleged factual basis was, among

 5

other things, that, over the relevant period, the Company’s public filings and statements were materially false and misleading in that they failed
to disclose the illiquid nature of its ARS inventories, that the Company’s practices in the sale of ARS exposed it to significant liability for settlements and judgments, and that during the relevant period certain
defendants sold the Company’s stock while in possession of material non-public information.

 Environmental Matters

 The disclosure in the Form 10-K concerning the proposed administrative settlement received from the U.S. Environmental Protection Agency states the amount of the proposed
civil penalty and the alleged factual basis for the proposed administrative settlement.

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

 General

 Comment:

3.
Please tell us what consideration you gave to disclosing the gain/loss on all items that are carried at fair value.

 Response:

 Although the Company recently converted to a bank holding
company, the Company historically has operated as a broker-dealer firm and our principal “accounting model” is fair value. Accordingly, the Company continues to risk manage and carry a significant amount of its financial instruments at
fair value. Therefore, a vast majority of changes in fair value are recorded in Principal transactions revenue. The Company discusses Principal transactions revenue by

Mail Stop 4561
      April 9, 2009

VIA U.S. MAIL AND FAX (212) 507-1869

 Colm Kelleher Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal Year Ended
  November 30, 2008   Filed January 29, 2009
Proxy Statement Filed March 20, 2009 File No. 001-11758

Dear Mr. Kelleher:

We have reviewed your filing and have the following comments.  In our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.  After reviewing this inform ation, we may raise additional comments.
  Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 2   Form 10-K for the fiscal year ended November 30, 2008

 Item 1. Business

 Additional Regulation of U.S. Entities, page 15

 1. Please tell us the net capital requiremen ts imposed by the CFTC on MS&Co. as a
registered futures commission mercha nt.  Also, provide a more detailed
description of the regulat ory requirements imposed by the CFTC and the NFA on
your subsidiaries.  Please confirm that you wi ll provide this disc losure in future
filings.
 Item 3. Legal Proceedings, page 28

2. Please tell us the relief sought by plainti ffs in each of the litigation matters that
you have disclosed.  Also, tell us the fact ual basis alleged to underlie each of the
proceedings if it has not already been disclosed.  Please confirm that you will
provide similar disclosure in future filings.
 Item 7. Management’s Discussion and Analys is of Financial Condition and Results of
Operations

General
 3. Please tell us what consideration you gave  to disclosing the gain/loss on all items
that are carried at fair value.
 4. We note that you disclose the amount of each line item that is accounted for at fair
value in your statements of financial c ondition. Please tell us what consideration
you gave to further disclosing how much of those assets an d liabilities are
accounted for at fair value pursuant to the fair value option rather than pursuant to
other accounting guidance.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 3   5. For credit protection sold and credit protection purchased, please tell us and
consider disclosing the extent to wh ich the derivative activity was for the
following purposes:
• Provide default risk protection to o ffset credit exposure to your holdings
of the related reference entity’s debt  in your loan portf olio, investment
portfolio, or loan commitments outstanding;
• Create new credit exposure fo r your own trading purposes;
• Reflect credit exposures taken for th e benefit of your clients; and
• Provide an offset to credit exposure taken for the benefit of clients.
Further, discuss your overall strategies  employed in your credit derivatives
portfolio as well as any changes in thos e strategies during the periods presented.
 6. In addition to the above, please tell us and consider disclosing the following
information related to your credit default swaps:
• Separately quantify the gross realized  gains and losses from your credit
derivative activity.
• Discuss any trends experienced with in the portfolio both in terms of
positions held and realized gains and losses. Specifically disclose the reasons for the significant changes in  the notional amounts as well as the
reasons for the changes in the fair values of the swaps. Discuss any expected changes to those trends.
• Discuss the types of counterparties (e.g. broker-dealers, other financial
institutions, non-financial instituti ons, and insurance and financial
guaranty firms) to your credit protec tion purchased.  Consider quantifying
the notional amount of credit deri vatives by type of counterparty,
separated between whether you pur chased protection from the
counterparty or sold protec tion to the counterparty.
• Discuss how you incorporated your own credit risk and the counterparty’s
credit risk in your valuati on of the credit derivative.
 Certain Factors Affecting Results of Operations

 Morgan Stanley Debt, page 47

 7. Please tell us what consideration you ga ve to disclosing the portion of the $2.3
billion gain from repurchasing your de bt that was due to changes in the
Company’s creditworthiness and that was due  to changes in market terms.  Also,
please tell us if this debt was recorded at fair value prior to  the repurchase.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 4   Business Segments

 Institutional Securities

 Equity Sales and Trading Revenues, page 51

 8. We note your disclosure that your pr ime brokerage business experienced
significant outflows as clients withdrew  their cash balances and reallocated
positions.  Tell us what consideration you have given to providing an analysis of the activity in client accounts similar to that provided for your asset management segment on page 61.
 Other Matters

 Real Estate-Related Positions, page 63

 9. We note you excluded amounts related to mo rtgage-related securi ties portfolios in
your Subsidiary Banks from your disclosu res on page 65 and 66.  Please tell us
why management believes it was not necessary to include this information for your Subsidiary Banks.

Critical Accounting Policies

 Fair Value

 Financial Instruments Measured  at Fair Value, page 70

 10. We note recent market conditions have  caused certain instruments to be
reclassified to Level 3.  As the valu ation of Level 3 in struments requires
significant judgment by management, please tell us what consideration you gave
to providing a sensitivity an alysis related to the valuation of these instruments.
 Commitments and Contract ual Obligations, page 84

 11. We note that the amount of Long-term borrowings within your contractual
obligations table appears to only include principal payments.  Please tell us why
you have not included interest related to your Long-term borrowings.  Please refer
to footnote 46 in our Release 33-8350.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 5   Financial Statements

 Consolidated Statements of Financial Condition, page 107

 12. We note you have performed an interim impa irment test during your fourth fiscal
quarter and recorded an impairment charge for a portion of your goodwill.  It appears that your market cap italization continues to be  significantly below the
book value of your equity.  Please provide us  with a summary of your results from
Step 1 and Step 2 of your SFAS 142 impairment test.
 Consolidated Statements of Income, page 109

 13. It appears your line item fo r other non-interest expenses  aggregates items that are
greater than one percent of total interest income and other income, such as certain
impairment charges.  Please tell us how you have complied with Rule 9-04.14 of Regulation S-X, or tell us why you believe  it was not necessary to disaggregate
these items.
 Notes to Consolidated Financial Statements

 3. Fair Value Disclosures

Fair Value Measurements
 Financial Instruments Owned and Financia l Instruments Sold, Not Yet Purchased

 Derivative and Other Contracts

 OTC Derivative Contracts, page 128

 14. Please clarify for us where your credit deri vatives are classified  within the fair
value hierarchy.
 8. Borrowings

 Long-Term Borrowings

 Maturities and Terms, page 147

 15. Explain to us how you determined it would be appropriate to disclose maturities
of long term debt net of fair value adjust ments.  Reference is made to paragraph
10 of SFAS 47.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 6   9. Commitments, Guarantees and Contingencies

 Commitments, page 149

 16. Please tell us what consideration you have  given to disclosing  the allocation of
primary lending commitments between investment grade and non-investment
grade.
 Contingencies, page 156

 17. We note that you are involved in several le gal matters as discussed in Item 3 of
your Form 10-K.  Please tell us how you have complied with the disclosure
requirements of paragraphs 9 and 10 of  SFAS 5, related to these matters or
explain to us why no additional disclosure is necessary.

Auction Rate Securities Matters, page 157

 18. Explain to us why you have not accrued your total exposure as it relates to ARS
eligible under the repurchase program in  accordance with paragraph 10 of FIN 45.
Additionally, explain to us how you determined the fair value of your auction rate
security purchase obligations.

13. Interest and Dividends and Interest Expense, page 167

 19. Given the Company’s recent conversion to a bank holding company, explain to us
whether you have reconsidered your po licy of presenting interest expense on
financial instruments sold, not yet purcha sed as a reduction of interest revenue.
Reference is made to paragraph 7.105 of  the AICPA’s audit guide for Depository
and Lending Institutions.
 20. Business Acquisitions and Dispositi ons and Sale of Minority Interest

 MSCI, page 185

 20. Given your two year history of selling sh ares of MSCI, and your disclosure that
you may ultimately divest your entire inte rest in MSCI, explain to us how you
determined it would be appropriate to r ecognize a gain on the sa le of subsidiary
stock in accordance with question 2 of SA B Topic 5h.  Furthermore, please tell us
how you have complied with the classifi cation and disclosure requirements of
question 6 of SAB Topic 5h as it relates to the gain on sale of MSCI shares.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 7   Morgan Stanley Wealth Management S.V., S.A.U., page 186

 21. Please explain to us how you considered  the guidance in pa ragraph 42 of SFAS
144 and EITF 03-13 in determining whether the operations and gain and sale of
MSWM S.V should be presented as discontinued operations.
 21. Quarterly Results (unaudited), page 187

 22. It is unclear from your disclosure if the two adjustments you refer to in note 1 to
your quarterly results table are due to errors in prev iously issued financial
statements.  Please clarify.  To the extent either of these adjustments is due to an
error, explain to us how you have met th e disclosure requirements of SFAS 154.
 Proxy Statement on Schedule 14A

 Executive Compensation

 II. Compensation Program for 2008

 A. Overview of Key Actions, page 14

23. We note your reference to Mr. James Gorm an as one of your three most senior
officers.  Please tell us why he is not listed as one of your named executive officers in the Summary Comp ensation Table on page 26.
 III. 2008 Compensation Process and Decisions

 B. Evaluating Company and Individual Performance

 Peer Group Data, page 18

 24. Please tell us which competitors the CM DS Committee considered in connection
with 2008 compensation.  We note that  you identified the “investment bank”
competitors but concluded that changes within the industry made this group no
longer a useful comparison.  We also note that you have identified a group of
“core competitors,” but it is not clear whether this is the group considered by the committee.  In addition, tell us wh ether the CMDS Committee targeted
compensation at a certain range compared to the peer group.  Please confirm that
you will provide comparable disclosure in your future filings.

Colm Kelleher
Morgan Stanley April 9, 2009 Page 8   Evaluating Company and Indivi dual Performance, page 19

 25. The introductory paragraph to this s ection states that the CMDS Committee
evaluated Company, business unit, and indi vidual performance against the metrics
and priorities described under “Facto rs Considered in 2008 Compensation
Decisions.”  The description of this evaluation, however, does not appear to
address any of the bullet points list ed under “Client, product and business
development” on pages 17 and 18.  Pleas e provide us with a more specific
discussion and analysis of how the co mmittee considered these factors in
determining 2008 compensation awards.  C onfirm that you will provide similar
disclosure in future filings.
 Other Executive Performance, page 20

 26. We note that Messrs. Kelleher, Ni des and Lynch’s compensation was
significantly reduced from the prior fiscal year and that each received an incentive
compensation award.  Please explain for us in greater detail why the CMDS Committee elected to reduce NEO compen sation by the specific amounts cited
and why it awarded incentive compensation to these NEOs.  Confirm for us that
you will include such disclosure in future filings.

IV. Changes to Compensation Program for 2009

 B. New Long-Term Performance Based Co mpensation Program for 2009, page 23

 27. We refer to your new performance-based stock unit incentive program.  Please
confirm that you will disclose in your fu ture filings the target award for each
named executive officer and the members of the comparison group of other financial industry companies.
 2008 Summary Compensation Table, page 26

 28. Please provide us with a narrative summary of the material terms of each named
executive officer’s employment agreemen t or arrangement, as required by Item
402(e) of Regulation S-K.  Provide similar disclosure in future filings.
 Potential Payouts for Certain NEOs, page 41

 29. Please provide us with an expanded disc ussion that addresses potential payouts
for each of your named executive officers or explain why the current disclosure, which covers only Mr. Mack’s potential pa youts, is sufficient.  Refer to Item
402(j) of Regulation S-K.

*    *    *    *

Colm Kelleher
Morgan Stanley April 9, 2009 Page 9
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please s ubmit your response letter on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

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

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
You may contact Jennifer M onick, Senior Staff Account ant, at (202) 551-3295, or
the undersigned at (202) 551- 3438 if you have questions regarding comments on the
financial statements and related matters.  Please contact Kris tina Aberg, Attorney
Advisor, at (202) 551-3404 or Karen Garnett,  Assistant Director, at (202) 551-3785 with
any other questions.

         S i n c e r e l y ,
Robert Telewicz   Senior Staff Accountant

Mail Stop 4561

      May 29, 2008

VIA U.S. MAIL AND FAX 212-507-1869

Mr. Colm Kelleher
Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal Year Ended
  November 30, 2007
  Filed January 29, 2008
File No. 001-11758

Dear Mr. Kelleher:

We have completed our review of your Form 10-K and related filings and do not,
at this time, have any further comments.

        S i n c e r e l y ,

Kevin Woody
Branch Chief

CORRESP
1
filename1.htm

Correspondence

 1585 Broadway

 New York, New York
10036

 May 28, 2008

 By U.S. Mail & Facsimile to 202-551-3295

 Mr. Kevin Woody

 Branch Chief

 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, 2007

 File No. 001-11758

 Dear Mr. Woody:

 Morgan
Stanley (the “Company”) is pleased to respond to your letter of April 24, 2008, concerning its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended November 30, 2007. For your convenience, we have restated
your comments below.

 Form 10-K for the year ended November 30, 2007

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

 Results
of Operations

 Fiscal 2007 Performance, page 34

 Comment:

1.
Please tell us how the appreciation of investments related to certain employee deferred compensation plans resulted in higher revenues.

 Response:

 The Company maintains various deferred compensation plans
for the benefit of certain employees that provide a return to the participating employees based upon the performance of various referenced investments. These plans do not result in the employees making a direct investment in the underlying
investments nor do the plans themselves invest in referenced investments. Rather, the Company directly owns investments that provide an offset to the obligations that the Company has to the participating employees for any return on the underlying
referenced investments.

 As these investments are made by the Company in a principal capacity, increases in the value of such investments result in an
increase in revenues. Such investments are recorded primarily in Financial instruments owned – Investments on the Company’s consolidated statement of financial condition, with changes in value recognized primarily within
Revenues: Principal transactions – Investments on the Company’s consolidated statements of income. The payable arising from the Company’s obligations under the related deferred compensation plans is reflected in Other
liabilities and accrued expenses on the Company’s statement of financial condition, and the related expense is reflected within Non-interest expenses: Compensation and benefits on the Company’s consolidated statements of income.

 In response to your comment and to clarify the nature of the Company’s investments made in connection with deferred compensation plan obligations,
the following disclosure will be included in future filings of the Company’s financial statements within the Summary of Significant Accounting Policies footnote:

 Deferred Compensation Arrangements

 The Company also maintains various deferred compensation plans for the benefit of certain employees that provide a return to the participating employees based upon the performance of various referenced investments. The Company often invests
directly, as a principal, in such referenced investments related to its obligations to perform under the deferred compensation plans.

 2

Changes in value of such investments made by the Company are recorded primarily in Principal transactions – Investments. Expenses associated with
the related deferred compensation plans are recorded in Compensation and benefits.

 Financial Statements

 Consolidated Statements of Financial Condition, page 101

 Comment:

2.
Please tell us how you account for the non-controlling interest in entities in which you have a controlling financial interest and certain VIEs on your Consolidated Statements of
Financial Condition and Consolidated Statements of Income.

 Response:

 Non-controlling interests in the net assets of the Company’s consolidated subsidiaries are reflected in Other liabilities and accrued expenses on the Company’s consolidated statement of financial
condition. Non-controlling interests’ share of the net income of the Company’s subsidiaries are reflected in Non-interest expenses: Other on the Company’s consolidated statements of income. The amounts related to
non-controlling interests were de minimis in relation to the Company’s total liabilities as of November 30, 2007 and total non-interest expenses for the fiscal year ended November 30, 2007.

 Notes to Consolidated Financial Statements

 Note 2. Summary of
Significant Accounting Policies

 Hedge Accounting

 Net Investment Hedges, page 116

 Comment:

3.
Please tell us the nature of the forward points and how you accounted for them. Within your response, reference the authoritative literature relied upon by management.

 Response:

 Forward points in a foreign
currency forward contract are the number of basis points added to or subtracted from the spot rate required to calculate the forward rate. The number of basis points is determined by the interest rates in the market for each currency being traded.

 3

Paragraph 42 of Statement of Financial Accounting Standards (“SFAS”) No. 133, Accounting for Derivative Instruments and Hedging Activities
(as amended) (“SFAS No. 133”) provides guidance on accounting for hedges of the foreign currency exposure of a net investment in a foreign operation, and states the following:

 A derivative instrument or a nonderivative financial instrument that may give rise to a foreign currency transaction gain or loss under Statement 52 can
be designated as hedging the foreign currency exposure of a net investment in a foreign operation, provided the conditions in paragraphs 40(a) and 40(b) are met. (A nonderivative financial instrument that is reported at fair value does not give rise
to a foreign currency transaction gain or loss under Statement 52 and, thus, cannot be designated as hedging the foreign currency exposure of a net investment in a foreign operation.) The gain or loss on a hedging derivative instrument (or the
foreign currency transaction gain or loss on the nonderivative hedging instrument) that is designated as, and is effective as, an economic hedge of the net investment in a foreign operation shall be reported in the same manner as a translation
adjustment to the extent it is effective as a hedge.

 In addition, the Derivatives Implementation Group (“DIG”) concluded in DIG No. H8,
Foreign Currency Hedges: Measuring the Amount of Ineffectiveness in a Net Investment Hedge, that an entity is permitted to assess and measure the amount of ineffectiveness of a net investment hedge using a method based on changes in
spot rates which allows for the change in the fair value of the derivative attributable to changes in the difference between the forward rate and spot rate to be excluded from the measure of hedge ineffectiveness and to be reported directly in
earnings (“spot method”).

 Lastly, paragraph 63(c) of SFAS No. 133 states the following:

 If the effectiveness of a hedge with a forward or futures contract is assessed based on changes in the fair value attributable to changes in spot prices,
the change in fair value of the contract related to the changes in the difference between the spot price and the forward or futures price would be excluded from the assessment of hedge effectiveness.

 The Company utilizes forward foreign exchange contracts to manage the currency exposure relating to its net investments in non-U.S. dollar functional currency
operations. In accordance with the authoritative literature, the Company designates changes in the spot value of such foreign currency forward contracts as hedges of the changes in spot value of its net investments in non-U.S. dollar functional
currency operations.

 4

In accordance with the spot method described in DIG No. H8 and the guidance in paragraph 63(c) of SFAS No. 133, the Company has excluded forward points
from the assessment and measurement of net investment hedge effectiveness and records the change in fair value of the foreign currency forward contracts attributable to the forward points directly to Revenues: Interest and dividends on the
Company’s consolidated statements of income.

 Schedule I

 Condensed Statements of Cash Flows, page S-4

 Comment:

4.
Please tell us how your classification of securities purchased under agreement to resell with affiliate as an investing activity complies with SFAS 102.

 Response:

 The securities purchased under agreements to resell with
affiliates are accounted for as secured loans to the parent’s affiliates in accordance with SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. These agreements, which are
short term in nature, are primarily entered into for the purpose of investing the parent company’s cash.

 The securities received by the parent under
these agreements are collateral for the secured loans, which themselves are accounted for on an accrual basis. SFAS No. 102, Statement of Cash Flows – Exemption of Certain Enterprises and Classification of Cash Flows from Certain
Securities Acquired for Resale (“SFAS No. 102”) addresses the cash flow statement presentation of purchases and sales of securities and other assets, as opposed to cash flows related to loans and associated collateral
arrangements. Accordingly, the Company does not believe that SFAS No. 102 provides relevant guidance on the classification of these arrangements.

 In
determining the appropriate classification of cash flows related to the parent company’s securities purchased under agreements to resell, the Company considered the guidance in SFAS No. 95, Statement of Cash Flows (“SFAS
No. 95”). Given the secured lending nature of these transactions, the Company specifically considered the guidance in paragraph 17(a) of SFAS No. 95, which states that cash flows from investing activities include
“[d]isbursements for loans made by the enterprise…”.

 5

In determining the appropriate classification for the securities purchased under agreements to resell with affiliates, the Company further considered the
parent company’s business intent for entering into these arrangements. Given that these arrangements were entered into with the goal of investing the parent company’s cash, the Company believes the classification of cash flows related to
these arrangements as investing activities is appropriate.

 *         *
        *         *         *

 In
connection with responding to your comments, we acknowledge that:

•

 the Company is responsible for the adequacy and accuracy of the disclosure in the filings;

•

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

•

 the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United
States.

 Please feel free to contact me at 212-761-5656 or Paul C. Wirth, our Controller and Chief Accounting Officer at 212-761-6686, if
you would like further clarification or additional information.

 Sincerely,

 /s/ Colm Kelleher

Colm Kelleher

Chief Financial Officer

cc:
Jennifer Monick, Securities & Exchange Commission

 Gregory G. Weaver, Deloitte & Touche LLP

 James V. Schnurr, Deloitte & Touche LLP

 6

Mail Stop 4561
      April 24, 2008

VIA U.S. MAIL AND FAX 212-507-1869

 Mr. Colm Kelleher Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY  10036

Re: Morgan Stanley
Form 10-K for Fiscal Year Ended
  November 30, 2007   Filed January 29, 2008
File No. 001-11758

Dear Mr. Kelleher:
We have reviewed your filing and have the following comments.  In our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.  After reviewing this inform ation, we may raise additional comments.
  Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our  comments or on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Mr. Colm Kelleher
Morgan Stanley April 24, 2008 Page 2   Form 10-K for the fiscal year ended November 30, 2007

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

 Fiscal 2007 Performance, page 34

 1. Please tell us how the appreciation of investments related to certain employee
deferred compensation plans resulted in higher revenues.
 Financial Statements

 Consolidated Statements of Financial Condition, page 101

 2. Please tell us how you account for the non-cont rolling interest in entities in which
you have a controlling financial interest  and certain VIEs on your Consolidated
Statements of Financial Condition and C onsolidated Statements of Income.
 Notes to Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies
 Hedge Accounting

 Net Investment Hedges, page 116

 3. Please tell us the nature of the forw ard points and how you accounted for them.
Within your response, reference the authoritative literature relied upon by
management.
 Schedule I

 Condensed Statements of Cash Flows, page S-4

 4. Please tell us how your classification of  securities purchased under agreement to
resell with affiliate as an invest ing activity complies with SFAS 102.

*    *    *    *

Mr. Colm Kelleher
Morgan Stanley April 24, 2008 Page 3
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please f ile your response letter on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comments.

 We urge all persons who are responsible  for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a
statement from the company acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

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

• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filings or in response to our comments on your filings.
You may contact Jennifer Monick, Sta ff Accountant at (202) 551-3295, or the
undersigned at (202) 551-3629 if you have questions.           S i n c e r e l y ,
Kevin Woody   Branch Chief

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

         February 13, 2008  Room 7010  David H. Sidwell Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended November 30, 2006
Form 10-Q for the Fiscal Quarter Ended February 28, 2007
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed your response letter da ted February 1, 2007 and appreciate the
additional detailed information you have provided.
 In our initial review of the above referenced documents, we noted disclosures that you
originate, trade, make markets and take proprietary positions in, and act as principal of, mortgage related and real estate loan produc ts.  However it was unclear to us from the
above referenced documents the exposure you had to the subprime market.  The purpose
of our August 30, 2007 letter was to get cl arification about yo ur exposure to any
subprime loans or trading positions, including a comprehensive analysis of your portfolio and exposure, a discussion and analysis of any impairment charges recorded or potential
impairments and your risk ma nagement philosophies.
 Your response dated November 27, 2007 clar ified your risk management policy and
control structure which described in greater detail the process of originating loans and
your most common disposition strategies.  You discussed your investment strategy with regards to CDOs and the risk management process of evaluating those instruments and using statistical techniques to review the mark et risk exposures related to your portfolios.
Your response further quantified your whole loan portfolio and your trading positions in
subprime related securities.  All of the above informa tion that you provided in your
November 27, 2007 response provided a more detailed understanding of your exposure to the subprime sector than had been disc losed in your Form 10-K for 2006.

David H. Sidwell
Morgan Stanley February 13, 2008 Page 2  In November 2007, you recorded $9.4 billion of  write downs related to US subprime and
other mortgage related exposures.  We noted  in your Form 10-Q for August 31, 2007 that
you disclosure briefly discussed that the US  economy was experiencing signs of slowing
during the third quarter 2007, primarily reflec ting difficult conditions in the residential
real estate and credit markets and that c oncerns about the impact of subprime loans
caused the broader credit  markets to deteriorate over th e quarter.  It appears that you
could have better addressed the possibility that the subprime lending business may have a
material adverse impact on your financial condition, results of operations and liquidity.    We note that your Form 10-K for 2007 includes enhanced discussion of the US subprime
market and your related activities and exposur es.  In future filings, we urge you to
carefully consider the adequacy  and transparency of your disc losures with regards to your
involvement with any
 trading positions, investments, derivatives, available for sale
securities, investment in, and by, subsidiaries  and any and all exposures to off-balance
sheet entities and unrelated entities and the impact any of these positions may have on
your companies, financial position, results of operations and liquidit y. In particular we
urge you to consider detailed and quantified information about specific risks in concentrated and material areas, especially when there exists the obvious perception that
a particular exposure is overval ued, or alternatively, entering into a period of particular
market uncertainty. Overly general risk di scussions and dense narrative cannot replace
specific, well presented, quantified data that is proportional to the perceived possibility of
adverse loss in a particular area.  Based on the above, and with due recognition of the above consid erations regarding
future disclosures, we have no fu rther comment at this time.

Sincerely,   John Hartz Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

Correspondence

 1585 Broadway

 New York, New York
10036

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.

 February 1, 2008

 By U.S. Mail & Facsimile to 202-772-9368

 Mr. John Hartz

 Senior Assistant Chief 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, 2006

Form 10-Q for the Fiscal Quarter Ended February 28, 2007

File No. 001-11758

 Dear Mr. Hartz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of January 3, 2008, concerning its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended November 30, 2006 and Quarterly Report
on Form 10-Q (“Form 10-Q”) for the fiscal quarter ended February 28, 2007. For your convenience, we have restated your comments below.

 Form 10-K for the year ended November 30, 2006

 Note 4. Collateralized and Securitization Transactions, page 126

1.
We have reviewed your response to prior comment 1 in our letter dated August 30, 2007 and appreciate the detailed information you have provided. Please address the following
comments with regards to your subprime lending:

•

 Please reconcile and explain the difference between the amount of your subprime residential mortgage loans at August 31, 2007 that is included in your
response C to prior comment 1 to the $12.3 billion amount presented in your subprime analysis for 2007 that was included in your response and also included in your Form 8-K filed November 7, 2007. For example, explain how your trading positions
in subprime related securities and derivatives are reflected in this table.

 Response A:

 The Company’s prior response C was limited to quantifying the Company’s U.S. subprime whole loan positions. The $12.3 billion amount quantified in the
Company’s Form 8-K filed on November 7, 2007 (“Form 8-K”) includes the statement of financial condition net carrying value, as of August 31, 2007, of all the Company’s U.S. subprime trading exposures, which includes
derivatives and securities in addition to whole loan positions.

 The [*] carrying value of U.S. subprime mortgage loans as of August 31, 2007 referred
to in prior response C is reflected in Financial instruments owned – Corporate and other debt on the Company’s statement of financial condition. The reconciliation of this [*] amount to the August 31, 2007 $12.3 billion net
statement of financial condition carrying value of all U.S. subprime trading exposures disclosed in the Form 8-K is as follows (in $ billions):

 Carrying value of U.S. subprime mortgage loans per earlier Response C

[*]

 Less: Loans related to on-balance sheet securitizations (a)

[*]

 Carrying value of U.S. subprime mortgage loans per table in Form 8-K

2.9

 Net carrying value of U.S. subprime related securities and derivatives per Form 8-K:

 Super Senior Mezzanine credit default swaps

$
(1.8
)

 ABS CDO CDS

1.1

 ABS CDO Bonds

1.6

 Total Rate of Return Swaps

0.1

 ABS Bonds

4.2

 ABS CDS

4.2

 Total net carrying value of U.S. subprime related securities and derivatives

9.4

 Total net carrying value of U.S. subprime trading exposures per Form 8-K

$
 12.3

 2

(a)
This [*] billion amount relates to subprime mortgage loans transferred in securitizations accounted for as secured borrowings within the Company’s statement of financial
condition based on an analysis of the sale criteria in Statement of Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. The Company does not include such loans in
its U.S. subprime trading exposure disclosures as such loans have been legally transferred into securitization trusts and the liabilities issued by these trusts do not have recourse to the general credit of the Company.

 As can be seen in the above reconciliation, the Company’s exposure to the U.S. subprime market is primarily related to non-whole loan positions, such as derivatives
and securities. Indeed, the majority of the Company’s U.S. subprime exposure is related to an unfavorable subprime mortgage-related trading strategy, which is discussed further in Response E.

•

 For each amount quantified in responses C—K, please reconcile these amounts to amounts in your statement of financial position at August 31, 2007 and
provide explanations for any material differences.

 Response B:

 The following are the reconciliations requested:

 Prior response C – Subprime loans: The [*] carrying value of
U.S. subprime mortgage loans as of August 31, 2007 is reflected in the August 31, 2007 Financial instruments owned – Corporate and other debt balance of $160.0 billion on the Company’s statement of financial condition. The
Company carries these loans at fair value. Accordingly, the unpaid principal amount of [*] related to U.S. subprime mortgage loans as of August 31, 2007, which is also discussed in prior response C, is reflected on the statement of financial
condition at the [*] carrying value. Although the Company carries such loans at fair value, the Company provided the unpaid principal balance in its prior response C in connection with providing a breakdown of loans by FICO score. The Company tracks
such FICO category information only by unpaid principal balance, not fair value.

 Prior response D – Non-performing loans: The [*] carrying
value of non-performing U.S. subprime mortgage loans as of August 31, 2007 is a subset of the [*] carrying value of U.S. subprime mortgage loans discussed in prior response C. Accordingly, this amount is reflected in Financial instruments
owned-Corporate and other debt on the statement of financial condition. As mentioned previously, the Company carries such loans at fair value. Therefore, the unpaid principal amount of [*] related to non-performing U.S. subprime mortgage loans
as of August 31, 2007 is reflected on the statement of financial condition at its [*] carrying value.

 3

 Prior response E- Retained interests: The [*] carrying value of retained interests in U.S. subprime residential
mortgage loans as of August 31, 2007 is reflected in the August 31, 2007 Financial instruments owned – Corporate and other debt balance of $160.0 billion on the Company’s statement of financial condition. Note that the [*]
carrying value of retained interests is a subset of the $4.2 billion in ABS Bonds, which is reflected in the $9.4 billion total net carrying value of all trading investments in U.S. subprime related securities and derivatives as of August 31,
2007.

 Prior response F – Investments in securities backed by subprime mortgages: The Company’s trading investments in U.S. subprime
related securities and derivatives, excluding loans, totaled $9.4 billion as of August 31, 2007. This $9.4 billion balance is detailed in the reconciliation provided in Response A of this letter, and is derived from the Form 8-K. Please note
that in our prior response F, we provided October 31, 2007 numbers and not August 31, 2007 amounts. Given your request for reconciliations of the August balance sheet amounts, we are reconciling the August 31, 2007 amount.

The $9.4 billion subprime trading securities and derivatives net carrying value as of August 31, 2007, as detailed in Response A, is reflected as follows in the
Company’s statement of financial condition: Financial instruments owned of [*] and Financial instruments sold, not yet purchased of [*]. Such balance sheet amounts reflect counterparty netting for derivatives to the extent that
there are positions with the same counterparty that are subprime related; they do not reflect counterparty netting to the extent there are positions with the same counterparty that are not subprime-related. In addition, such balance sheet amounts do
not reflect any netting of cash collateral against these positions.

 The [*] carrying value of U.S. subprime related securities held in the available for
sale investment portfolios of the Company’s bank subsidiaries as of August 31, 2007 is reflected in the August 31, 2007 Other investments balance of $12.7 billion on the Company’s statement of financial condition.

 Prior response G – Delinquencies in retained securitized subprime residential mortgages: The Company’s response on this matter discussed
a statistical measure. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial condition.

 Prior response H
– Write-offs / impairments related to retained interests in subprime residential mortgages: The Company’s response on this matter discussed income statement measures. Accordingly, there are no amounts in this prior response to
reconcile to the statement of financial condition at August 31, 2007.

 Prior response I – Involvement with special purpose entities: The
Company’s response on this matter was a qualitative discussion of its involvement with special purpose entities. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial condition at August 31,
2007.

 4

 Prior response J – Potential repurchase commitments you have regarding subprime residential mortgages: The
Company’s response on this matter discussed the nature of its repurchase commitment obligations and did not quantify any balance sheet measures. Accordingly, there are no amounts in this prior response to reconcile to the statement of financial
condition at August 31, 2007.

 Prior response K – Loans to, commitments in, or investments in subprime lenders: The [*] in loans made to
U.S. subprime lenders under warehouse lending agreements as of August 31, 2007 is reflected in the August 31, 2007 Securities purchased under agreements to resell balance of $176.9 billion on the Company’s statement of
financial condition. Such lending arrangements are generally executed under master repurchase agreements.

 The unrealized loss associated with derivatives
entered into with a third party conduit that provides warehouse financing to subprime lenders, which is presented in Financial instruments sold, not yet purchased, was immaterial as of August 31, 2007.

 There were no subprime mortgage loan purchase commitments as of August 31, 2007. Accordingly, there is no unrealized gain or loss amount related to subprime
mortgage loan purchase commitments to reconcile to the statement of financial condition as of August 31, 2007.

•

 We note your risk management policies discussed in your response and your disclosure in Item 7A of your Form 10-K for 2006. Please ensure that your
Item 7A disclosures in future filings include a more detailed discussion of your origination policies, specifically any changes in eligibility requirements, and discusses in detail disposition strategies and how you monitor your net exposure
when evaluating risks associated with your trading and other portfolios.

 Response C:

 The Company continually evaluates the appropriateness and completeness of its Item 7A disclosures, and modifies and enhances these disclosures as appropriate. In
making such an evaluation, the Company considers the materiality of its various businesses, and the extent to which the Company’s various businesses contribute to the Company’s risk profile. As discussed below in Response E, the
Company’s main U.S. subprime exposures are the result of an unfavorable subprime mortgage-related trading strategy, and not as the result of whole loan positions generated by origination activity.

 [*]

 5

 [*]

 With respect to the
monitoring of net exposure, the Company has noted on page 86 of its 2007 Form 10-K, as detailed in Attachment A, that net exposure is one key risk measure the Company employs to standardize the aggregation of market risk exposures across cash and
derivative products.

 The Company has added a discussion of the 2007 credit market events to its 7A disclosures on page 85 of the 2007 Form 10-K. Those
discussions, which are included in Attachment A, note that enhancements have been made to the Company’s stress test and scenario analysis as a result of these events.

•

 We note that your response has not addressed the possibility that your subprime lending business will have a material adverse impact on your condition, results
of operations or liquidity. We caution you to continue to evaluate, both on a quantitative and qualitative basis, the appropriate amount of transparent disclosures you provide regarding your subprime lending so that readers are informed about your
level of involvement in these activities.

 Response D:

 The Company has significantly expanded the discussion of its U.S. subprime related activities and exposures in its 2007 Form 10-K. The primary discussion of these activities and exposures is contained in the section
titled “Impact of Credit Market Events” which starts on page 51 and ends on page 55 of the 2007 Form 10-K and is included in Attachment B. The Company continually assesses the appropriateness and completeness of its disclosures.
Accordingly, continued disclosures of this nature will be evaluated and the appropriate amount of disclosures will be made.

•

 We note in your Form 10-Q for August 31, 2007 you disclose in the MD&A that the US economy was experiencing signs of slowing during the third quarter
2007, primarily reflecting difficult conditions in the residential real estate and credit markets and that concerns about the impact of subprime loans caused the broader credit markets to deteriorate considerably over the quarter. In light of the
economic slowing in the residential real estate and credit markets and your impairment of trading portfolio that included real estate securities, tell us how you determined that there were no decreases in fair value of your US subprime related
balance sheet exposures during the third quarter 2007.

 6

 Response E

 The
Company believes that the carrying value of its subprime balance sheet exposures as of August 31, 2007 reflected the fair value of those exposures based on the then current market conditions, and that the losses recorded in the fourth quarter
of 2007 reflected changes in market conditions that occurred during the fourth quarter.

 The Company’s third quarter 2007 results did reflect losses
on certain of its subprime positions. Those losses, which were offset by gains on other U.S. subprime positions, significantly lowered revenues in the third quarter of 2007. This decline in credit product revenues was discussed on page 58 of the
Company’s Form 10-Q for the fiscal quarter ended August 31, 2007 (“third quarter Form 10-Q”) as follows:

 Credit product
revenues decreased 54%, primarily due to lower revenues from corporate credit and structured products. Spread widening, lower liquidity and higher volatility resulted in lower origination, securitization, and trading results across most credit
product groups and also affected the performance of the Company’s hedging strategies.

 The significant losses sustained by the Company in the fourth
quarter resulted from an unfavorable subprime mortgage-related trading strategy and the continued deterioration and lack of market liquidity for subprime and other mortgage-related instruments. The valuation methodology used for these instruments
incorporated a variety of inputs, including prices observed from the execution of a limited number of trades in the marketplace; ABX and similar indices that track the performance of a series of credit default swaps based on subprime mortgages; and
other market information, including data on remittances received and updated cumulative loss data on the underlying mortgages.

 The Company’s primary
exposure to the U.S. subprime market is associated with “super senior” credit default swaps that reference synthetic asset backed security (“ABS”

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

         January 3, 2008  Room 7010  David H. Sidwell Executive Vice President and Chief Financial Officer Morgan Stanley 1585 Broadway New York, NY 10036

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended November 30, 2006
Form 10-Q for the Fiscal Quarter Ended February 28, 2007
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed your response letter  dated November 27, 2007 and have the
following comment.  Where indicated, we thi nk you should revise your document.  If you
disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary.  Please be as detailed as necessary in your explanation.  In our
comment, we may ask you to provide us with  information so we may better understand
your disclosure.  After reviewing this inform ation, we may raise additional comments.

Form 10-K for the year ended November 30, 2006

Note 4. Collateralized and Securi tization Transactions, page 126

1. We have reviewed your response to prior comment 1 in our letter dated August
30, 2007 and appreciate the detailed info rmation you have provided.   Please
address the following comments with regards to your subprime lending:
ƒ Please reconcile and explain the di fference between the amount of your
subprime residential mortgage loans at August 31, 2007 that is  included in your
response C to prior comment 1 to the $12.3 billion amount presented in your
subprime analysis for 2007 that was included in your response and also
included in your Form 8-K filed Novemb er 7, 2007. For example, explain how
your trading positions in subprime related securities and derivatives are reflected in this table;

David H. Sidwell
Morgan Stanley
January 3, 2008 Page 2
ƒ For each amount quantified in responses C – K, please reconcile these amounts
to amounts in your statement of fina ncial position at August 31, 2007 and
provide explanations for any material differences;
ƒ We note your risk management policies discussed in your response and your
disclosure in Item 7A of  your Form 10-K for 2006.  Please ensure that your
Item 7A disclosures in future filings in clude a more detailed discussion of your
origination policies, specifically any ch anges in eligibility requirements, and
discusses in detail disposition stra tegies and how you monitor your net
exposure when evaluating risks associ ated with your trading and other
portfolios;
ƒ We note that your response has not addre ssed the possibility that your subprime
lending business will have a material adverse impact on your financial condition, results of operations or liqu idity.  We caution you to continue to
evaluate, both on a quantitative and qualitat ive basis, the appr opriate amount of
transparent disclosures you provide rega rding your subprime lending so that
readers are informed about your level of  involvement in these activities; and
ƒ We note in your Form 10-Q for August  31, 2007 you disclose in MD&A that
the US economy was experiencing signs of slowing during the third quarter
2007, primarily reflecting difficult conditions in the residential real estate and
credit markets and that concerns about the impact of subprime loans caused the
broader credit markets to deteriorate considerable over th e course of the
quarter.  In light of the economic slowi ng in the residentia l real estate and
credit markets and your impairment of trad ing portfolio that included real estate
securities, tell us how you de termined that there were no decreases in fair value
of your US subprime related balance sh eet exposures during the third quarter
2007;
ƒ Please provide us with a comprehensive an alysis as to how Saxon Capital, Inc.
may impact your company. Tell us what disclosures you intend to include in future filings in this regard.
ƒ If material, you should consider discu ssing your revenues from  involvement in
subprime loans and any expected impact due to the current market conditions.

Further, we urge you to carefully consider  how your current involvement with subprime
loans may impact your companies, financial position, results of operations and liquidity.
The impacts considered should encompass, w hole loan exposures, trading investments,
derivatives, available for sale securities, inve stment in, and by, subsidiaries and any and
all exposures to off-balance sheet entities and unrelated entities.  Y our disclosures should
be presented in such a way that readers can  fully understand the scope  or your direct and
indirect involvement, and potential expos ures you have regarding such loans and
financial instruments.

David H. Sidwell
Morgan Stanley January 3, 2008 Page 3

 You may contact Melissa Rocha at ( 202) 551-3854 or me at (202) 551-3689 if
you have questions regarding comments on the financial statements and related matters.

Sincerely,   John Hartz Senior Assistant Chief Accountant

CORRESP
1
filename1.htm

SEC Response Letter

 1585 Broadway

 New York, New York
10036

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.

 November 27, 2007

 By U.S. Mail & Facsimile to 202-772-9368

 Mr. John Hartz

 Senior Assistant Chief 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 the Fiscal Year Ended November 30, 2006

Form 10-Q for the Fiscal Quarter Ended February 28, 2007

File No. 001-11758

 Dear Mr. Hartz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of August 30, 2007, concerning its Annual Report on Form 10-K for the fiscal year ended November 30, 2006 (“Form 10-K”) and Quarterly Report
on Form 10-Q for the fiscal quarter ended February 28, 2007 (“Form 10-Q”). For your convenience, we have restated your comments below.

 As
you are aware, recent events in the subprime market segment have impacted the Company. As a result of these recent market events, the Company filed two Current Reports on Form 8-K during the month of November 2007 related to its subprime positions.
Accordingly, the Company has responded to this request by providing the data included in those Form 8-K filings, which is as of October 31, 2007, as that is the most recent data that is readily available for certain of the information
requested. However, for certain other data, information is provided as of August 31, 2007, as that is the most recent date for which information is readily available at the level of disaggregation requested.

 In addition, we note that the Company has quantified the carrying values and/or net exposures related to its positions in subprime related securities, derivatives, and
whole

loans as of October 31, 2007. Given the dynamic and evolving nature of market conditions, it is likely that the amounts quantified as of
October 31, 2007 have changed in the intervening period. Additionally, the Company will consider supplemental disclosures in the preparation of its Annual Report on Form 10-K for the fiscal year ended November 30, 2007 given recent market
events.

 Finally, the Company would like to preface its response by noting that Saxon Capital, Inc. (“Saxon”) was acquired on December 4,
2006. Accordingly, the data provided in this response for periods prior to December 4, 2006 excludes balances related to Saxon.

 Form 10-K for
the year ended November 30, 2006

 Note 4. Collateralized and Securitization Transactions, page 126

1.
We note from the disclosures on page 4, 127 and 162 that you originate, trade, make markets and take proprietary positions in, and act as principal with respect to, mortgage
related and real estate loan products. We further note on page 4 that in December 2006 you acquired Saxon Capital, Inc., a servicer and originator of subprime residential mortgage loans. We also note that you provide financing to customers for
residential real estate loan products. It is unclear from your document the exposure you have to subprime loans.

 Although there may be differing definitions of subprime residential mortgage loans, they are sometimes recognized to be loans that have one or more of the following features:

-
A rate above prime to borrowers who do not qualify for prime rate loans;

-
Borrowers with low credit ratings (FICO scores);

-
Interest-only or negative amortizing loans;

-
Unconventionally high initial loan-to-value ratios;

-
Low initial payments based on a fixed introductory rate that expires after a short initial period then adjusts to a variable index rate plus a margin for the remaining term of
the loan;

-
Borrowers with less than conventional documentation of their income and/or net assets;

-
Very high or no limits on how much the payment amount or the interest rate may increase at reset periods, potentially causing a substantial increase in the monthly payment
amount, and/or;

-
Including substantial prepayment penalties and/or prepayment penalties that extend beyond the initial interest rate adjustment period.

 Based on your current public disclosures, it is possible that more clarity about your exposure to any subprime loans could be helpful. Regardless of
the materiality of your exposure, we respectfully request that you provide us with the supplemental information about your involvement in subprime loans.

 2

 Preface your response by how you specifically define your subprime loans in practice, if at all.
However, we ask that you consider the above definition, in general, as part of your response. In other words, we request that the information you provide be based, more or less, on the above definition. Where it does not, please provide specific
guidance. This request may be hard for you to provide on a timely basis. Please consider alternative information that may address the concern, at least in part, but which can be readily provided.

 Response A:

 The Company’s exposure to subprime activity is
almost entirely concentrated in the United States, through direct relationships with borrowers or otherwise. Therefore, the responses included herein are focused on the Company’s U.S. subprime exposure, whether that exposure is held by U.S. or
non-U.S. subsidiaries.

 The Company has adopted and implemented the Interagency Guidance on Subprime Lending as well as the Fannie Mae and Freddie Mac
(FNMA and FHLMC are collectively referred to as Government Sponsored Entities, or “GSEs”) Statements on Subprime Lending and Responsible Lending (collectively the “Subprime Guidance”). The Subprime Guidance generally defines a
subprime mortgage as a real property secured loan made to a borrower (or borrowers) with a diminished or impaired credit rating or with a limited credit history. A borrower’s credit history is reflected in their credit report and routinely
converted into a numerical credit score often referred to as a Fair Isaac Corporation (or “FICO”) score. Generally, a loan made to a borrower with a FICO score or other credit score below [*] has historically been considered subprime and
many loans made to borrowers above [*] may also be considered subprime if the loan exhibits other high risk factors (often referred to as risk layering). Examples of risk factors include loans where: (a) the borrower is at the maximum
loan-to-value (“LTV”) or combined LTV (“CLTV”) for the loan program (generally any LTV above 80% for a first lien or CLTV above 90% for a junior lien) would be considered a layered risk factor; (b) the loan has reduced or
limited income documentation; (c) the loan is at or near the maximum debt-to-income (“DTI”) ratio (generally the maximum DTI ratio for subprime loans is 50-55%) for the loan program; (d) the occupancy type for the loan is other
than the borrower’s primary residence. There are many other risk layering factors, including borrowers who have purchased multiple properties or have taken previous equity withdrawal (cash out) refinancings within the last 12-24 month period,
non-arm’s length purchase transactions and unsupported or high risk collateral properties, among others.

 For certain of the features that are listed
in question 1 above, we believe the feature, in isolation, would not result in a loan being classified as subprime. For example, we do not believe the fact that a loan has a prepayment penalty would necessarily result in that loan being classified
as subprime. However, the factors you have listed in your definition are layered risk factors the Company considers in conjunction with a borrower’s FICO score in addition to those discussed above that determine whether the loan would be
classified as subprime.

 3

 Pursuant to the Subprime Guidance, for loan applications taken after September 13, 2007, the GSEs will generally
consider mortgage loans with a credit score above 660 that have additional risk layering terms or features to fall within the definition of subprime. However, it should be noted that prior to September 2007, the Company utilized a
FICO score threshold of [*]. Thus, the data provided in this response includes loans with FICO scores above [*] only if the loan has one or more of the additional layered risk factors described above.

 Please provide us with a comprehensive analysis of your exposure to subprime residential loans. In particular:

-
Provide us with your risk management philosophy as it specifically relates to subprime loans. Please address:

•

 Your origination policies;

•

 The purchase, securitization and retained interests in loans;

•

 Investments in subprime mortgage-backed securities; and

•

 Loans to, commitments to, and investments in subprime lenders.

 Response B:

 The Company’s risk management policy and control structure is described in detail in
“Quantitative and Qualitative Disclosures about Market Risk – Risk Management” in Part II, Item 7A of the Form 10-K. The risk management philosophy and procedures related to subprime loans are consistent with those general
philosophies and procedures. In response to your request, we have elaborated on the specific policies and procedures related to subprime loans. However, we believe that the discussion in Item 7A, beginning on page 93 of the Form 10-K provides a
comprehensive description of the Company’s risk management philosophy and procedures, and this response should be read in conjunction with that disclosure.

 Origination policies

 The philosophy of the Company’s origination process is to ensure that loans originated by the Company meet
acceptable and prescribed eligibility and underwriting criteria. Towards that end, a loan evaluation process is adopted within a framework of credit underwriting policies and collateral valuation. The Company’s underwriting policy is designed
to ensure that all borrowers pass an assessment of capacity and willingness to pay, which includes an analysis of applicable industry standard credit scoring models (e.g., FICO scores), debt ratios and reserves of the borrower.
Loan-to-collateral value ratios are determined based on independent third-party property appraisal/valuations, and security lien position is established through title/ownership reports. As part of the mortgage lending business strategy, almost all
loans are sold in the secondary market through securitizations and whole loan sales.

 4

 The purchase, securitization and retained interests in loans; and investments in subprime mortgage-backed securities

 All residential mortgages, whether purchased or originated, are carried at fair value. The most common disposition strategy utilized by the Company for
such positions is securitization. The Company typically retains certain of the lower-rated securities of such securitizations, often referred to as residual tranche securities.

 In addition to whole loan positions and residual interests in securitizations sponsored by the Company, the Company invests in subprime mortgage-backed securities or collateralized debt obligation (“CDOs”)
securities that are in whole or in part backed by subprime loans or subprime backed securities. In addition, the Company enters into derivative transactions whose value is based in whole or in part on subprime mortgages or subprime-backed
securities. In addition, the Company underwrites securities issued by CDOs.

 All such positions, whether whole loans, investments in securities, or
derivatives, are reported daily to senior management via the Company’s daily risk aggregation and reporting system. These reports are distributed to certain members of the respective Business Units (“BUs”), Market Risk Department
(“MRD”), Credit Risk Department and Financial Control Group.

 Position risk limits have been established and are monitored at the trading desk
and BU level. Limits are discussed with members of the BU, MRD and management, to ensure appropriateness. When the limits are approved, they are implemented in the Company’s daily risk reporting process. The limit structure is reviewed
periodically with members of the BU, MRD and management.

 Trading desks employ various risk hedging and risk transfer techniques. Interest rate risks are
generally hedged. Spread risk and other risks arising from subprime product are hedged or traded as appropriate. Products utilized to execute hedging strategies for subprime positions include interest rate products such as futures and swaps, and
credit instruments such as credit default swaps and actively traded indices such as the ABX.

 The Company utilizes the statistical technique known as
value-at-risk (“VaR”) as one of the tools used to measure, monitor and review the market risk exposures to its trading and other portfolios. The MRD calculates and distributes daily VaR-based risk measures to various levels of management.
The MRD independently reviews the Company’s trading and other portfolios on a regular basis from a market risk perspective utilizing VaR and other quantitative and qualitative risk measures and analyses. The Company’s trading and other
businesses and the MRD also use, as appropriate, measures such as sensitivity to changes in interest rates, prices, implied volatilities and time decay to monitor and report market risk exposures. Stress testing, which measures the impact on the
value of existing portfolios of specified changes in market factors for certain products, is performed

 5

periodically and is reviewed by trading division risk managers, desk risk managers and the MRD. The MRD also conducts macro scenario analyses, which estimate
the Company’s revenue sensitivity to a set of specific, predefined market and geopolitical events. In addition, the Company also monitors its net exposure when evaluating risks associated with its trading and other portfolios. Net exposure is
defined broadly as the potential loss (or gain) to the Company in a 100 percent default scenario, assuming zero recovery.

 Loans to, commitments to, and
investments in subprime lenders

 The Company provides financing to mortgage originators collateralized by residential mortgage loans. Under these
arrangements, the Company requires originators to provide collateral in excess of the monies advanced, and values the collateral on a routine basis to ensure that the value of the collateral exceeds the value of the monies advanced in accordance
with the collateral agreements. Due diligence is performed prior to initiating a warehouse loan commitment facility, and this due diligence includes a review of the counterparty’s credit underwriting, origination, operations, quality control
and servicing functions.

-
Quantify your portfolio of subprime residential mortgages. If practicable, please breakout the portfolio to show the underlying reason for subprime definition, in other words,
subject to payment increase, high LTV ratio, interest only, negative amortizing, and so on.

 Response C:

 As discussed, the Company applies a “risk layering” approach to classifying its mortgage portfolio. Under that approach, mortgage loans with a FICO score below
a certain threshold are automatically considered subprime, while mortgage loans above that threshold are considered subprime if one or more high risk factors are present. While the Company recently has revised its definition of subprime to include
all mortgage loans with FICO scores lower than [*] as subprime, the information we have supplied is stratified based on the previously used definition, which considered a loan above [*] to be subprime only if additional risk factors were present.
The Company’s portfolio of subprime residential mortgage loans is carried at fair value. [*]:

 [*]

 6

 As discussed, the Company utilizes a risk layering approach in determining the subprime classification of a loan.
Accordingly, it is likely that a loan may be considered subprime because

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

        August 30, 2007

Room 7010

David H. Sidwell
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036

Re: Morgan Stanley
 Form 10-K for Fiscal Year Ended November 30, 2006
Form 10-Q for the Fiscal Quarter Ended February 28, 2007
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed the above referenced filing and have the following comments.
Please note that we have limited our review to only your financial statements and related
disclosures and do not intend to expand our re view to other portions of your document. We
may ask you to provide us with supplemental information so we may better understand your disclosure.  Please be as detailed as n ecessary in your explanation.  After reviewing
this information, we may raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Form 10-K for the year ended November 30, 2006

Note 4. Collateralized and Securi tization Transactions, page 126

1. We note from the disclosures on page 4, 127 and 162 that you originate, trade,
make markets and take proprietary positions in, and acts as principal with respect
to, mortgage related and real estate loan products.  We further note on page 4 that in December 2006 you acquired Saxon Capital, Inc., a servicer and originator of
subprime residential mortgage loans.  We  also note that you provide financing to

David H. Sidwell
Morgan Stanley
August 30, 2007 Page 2
customers for residential real estate loan products. It is unclear from your
document the exposure you have to subprime loans.

Although there may be differing definitions of subprime residential mortgage loans, they are sometimes recognized to be loans that have one or more of the following features:

- A rate above prime to borrowers who do not qualify for prime rate loans;
- Borrowers with low credit ratings (FICO scores);
- Interest-only or negati ve amortizing loans;
- Unconventionally high initial loan-to-value ratios;
- Low initial payments based on a fixed introductory rate that expires after a short initial period then adjusts to a variable index rate plus a margin
for the remaining term of the loan;
- Borrowers with less than conventio nal documentation of their income
and/or net assets;
- Very high or no limits on how much the payment amount or the interest rate may increase at reset periods , potentially causi ng a substantial
increase in the monthly payment amount, and/or;
- Including substantial prepayment pena lties and/or prepayment penalties
that extend beyond the initial interest rate adjustment period.

Based on your current public disclosures, it  is possible that more clarity about
your exposure to any subprime loans coul d be helpful. Regardless of the
materiality of your exposure, we respect fully request that you provide us with
supplemental information about your involvement in sub-prime loans.

Preface your response by how you specifica lly define your subprime loans in
practice, if at all. However, we ask that you consider the above definition, in
general, as part of your response. In other words, we request that the information you provide be based, more or less, on the above definition. Where it does not,
please provide specific guidance. This re quest may be hard for you to provide on
a timely basis. Please consider altern ative information that may address the
concern, at least in part, but which can be readily provided.

Please provide us with a comprehensive analysis of your exposure to subprime
residential loans.   In particular:

- Provide us with your risk manage ment philosophy as it specifically
relates to subprime loans. Please address:

ƒ Your origination policies;
ƒ The purchase, securitization and retained interests in loans;
ƒ Investments in subprime mortgage-backed securities and;

David H. Sidwell
Morgan Stanley
August 30, 2007 Page 3
ƒ Loans to, commitments to, and investments in subprime lenders.

- Quantify your portfolio of subprime re sidential mortgages. If practicable,
please breakout the portfolio to show the underlying reason for subprime definition, in other words, subject to payment increase, high LTV ratio,
interest only, negativ e amortizing, and so on.

- Quantify the following regarding subprime residential mortgages. Explain how you define each category;

ƒ Non-performing loans;
ƒ Non-accrual loans;
ƒ The allowance for loan losses, and;
ƒ The most recent provision for loan losses.

- Quantify the principal amount and natu re of any retained securitized
interests in subprime residential mortgages.

- Quantify your investments in a ny securities backed by subprime
mortgages.

- Quantify the current delinquencies in  retained securitized subprime
residential mortgages.

- Quantify any write-offs/impairments related to retained interests in subprime residential mortgages.

- Please address all involvement with sp ecial purpose entities and variable
interest entities and quantify the subprime exposure related to such entities, regardless of whether they ar e consolidated for the purposes of
generally accepted accounting principles.

- Quantify and describe any and all po tential repurchase commitments you
have regarding subprime residential mortgages.

- Quantify and describe any loans to, commitments in, or investments in
subprime lenders. Describe any othe r potential exposur es you may be
subject to, such as repurchase comm itments related to the receipt of
assets in bankruptcy, for example.

- Quantify your revenues from involvement in subprime loans. Break out such revenues based on fees, interest earned, servicing rights and other sources.

David H. Sidwell
Morgan Stanley
August 30, 2007 Page 4

Where we have asked you to quantify amounts as of a point in time, please do so as of the end of your last fu ll fiscal year and as of the most recent date practicable.
Where we have asked you to quantify am ounts for a period, please provide this
for the last three full fiscal years and a ny more recent period if practicable. If you
believe that you have provided any of the information requested in public filings, please direct us to such disclosures.

The above list is not intended to be a ll encompassing. To the extent that you are
aware of other asset quality or performa nce information, or other factors that
provide material information about your involvement with subprime residential
mortgage loans, please provide  that information as well.

If you believe that a material adverse im pact on your financial condition, results
of operations or liquidity, resulting from your involveme nt in subprime lending, is
remote, please explain. If so, tell us what  consideration you may give to a more
transparent disclosure about this to inform readers of your level of involvement.

If you believe that a material adverse im pact resulting from this exposure is
reasonably possible, tell us what disclosu res you may consider in order to provide
a clearer understandi ng of this exposure.

Form 10-Q for the Fiscal Quarter Ended February 28, 2007

Note 18. Fair Value Disclosures, page 24

2. We note your table of assets and liabilitie s measured at fair value on a recurring
basis as of February 28, 2007 as required by paragraph 32 of SFAS 157.  In future filings, please reconcile the items included in this table to your balance sheet and
ensure that you have provided all the re quired disclosures of paragraph 18 of
SFAS 159.

3. We note your disclosure on page 38 regarding your assets and lia bilities measured
at fair value on a non-recurring basis.  Your current disclosure refers the reader to
notes 2 and 16 for further information, however, these notes and your note 18 do not appear to provide the information required in paragraph 33 of SFAS 157.
Please revise future filings to disclose this information or tell us why you believe
this information is not necessary.

4. If material in future filings, include th e disclosures pursuant to paragraph 18f of
SFAS 159, for investments that would otherw ise be required to be accounted for
under the equity method, if you had not  chosen the fair value option.

David H. Sidwell
Morgan Stanley
August 30, 2007 Page 5
 As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Please submit all correspondence and supplemental materials on EDGAR as required by Rule 101 of Regulation S-T.  Detailed
cover letters greatly facilitate  our review.  Please understand that we may have additional
comments after reviewing your responses to our comments.

  We urge all persons who are responsi ble for the accuracy an d adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a 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

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

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

 You may contact Melissa Rocha at ( 202) 551-3854 or me at (202) 551-3689 if
you have questions regarding comments on the financial statements and related matters.

Sincerely,

John Hartz
Senior Assistant Chief Accountant

Mail Stop 4561

June 6, 2006

By U.S. Mail and facsimile to (212) 404-9707.

David H. Sidwell
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036

Re: Morgan Stanley
Form 10-K for the Fiscal Year Ended November 30, 2005
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should revise your doc ument in response to these comments in
future filings.  If you disagree, we will consider your explanation as to why our
comments are inapplicable or a revision is  unnecessary.  Please be as detailed as
necessary in your explanation.  In our comment, we may ask you to provide us with
supplemental information so we may better understand your disclosure.  After reviewing
this information, we may or may not raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Consolidated Financial Statements

Consolidated Statements of Income, page 109

1. We note that you do not separately present your costs and expenses applicable to
services on your Statements of Income.  We also not e that you report revenues
inclusive of interest and dividend income, interest e xpense and the provision for
loan losses and that you do not separa tely present operating and non-operating
income and expenses.  Please tell us:

David H. Sidwell
Morgan Stanley
June 6, 2006 Page 2

• Whether you track costs related to each of your separately presented
revenue line items;

• Your basis for characterizing interest and dividend income, interest expense and provision for loan losses as “Revenues”; and

• Your basis for not separately presenting operating and non-operating income and expenses.

Refer to Rule 5-01 and 5-03 of Regulation S-X.

Consolidated Statements of Cash Flows, page 111

2. We note that you have classified cash flows from sales of consumer loans as investing cash flows. Please tell us how you considered the guidance in paragraph
9 of SFAS 102 in determini ng the appropriate classification of cash flows related
to the origination and sale of loans held for sale.

Note 2.  Summary of Significant Accounting Policies

Revenue Recognition – Merchant, Card member and Other Fees, page 114

3. Please tell us the basis for recording Me rchant, Cardmember and Other Fees net
of the cost of your cardmember reward programs.  Refer to EITF 99-19.

Financial Instruments Used for Trading and Investment, page 115

4. We note your supplemental response da ted February 1, 2006 regarding your
application of the AICPA Broker Dealer  Guide and your fair value accounting
policy.  In light of the EITF deliberati ons on this matter we will defer further
consideration of this issue at this time.  We may have comments at a future date.

Financial Instruments Used for Asset and Liability Management, page 116

5. Given your use of derivative instrument s for both trading and investment
purposes, as well as asset and liability mana gement, please revise future filings to
clearly disclose the specific de rivative instrument(s) used in each  of your hedging
strategies and the methods used to both  prospectively and retrospectively assess
hedge effectiveness. Provide the following information in your disclosures:

• Identify each type of asset or liability for which you employ hedging
strategies;

David H. Sidwell
Morgan Stanley
June 6, 2006 Page 3
• Identify the financial instruments,  including the types of derivatives,
which you use to manage each of these risks;

• Disclose the hedging classification fo r each derivative instrument; and

• Clearly describe the specific methods used to both prospectively and
retrospectively assess hedge e ffectiveness and measure hedge
ineffectiveness and disclose how often these tests are performed.

* * * * *

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.   Please furnish a cover letter that keys your response to
our comments, indicates your inte nt to include the requested revisions in future filings
and provides any requested supplemental info rmation.  Please understand that we may
have additional comments after review ing your responses to our comments.

 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing review ed by the staff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

 In connection with responding to our comments, please provide, in writing, a 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

‚ the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

David H. Sidwell
Morgan Stanley
June 6, 2006 Page 4
You may contact Rebekah M oore, Staff Accountant, at  (202) 551-3463 or me at
(202) 551-3426 if you have questions.

Sincerely,

Angela Connell
Senior Accountant

Mail Stop 4561

February 7, 2007

David H. Sidwell
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036

Re: Morgan Stanley
Form 10-K for the Fiscal Year Ended November 30, 2005
 File No. 001-11758

Dear Mr. Sidwell:

 We have completed our review of your  2005 Form 10-K and related filings and
have no further comments at this time.

Sincerely,

Kevin W. Vaughn,
Branch Chief

CORRESP
1
filename1.htm

Correspondence Letter

1585 Broadway

New York, New York 10036

 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.

 December 21, 2006

 Mr. Kevin W. Vaughn

 Branch Chief

 Division
of Corporation Finance

 Securities and Exchange Commission

 100
F Street, N.E.

 Washington, D.C. 20549

Re:
Form 10-K for the Fiscal Year Ended November 30, 2005

 File No. 001-11758

 Dear Mr. Vaughn:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of November 28, 2006 concerning its Form 10-K for the fiscal year ended November 30, 2005 (the “filing”). For your convenience, we have
restated your comments below.

 Consolidated Statements of Income, page 109

 Comment:

1.
We note your response to prior comments 1 and 2 of our letter dated August 28, 2006, including your proposed disclosures. We recognize that your presentation of the results of
operations is consistent with what appears to be an industry practice that has developed. We believe this industry practice conflicts with the guidance set forth in Article 5 of Regulation S-X. We will continue to consider what steps, if any, should
be taken to rectify the departure from Regulation S-X; however, we believe that disclosure of what, if anything, we decide to do is premature at this time. Based upon the representations you have provided to us regarding the undue burden to comply
with Regulation S-X, we do not object to your representation of the results of your operations at this time.

 Response:

 We appreciate your input on this matter.

 Consolidated Statements of Cash Flows, page 111

 Comment:

2.
We have reviewed your response to our previous comment 2. Paragraph 8(a) of SOP 01-6 states that receivables may be classified as held for investment only if management has
the intent and ability to hold the receivables for the foreseeable future or until maturity or payoff. Please tell us the following information:

•

You state that you randomly select credit card receivables for securitization purposes. Given your history of securitizations within this portfolio, and your reliance on these
securitizations for liquidity purposes, please tell us in detail how you determined that at origination, you were able to determine that you had the positive intent to hold any one particular credit card receivable to maturity.

•

You state in your response that you determine a desired level of funding by utilizing a mix of funding sources including securitizations and that you perform this analysis on a
quarterly basis. Please tell us in detail how you integrated your projections regarding future funding requirements into your judgment regarding your intent and ability to hold receivables for the foreseeable future.

 Response:

 As mentioned in our previous response letter dated
October 3, 2006, we consider our owned and securitized credit card loans together on a total “managed” basis for various purposes. This total managed portfolio consists of the following two parts:

(i)
Owned loans—Loans still owned by the Company that are reported on our balance sheet and funded by on-balance-sheet funding sources, and

(ii)
Securitized loans—Loans that have already been securitized, and so are not reported on our balance sheet and are funded by off-balance-sheet sources.

 The bulk of securitized loans (ranging from 88% to 94% for fiscal years 2003 – 2005) arise from originations on accounts that are
already part of the securitized group and therefore do not involve the sale of owned loans from our balance sheet.

 In contrast, only a small portion of
loans is transferred from owned loans on our balance sheet to the securitization trusts. This is demonstrated in the attached table. The top section of the table shows the quarterly change in the level of securitized loans by starting with the
beginning balance of outstanding Asset-Backed Securities (ABS) issued by our primary securitization trust in the top line and then showing the net securitization issuances by the trust for each quarter, which are equal to the total issuances less
maturities during the quarter. In the quarters with a positive net securitization issuance

 2

 amount, that amount represents the balance of loans transferred from owned loans into the securitization trust. In the
middle and bottom sections, the percentage of net issuances to loan originations from the prior quarter and to the total owned loan balance is shown.

 The
table shows that, on average, the amount of owned loans sold each quarter into the securitization trust is insignificant in relation to owned loans held at the end of the prior quarter and in relation to originations on owned loans in the prior
quarter. In fact, in many quarters there was no need to sell any owned loans from our balance sheet into the securitization trust because the ABS issued by this trust were supported entirely through originations related to the securitized loans.

 We believe that the determination of the appropriate balance sheet classification of loans should be based on management’s intentions and
expectations for the loans in existence at the balance sheet date. The relative infrequency of sales of owned loans into the securitization trust coupled with the short average life of the credit card loans (approximately 6 months on average) means
that loans existing at any balance sheet date may be paid off and replaced with new originations before an actual sale of the loans into the trust occurs. This supports our opinion that it is probable that loans currently on our balance sheet will
not be sold and fulfills the criterion in paragraph 8(a) of AICPA Statement of Position 01-6 (“SOP 01-6”), which states that loans receivable are classified as “held for investment” to the extent that “management has the
intent and ability to hold for the foreseeable future or until maturity or payoff.”

 We further note that an analysis is performed each quarter to
determine whether a portion of the owned loan balance needs to be subsequently reclassified as held-for-sale. The issuances and maturities related to the securitized portfolio (see the top section of the attached table for reference) are forecasted
and the resulting amount of forecasted net securitization issuances, if any, is reclassified as held-for-sale. The loans classified as held-for-sale are carried at the lower of cost or fair value on our balance sheet, pursuant to SOP 01-6, paragraph
8(c). However, the cash flows associated with these loans are not reclassified as operating cash flows in our statement of cash flows, pursuant to paragraph 9 of SFAS 102, Statement of Cash Flows—Exemption of Certain Enterprises and
Classification of Cash Flows from Certain Securities Acquired for Resale (“SFAS-102”): “if loans were acquired as investments, cash receipts from sales of those loans shall be classified as investing cash inflows regardless of a
change in the purpose for holding those loans.”

 An analysis of our funding process and history further support our conclusion that the owned loans
are appropriately classified as held for investment. On an overall firmwide basis, credit card securitizations have constituted only a limited portion of our debt funding. For example, ABS as a percentage of the total of ABS, deposits and long-term
borrowings ranged from only 16% to 21% at fiscal years ended 2004 – 2005.

 3

[*] CONFIDENTIAL TREATMENT

      REQUESTED BY MORGAN STANLEY

 With specific regards to our asset and liability management process for credit card loans, we perform this
analysis on a total managed portfolio basis. Funding for the total managed portfolio is derived from a variety of sources that can be broadly grouped into four categories: asset-backed securities, bank deposits, unsecured debt and equity.

 Our targeted and actual mix between off- and on-balance sheet funding sources for the overall managed credit card portfolio has remained at a relatively
consistent level over time. The first line of the attached table demonstrates that the amount of ABS funding has remained relatively constant over the three-year period ended November 30, 2005. At the same time, we note that the securitized
portion of the portfolio is mostly “self-generating,” as mentioned earlier, in that the loans going into the trust mostly arise from accounts that have already been securitized. To the extent these trends continue, we believe our
expectation that loans owned at the balance sheet date will not be sold is appropriate.

 Further evidence of the fact that we do not intend or expect to
sell our on-balance-sheet loans to fund them is reflected in the fact that the average maturities of our other funding sources are significantly in excess of the life of the average credit card receivable. For example, at November 30, 2005, the
weighted average maturity of bank deposits and unsecured debt was [*] months whereas the average maturity for credit card loans was approximately 6 months. The maturity profile of the on-balance sheet liabilities is carefully managed so that we have
the ability to hold the owned loans to payoff in accordance with our intent, and are therefore not reliant on ABS to fund the on-balance-sheet loans.

 Taking all of the above into consideration, we believe that, at origination, we can appropriately assert our positive intent and ability to hold our credit card loans to payoff.

 Financial Instruments Used for Asset and Liability Management, page 116

 Comment:

3.
Please refer to our previous comment 4. For the fair value hedges for which you utilize the shortcut method of hedge accounting related to the Long Term Borrowings – Senior
Debt, please tell us the terms of both the call option embedded in your callable debt and the mirror image call option contained in your swap, including the maturity, strike price, and related notional amounts. Additionally, please tell us if the
premium for the call feature contained in the debt is paid via an adjustment over the life of the borrowing, or upon call of the debt.

 4

 Response:

 We have
one callable debt issuance included in our shortcut fair value hedge program related to long-term senior debt. The terms of the call option embedded in the debt and the terms of the mirror image call option contained in the related swap match and
are as follows:

 Debt Call Option

 Swap Call Option

Notional

JPY 5,000,000,000

JPY 5,000,000,000

Holder of option

Morgan Stanley

Counterparty

Inception of contract

3/2/2004

3/2/2004

Exercise dates

Any March 2 or September 2, starting 3/2/2011

Any March 2 or September 2, starting 3/2/2011

Maturity

3/2/2034

3/2/2034

Strike price

100% of contractual amounts due

100% of contractual amounts due

Premium

Paid through life of contract through interest terms

Paid through life of contract through interest terms

 Given that the terms of the debt and the swap match, we believe that we have met all the conditions of paragraph
68 of FAS 133 to assume no hedge ineffectiveness.

 *        *        *        *        *

 In connection with responding to your comments, we acknowledge that:

•

the Company is responsible for the adequacy and accuracy of the disclosure in the filing reviewed by the Staff;

•

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

•

the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

 5

 Please feel free to contact me at 212-761-4508 or Paul C. Wirth, our Controller and Principal Accounting Officer at
212-761-6686, if you would like further clarification or additional information.

Sincerely,

 /s/ David H. Sidwell

David H. Sidwell

Chief Financial Officer

cc:
Rebekah Moore, Securities & Exchange Commission

 Greg Weaver, Deloitte & Touche, LLP

 James V. Schnurr, Deloitte & Touche, LLP

 6

 [*] CONFIDENTIAL TREATMENT

                     REQUESTED BY MORGAN STANLEY

 TABLE 1

 [*]

Mail Stop 4561

November 28, 2006

By U.S. Mail and facsimile to (212) 404-9707.

David H. Sidwell
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036

Re: Morgan Stanley
Form 10-K for the Fiscal Year Ended November 30, 2005
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed your response filed October 4,, 2006 and have the following
additional comments.  Where i ndicated, we think you should revise your future filings in
response to these comments.  If you disagree, we will consider your explanation as to
why our comments are inapplicable or a revision  is unnecessary.  Please be as detailed as
necessary in your explanation.  In our comment, we may ask you to provide us with
supplemental information so we may better understand your disclosure.  After reviewing
this information, we may or may not raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Consolidated Financial Statements

Consolidated Statements of Income, page 109
1. We note your response to prior comments 1 and 2 of our lett er dated August 28,
2006, including your proposed disclosures.  We recognize that your presentation of the results of operations is consistent  with what appears to be an industry
practice that has developed.  We believe th is industry practice conflicts with the
guidance set forth in Article 5 of Regulati on S-X.  We will continue to consider
what steps, if any, should be taken to rectify the departure from Regulation S-X;

David H. Sidwell
Morgan Stanley
November 28, 2006 Page 2
however, we believe that disclosure of what, if anything, we decide to do is
premature at this time.  Based upon the representations you have provided to us
regarding the undue burden to comply with  Regulation S-X, we do not object to
your presentation of the results of  your operations at this time.

Consolidated Statements of Cash Flows, page 111
2. We have reviewed your response to our pr evious comment 2.  Paragraph 8(a) of
SOP 01-6 states that receivables may be  classified as held for investment only if
management has the intent and ability to  hold the receivables for the foreseeable
future or until maturity or payoff.   Please tell us the following information:

• You state that you randomly select credit card receiv ables for securitization
purposes.  Given your history of securi tizations within this portfolio, and
your reliance on these securitizations fo r liquidity purposes, please tell us in
detail how you determined that at origination , you were able to determine
that you had the positive intent to hold any one particular credit card receivable to maturity.

• You state in your response that you de termine a desired level of funding by
utilizing a mix of funding sources in cluding securitizations and that you
perform this analysis on a quarterly basi s.  Please tell us in detail how you
integrated your projections regarding future funding requirements into your
judgment regarding your intent and ab ility to hold receivables for the
foreseeable future.

Financial Instruments Used for Asset and Liability Management, page 116
3. Please refer to our previous comment 4.  For the fair value hedges for which you utilize the shortcut method of hedge  accounting related to the Long Term
Borrowings – Senior Debt, please tell  us the terms of both the call option
embedded in your callable debt and the mi rror image call option contained in your
swap, including the maturity, strike price, and related notional amounts.
Additionally, please tell us if the premium for the call feature contained in the
debt is paid via an adjustment over th e life of the borrowings , or upon call of the
debt.

* * * * *

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.   Please furnish a cover letter that keys your response to
our comments, indicates your inte nt to include the requested revisions in future filings
and provides any requested supplemental in formation.  Please provide us with your

David H. Sidwell
Morgan Stanley
November 28, 2006 Page 3
proposed disclosures.  Please understand that  we may have additional comments after
reviewing your responses to our comments.

You may contact Rebekah M oore, Staff Accountant, at  (202) 551-3463 or me at
(202) 551-3494 if you have questions.

Sincerely,

Kevin W. Vaughn
Branch Chief

Mail Stop 4561

August 28, 2006

By U.S. Mail and facsimile to (212) 404-9707.

David H. Sidwell
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, NY 10036

Re: Morgan Stanley
Form 10-K for the Fiscal Year Ended November 30, 2005
 File No. 001-11758

Dear Mr. Sidwell:

We have reviewed your response dated July 10, 2006 and have the following
additional comments.  Where i ndicated, we think you should revise your future filings in
response to these comments.  If you disagree, we will consider your explanation as to
why our comments are inapplicable or a revision  is unnecessary.  Please be as detailed as
necessary in your explanation.  In our comment, we may ask you to provide us with
supplemental information so we may better understand your disclosure.  After reviewing
this information, we may or may not raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects.  We
welcome any questions you may have about our comments or any other aspect of our review.  Feel free to call us at the telephone numbers listed at the end of this letter.

Consolidated Financial Statements

Consolidated Statements of Income, page 109
1. Please refer to our previous comment 1.  We understand that you present interest expense and provision for loan losses as a reduction of revenues by analogy to
Article 9 of Regulation S-X.  Rule 9-04 of Regulation S-X provides for the
presentation of net interest income and ne t interest income after provision for loan
losses. Non-interest revenues should be reported separately. Therefore, your
analogy to Article 9 does not support your current presentation.  Furthermore, it is

David H. Sidwell
Morgan Stanley
August 28, 2006 Page 2
also our understanding that your cons umer lending activities are primarily
concentrated in your Discover segment.  We believe that only the interest income,
interest expense and provisi on related to this segment may be presented on a net
basis by analogy to Article 9.  Please revise your Consolidated Statements of Income accordingly.
2. You have asserted that your income statement presentation is consistent with how you manage your business.  The guidance of Rule 5-01 of Regulation S-X indicates that Article 5 applies to registered broker dealers, except when filing their FOCUS reports.  Therefore, we believe that your financial statement
presentation should comply with Article 5-03, which requires a presentation of Cost of Revenues.  Please revise your Consolidated Statements of Income for
each period accordingly.  If you believe that providing this information would
involve undue cost and burden, please provide us with support for your determination.

Consolidated Statements of Cash Flows, page 111
3. Please refer to our previous comment 2.  You have stated that credit card receivables are originated w ith the intent to hold them for the foreseeable future
or until payoff.  It is unclear to us ho w you can make this assertion given that you
have historically securiti zed 50-60% of the credit card loans you originate.
Further, you state on page 80 of your Form 10-K that Discover Bank, the entity
funding the majority of the credit card receivables, accesses the asset backed
securities markets for a significant po rtion of its funding requirements and on
page 83 you disclose that your goal is to maximize funding through less credit
sensitive collateralized borrowings and a sset securitizations in order to reduce
reliance on unsecured financing.  Please advise us as follows:

• Clearly explain how you determined that your credit card rece ivables meet the
requirements of paragraph 8(a) of SOP 01-6 to be classified as held for
investment upon origination .

• Reconcile your history of securitizing  credit card rece ivables with the
condition in paragraph 8(a) of SOP 01-6  that at the time of origination you
have the intent and ability  to hold the receivables for the foreseeable future, or
until maturity or payoff.

• Please tell us whether you perform peri odic cash flow projections to assess
your liquidity needs.  If so, tell us wh ether during the last three fiscal years
these cash flow projections contemplated  the sale or securitization of credit
card receivables as a source of liquid ity and if so, to what extent.

David H. Sidwell
Morgan Stanley
August 28, 2006 Page 3
2.  Summary of Significant Accounting Policies

Financial Instruments Used for Asset and Liability Management, page 116
4. Please note our prio r comment 5.  For each hedging relationship for which you
utilize the shortcut method of hedge accoun ting, clearly describe to us the terms
of both the hedging instrument and the hedged item and tell us how you determined that the hedging relationshi p met the conditions of paragraph 68 of
SFAS 133 to qualify for such treatment. Clea rly describe all features contained in
the hedged items that are mirrored in the swaps.  In addition:

• Please tell us whether any of your hedged certificates of depo sits are brokered
deposits.  If so, please tell us how the broker commissions are paid and
whether they are factored into the terms of the swap.  If such fees were factored into the terms of the swap, please tell us how this impacts your
application of the shortcut met hod, specifically the requirements under
paragraph 68(b) of SFAS 133.

• Please tell us whether you are hedgin g your junior subordi nated debentures
and applying the shortcut method of assess ing hedge effectiveness.  If so, tell
us how you considered the interest defe rral feature in your junior subordinated
debentures in your assessment of hedge effectiveness.
5. In your response to comment 5 you indicate that you have designa ted interest rate
swaps as fair value hedges of your equity-linked notes.  On page 131 of your Form 10-K you disclose that your structur ed borrowings (whi ch include equity-
linked notes) are accounted for as having embedded derivatives.  Based on your
disclosures on page 131 it is  our understanding that the embedded derivatives in
such contracts have been bifurcated and accounted for at fair value.  Please
confirm our understanding of how you account for such embedded derivatives
and revise future filings to more clearly disclose your accounting policy.
6. We note in your response to our prio r comment 5 that you de-designated the
interest rate swaps associat ed with the aircraft leasi ng business in August of 2005.
We further note that you did not reclassify amounts reco rded in OCI into income
since the hedged transactions are still probable of occurr ing.  Please clarify to us
the terms of these hedging transactions.  Specifically describe the terms of both
the hedging instrument and the hedged item,  and clearly identify the risk being
hedged.  In addition please  describe the method by which amounts accumulated in
OCI will be reclassified into earnings.

* * * * *

David H. Sidwell
Morgan Stanley
August 28, 2006 Page 4

Please respond to these comments within  10 business days or tell us when you
will provide us with a response.   Please furnish a cover letter that keys your response to
our comments, indicates your inte nt to include the requested revisions in future filings
and provides any requested supplemental in formation.  Please provide us with your
proposed disclosures.  Please understand that  we may have additional comments after
reviewing your responses to our comments.

You may contact Rebekah M oore, Staff Accountant, at  (202) 551-3463 or me at
(202) 551-3426 if you have questions.

Sincerely,

Angela Connell
Senior Accountant

CORRESP
1
filename1.htm

Response Letter

 October 3, 2006

 Ms. Angela Connell

 Senior Accountant

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

Re:

Form 10-K for the Fiscal Year Ended November 30, 2005

File No. 001-11758

 Dear Ms. Connell:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of August 28, 2006 concerning its Form 10-K for the fiscal year ended November 30,
2005 (the “filing”). For your convenience, we have restated your comments below.

 Consolidated Statements of Income, page 109

Comment:

1.
Please refer to our previous comment 1. We understand that you present interest expense and provision for loan losses as a reduction of revenues by analogy to Article 9 of
Regulation S-X. Rule 9-04 of Regulations S-X provides for the presentation of net interest income and net interest income after provision for loan losses. Non-interest revenues should be reported separately. Therefore, your analogy to Article 9 does
not support your current presentation. Furthermore, it is also our understanding that your consumer lending activities are primarily concentrated in your Discover segment. We believe that only the interest income, interest expense and provision
related to this segment may be presented on a net basis by analogy to Article 9. Please revise your Consolidated Statement of income accordingly.

 Response:

 As discussed on page 45 of Management’s Discussion and Analysis in the Company’s 2005 Form 10-K, the Company’s
assessment of profitability is based on principal trading, interest and dividends taken together. This is consistent with how the Company manages the business, and as a result, this is how information is collected and organized in our systems. We
also believe this presentation results in more meaningful information for the readers of the financial statements because the generation of interest and dividend income and incurrence of interest expense is part of the Company’s core operations
for each of its businesses, and the Company does not believe it would be appropriate to present such items as non-operating activities.

 To give just one specific example of how these activities are viewed in the aggregate: In connection with our normal
corporate bond/debt trading business, our trading desks may hedge their corporate bond positions by entering into offsetting transactions in the securities and/or derivative markets in order to manage the various risks inherent in the corporate bond
positions (for example, interest rate risk and credit risk). Accordingly, when evaluating the performance of the trading business, management considers the profit and loss on the corporate bond positions (which takes the form of mark to market gains
and losses, as well as the related interest income and interest expense) and the profit and loss generated from the offsetting positions, taken together. The funding and portfolio management strategy is integral to the transaction. Therefore, we
believe that the interest income, interest expense, and trading profit or loss related to these transactions should be viewed together in order to evaluate the results of these integrated activities.

 With respect to the presentation of the provision for consumer loan losses, we confirm that it does apply only to our Discover segment. Similar to the reasoning above,
we believe that interest income, interest expense, and the provision for loan losses all form part of one integrated activity and therefore should be viewed together.

 As a result, we propose maintaining the current presentation whereby we include Interest Expense and the Provision for Loan Losses within Net revenues, and adding the following disclosure to footnote 1,
“Introduction & Basis of Presentation” of our consolidated financial statements:

 In connection with the delivery of the
various products and services to our clients, we manage our revenues and related expenses in the aggregate. As such, when assessing the performance of our businesses, we consider our principal trading, investment banking, commissions, and interest
income, along with the associated interest expense and provision for loan losses, as one integrated activity for each of our separate businesses.

 Comment:

2.
You have asserted that your income statement presentation is consistent with how you manage your business. The guidance of Rule 5-01 of Regulation S-X indicates that Article 5
applies to registered broker dealers, except when filing their FOCUS reports. Therefore, we believe that your financial statement presentation should comply with article 5-03, which requires a presentation Cost of Revenues. Please revise your
Consolidated Statements of Income for each period accordingly. If you believe that providing this information would involve undue cost and burden, please provide us with support for your determination.

 Response:

 We do not
present a Cost of Revenues, as required by Article 5-03, because of how the Company manages the business whereby we aggregate such information internally. The assessment of profitability for our businesses incorporates our principal trading,
investment banking, commissions, and net interest income, along with the associated expenses, as one integrated activity. The Company does not manage or capture the costs associated with the products and services sold or its general and
administrative costs by revenue line, in total or by product. Accordingly, pricing decisions regarding the Company’s products and services will take into account a number of items, including the overall client relationship, the availability in
the market for a particular product and/or service, competitors’ pricing, the risk we take on through a transaction, the overall profitability of the business, and the level of expenses incurred both directly and indirectly to support the
infrastructure associated with the products and services. We evaluate a business considering its revenues, total expenses, margin, and return on capital, among other measures.

 As a result, our systems are not designed in a manner that allows for presentation or aggregation of Cost of Revenues. Development and implementation of such systems and processes would entail an exhaustive overhaul
of both our back-office systems and our general ledger, along with training to support the changes. Since the information to be captured is not consistent with the way we manage our business, we would anticipate the need to maintain systems to
continue to capture information as we do today, resulting in the need and additional costs of maintaining separate records for internal management reporting versus external reporting. Additionally, there would be costs associated with reconciling
the dual sets of books and records. Performing this type of comprehensive systems overhaul would constitute a multi-year project that could easily amount to many tens of millions of dollars. As a result, we propose maintaining our present Income
Statement presentation and including the following disclosure within footnote 1, “Introduction & Basis of Presentation” of our consolidated financial statements (for convenience we have also included the additional disclosure
proposed in response to comment 1 above):

 The Company, through its subsidiaries and affiliates, provides a wide variety of products and
services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals.

 In connection with the delivery of the various products and services to our clients, we manage our revenues and related expenses in the aggregate. As such, when assessing the performance of our businesses, we consider our principal trading,
investment banking, commissions, and interest income, along with the associated interest expense and provision for loan losses, as one integrated activity for each of our separate businesses.

 The Company’s cost infrastructure supporting our businesses varies by activity. In some cases these costs are directly attributable to one line of
business, and in other cases such costs relate to multiple businesses. As such, when assessing the performance of our businesses, the Company does not consider these costs separately, but rather assesses performance in the aggregate along with the
related revenues.

 Therefore, the Company’s pricing considers various items, including the level of expenses incurred
directly and indirectly to support the cost infrastructure, the risk we take on through a transaction, the overall client relationship, and the availability in the market for a particular product and/or service. Accordingly, the Company does not
manage or capture the costs associated with the products and services sold or its general and administrative costs by revenue line, in total or by product.

 Consolidated Statements of Cash Flows, page 111

 Comment:

3.
Please refer to our previous comment 2. You have stated that credit card receivables are originated with the intent to hold them for the foreseeable future or until payoff. It is
unclear to us how you can make this assertion given that you have historically securitized 50-60% of the credit card loans you originate. Further, you state on page 80 of your Form 10-K that Discover Bank, the entity funding the majority of the
credit card receivables, accesses the asset backed securities markets for a significant portion of its funding requirements and on page 83 you disclose that your goal is to maximize funding through less credit sensitive collateralized borrowings and
asset securitizations in order to reduce reliance on unsecured financing. Please advise us as follows:

•

Clearly explain how you determined that your credit card receivables meet the requirements of paragraph 8(a) of SOP 01-6 to be classified as held for investment upon origination.

•

Reconcile your history of securitizing credit card receivables with the condition in paragraph 8(a) of SOP 01-6 that at the time of origination you have the intent and ability
to hold the receivables for the foreseeable future, or until maturity or payoff.

•

Please tell us whether you perform periodic cash flow projections to assess your liquidity needs. If so, tell us whether during the last three fiscal years these cash flow
projections contemplated the sale or securitization of credit card receivables as a source of liquidity and if so, to what extent.

 Response:

 By way of background, due to the revolving nature of credit card accounts, each new charge, cash advance or other use of a credit
card that results in the extension of credit to a cardholder results in the origination of a new loan receivable. Given the rate at which aggregate cardholders’ balances are repaid, the average loan receivable in the Company’s portfolio is
relatively short-lived, on the order of approximately six months.

 In addition, when a loan is transferred to a securitization trust, it must be chosen
from a pool of cardholder accounts that have been randomly selected from the portfolio. Random selection is necessary in order to both i) meet rating agencies’ expectations that the selected accounts are representative of the entire portfolio,
and ii) to avoid a claim of selecting only loans of the highest credit quality, which could be criticized as an unsafe or unsound banking practice.

 Our use of securitization is but one of a number of financing sources available to the Company, and our funding mix
changes based on our assessment of the alternative financing sources at any given time. Once we have determined the desired level of funding obtained through securitizations, we then consider the outstanding balance of loans transferred into the
trust, as well as expected account activity such as purchase and payment activity, to assess whether additional loans should be transferred to the trust. Frequently, we conclude that no additional loans should be transferred to the trust, and
accordingly, at that time none of our loans would be held for sale. If we determine that additional loans should be transferred to the trust in the future to support our desired asset-backed securitization funding, a random selection is made as
described above. Also, given the relatively short life of the average loan, it is quite possible that the loan will no longer be outstanding at the time a securitization is executed.

 In light of this, credit card receivables are classified as held for investment upon origination, as we believe that management has both the intent and ability to hold the loans for the foreseeable future or until
maturity or payoff. The cash flows associated with these loans are, accordingly, reported as cash flows from investing activities. A subsequent reclassification of any of these loans to the held for sale classification does not change the
original intent upon origination, and therefore the cash proceeds from the issuance of new beneficial interests supported by such loans are reported as investing cash inflows pursuant to SFAS 102.

 Regarding our previous statement concerning our practice of using asset securitization to fund 50% to 60% of credit card receivables, we would like to clarify that this
refers to the percentage of the total managed credit card portfolio, not to a percentage of the loans on our balance sheet. Total managed receivables is a term that refers to loans currently owned by Morgan Stanley and loans that were
transferred to securitization trust and appropriately derecognized from our balance sheet but that are still considered managed by Morgan Stanley, since we are the servicer for the securitization trust. Total managed receivables were approximately
$47 billion as of November 30, 2005, and consisted of $22.46 billion in owned loans and an additional $24.44 billion in securitized loans that had been appropriately derecognized from our balance sheet.

 With respect to our liquidity plans, the Company prepares detailed funding plans which are updated quarterly. The Company relies on a mix of asset securitization and
bank source funding such as deposits and other forms of unsecured financing. The funding provided by deposits and other unsecured financing is more than sufficient to support the balance of loans classified as held for investment, further supporting
the assertion that the Company has both the intent and ability to hold owned loans for the foreseeable future or until payoff.

 Financial Instruments Used for Asset and Liability Management, page 116

 Comment:

4.
Please note our prior comment 5. For each hedging relationship for which you utilize the shortcut method of hedge accounting, clearly describe to us the terms of both the hedging
instruments and the hedged item and tell us how you determined that the hedging relationship met the conditions of paragraph 68 of SFAS 133 to qualify for such treatment. Clearly describe all features contained in the hedged items that are mirrored
in the swaps. In addition:

•

Please tell us whether any of your hedged certificates of deposits are brokered deposits. If so, please tell us how the broker commissions are paid and whether they are factored
into the terms of the swap. If such fees were factored into the terms of the swap, please tell us how this impacts your application of the shortcut method, specifically the requirements under paragraph 68(b) of SFAS 133.

•

Please tell us whether you are hedging your junior subordinated debentures and applying the shortcut method of assessing hedge effectiveness. If so, tell us how you considered the
interest deferral feature in your junior subordinated debentures in your assessment of hedge effectiveness.

 Response:

 The following applies to all of the Company’s shortcut hedging programs, all of which are intended to hedge fair value:

•

The benchmark interest rate being hedged is the respective LIBOR curve.

•

The notional amount o

CORRESP
1
filename1.htm

SEC Correspondence Letter

 1585 Broadway

 New York, NY
10036

 July 10, 2006

 By U.S. Mail & Facsimile to 1-202-772-9208

 Ms. Angela Connell

 Senior Accountant

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Mail Stop 4561

 Washington, D.C. 20549

Re:
Form 10-K for the Fiscal Year Ended November 30, 2005
File No. 001-11758

 Dear Ms. Connell:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of June 6, 2006, concerning its Form 10-K for the fiscal year ended November 30, 2005 (the “filing”). For your convenience, we have restated your comments below.

 Comment: Consolidated Statements of Income, page 109

1.
We note that you do not separately present your costs and expenses applicable to services on your Statements of Income. We also note that you report revenues inclusive of interest
and dividend income, interest expense and the provision for loan losses and that you do not separately present operating and non-operating income and expenses. Please tell us:

•

Whether you track costs related to each of your separately presented revenue line items;

•

Your basis for characterizing interest and dividend income, interest expense and provision for loan losses as “Revenues”; and

•

Your basis for not separately presenting operating and non-operating income and expenses.

 Refer to Rule 5-01 and 5-03 of Regulation S-X.

 Response:

 In
formulating our income statement presentation, we noted that the purpose of Rule 5-03 is to indicate the various line items which, if applicable, should appear on the face of the income statement. In our business, interest and dividend income and
interest expense arise primarily from our trading and market making activities; customer margin lending and other consumer and commercial lending activities; and in connection with our securities borrowing and lending and repurchase and reverse
repurchase activities, which are entered into to facilitate our sales, trading, and brokerage operations. Therefore, unlike commercial and industrial companies, the generation of interest and dividend income and incurrence of interest expense is
integral to the Company’s core operations, and we believe it would not be meaningful to present such items as non-operating activities.

 Additionally,
in formulating our income statement presentation, we have looked to the income statement format provided within the AICPA Audit and Accounting Guide: Brokers and Dealers in Securities (“Broker-Dealer Guide”). We believe that this
approach provides the most transparent presentation for our business given the significance of our broker and dealer activities.

 Although we consider
ourselves to be predominantly a broker-dealer, certain aspects of the Company’s business, such as the consumer loan activities of our Discover segment, are analogous to that of a banking institution. Therefore, in preparing our financial
statements, we also considered the income statement presentation requirements set forth in Article 9 - Bank Holding Companies. Similar to the Broker-Dealer Guide, Article 9 does not require the reporting of operating and non-operating income and
expenses. In addition, it indicates that interest expense and the provision for loan losses should be included in net revenues. We have adopted this approach by analogy.

 Our income statement presentation is also consistent with how we manage our business as well as how investors and the analysts that actively follow our Company evaluate our performance. The nature of broker-dealer
operations is such that management views principal transactions revenues along with related interest and dividend income and expense as one interrelated activity. This view is consistent with our internal management reporting whereby
management’s assessment of the profitability of our sales and trading activities is based on looking at principal trading, interest and dividends in the aggregate and is consistent with how we present our operating results in the Management
Discussion and Analysis as included in our periodic filings. Our income statement presentation for interest and dividend income and interest expense is also consistent with how our peers present the results of their operations. Therefore, given the

 2

nature of our operations, we do not focus on, nor are our accounting and trading systems designed to, track the costs associated with separately presented
revenue line items.

 While we believe our current presentation is appropriate, we continually reevaluate our income statement presentation as changes to
our business lines occur.

 Comment: Consolidated Statements of Cash Flows, page 111

2.
We note that you have classified cash flows from sales of consumer loans as investing cash flows. Please tell us how you considered the guidance in paragraph 9 of SFAS 102 in
determining the appropriate classification of cash flows related to the origination and sale of loans held for sale.

 Response:

 Paragraph 9 of Statement of Financial Accounting Standards No. 102, Statement of Cash Flows - Exemption of Certain Enterprises and
Classification of Cash Flows from Certain Securities Acquired for Resale, an amendment of FASB Statement No. 95 (“SFAS No. 102”), states, in part, that:

 Cash receipts and cash payments resulting from acquisitions and sales of loans also shall be classified as operating cash flows if those loans are
acquired specifically for resale and are carried at market value or at the lower of cost or market value. Cash receipts resulting from sales of loans that were not specifically acquired for resale shall be classified as investing cash
inflows. That is, if loans were acquired as investments, cash receipts from sales of those loans shall be classified as investing cash inflows regardless of a change in the purpose for holding those loans. [Footnote omitted and
emphasis added.]

 Therefore, in determining the appropriate classification for cash receipts and payments on sales of consumer loans, we first consider
whether the loans were acquired or originated specifically for resale or whether they were acquired or originated with the intent to hold them for investment purposes.

 The balance of Consumer Loans reported in the Company’s Consolidated Statement of Financial Condition for the fiscal year ended November 30, 2005 and in prior periods consists almost entirely of credit card
accounts receivables. To determine the appropriate balance sheet classification of newly originated or acquired credit card receivables, the Company applies AICPA Statement of Position 01-6, Accounting by Certain Entities (Including Entities With
Trade Receivables) That Lend to or Finance the Activities of Others (“SOP 01-6”). In accordance with this guidance, credit card receivables that

 3

management has the intent and ability to hold for the foreseeable future or until payoff are reported in the balance sheet at outstanding principal adjusted
for any charge-offs, any deferred credit card receivable origination fees or costs, and an allowance for loan losses (i.e., not as held for sale).

 The Company opens credit card accounts with the intent to establish and maintain long-term lending relationships with its cardholders. Similarly, the credit card receivables arising from these account relationships are originated with the
intent to hold them for the foreseeable future. As part of its liquidity and funding practices, periodically management decides whether or not it has the ability to and should sell or securitize some of the existing credit card receivables to
support additional origination activity. If a sale of receivables is deemed practical and desirable, the Company transfers a portion of the credit card receivables, on a revolving basis, to trusts, which issue asset-backed securities
(“ABS”) that are registered with the Securities and Exchange Commission or are privately placed. Thus, the frequency and volume of the Company’s credit card securitization activity varies with the liquidity and funding needs of the
Company. The level of credit card securitization activity can also vary based upon changes in management’s overall funding strategy, trends in cardholder borrowing and repayment behavior and in response to changes in the market’s demand
for credit card receivable-backed securities.

 Upon determining that additional sales of credit card receivables should occur, management then reclassifies
a portion of its credit card receivables as held for sale. These receivables held for sale are carried at the lower of aggregate cost or fair value. As of November 30, 2005, approximately 51% of credit card receivables originated and managed by
the Company were securitized and supporting ABS held by third-party investors. Over the last six fiscal quarters as of May 31, 2006, the percentage of credit card receivables securitized and supporting ABS held by third-party investors has
ranged from 51% to 60%.

 Because these receivables are originated as investments, the net proceeds from sales of credit card receivables are classified as
cash flows from investing activities without regard to the change in the purpose for holding these receivables subsequent to their origination, pursuant to paragraph 9 of SFAS No. 102.

 The Company designates certain other loans (non-credit card receivables), which are originated specifically with the intent for resale, as held for sale upon
origination. The cash flows related to these loans are classified as operating activities pursuant to paragraph 9 of SFAS No. 102.

 4

 Comment: Note 2. Summary of Significant Accounting Policies - Revenue Recognition – Merchant, Cardmember and
Other Fees, page 114

3.
Please tell us the basis for recording Merchant, Cardmember and Other Fees net of the cost of your cardmember reward programs. Refer to EITF 99-19.

 Response:

 The
Company’s cardmember reward programs constitute point and other loyalty programs, which are excluded from the scope of EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, within paragraph 5 of the
guidance. Paragraph 5 states, in part:

 Also excluded from the scope of this Issue are those display issues that will be addressed in future
issues on accounting for vendor promotional activities, multiple-element revenue arrangements, and “point” and other loyalty programs. [Emphasis added.]

 The Company’s basis for recording Merchant, Cardmember and Other Fees net of the cost of these reward programs is the guidance in Emerging Issues Task Force (“EITF”) Issue No. 00-22, Accounting for
“Points” and Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products or Services to Be Delivered in the Future (“EITF 00-22”), as codified in EITF Issue No. 01-9, Accounting for
Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products) (“EITF 01-9”), which the Company adopted in fiscal 2001. Paragraph 30 of EITF 01-9 states, in part:

 The Task Force reached a consensus that the vendor should recognize the rebate or refund obligation as a reduction of revenue based on a systematic and
rational allocation of the cost of honoring rebates or refunds earned and claimed to each of the underlying revenue transactions that result in progress by the customer toward earning the rebate or refund.

 For the year ended November 30, 2005, almost all of the costs associated with the Company’s credit card loyalty programs relate to programs that offer a reward
to the cardholder in the form of cash. This relationship between credit card cash reward programs as compared to credit card non-cash reward programs is consistent across all periods.

 For the year ended November 30, 2005, the total expense incurred by the Company for its non-cash credit card reward programs was de minimis. Although authoritative guidance

 5

has not been finalized with respect to accounting for non-cash rewards under point and other loyalty programs, the Company has consistently analogized to
EITF 00-22’s guidance for cash rewards to support netting the cost of its non-cash rewards against related revenue. This approach is consistent with one of the views contemplated in the EITF’s discussions regarding EITF 00-22. The Company
believes that the substance of these two types of programs is the same and it is only the form of the reward that is different. The Company also believes its view is appropriate and it has consistently applied this accounting presentation.

 The Company disclosed its adoption of EITF 00-22 in its Form 10-K for the fiscal year ended November 30, 2001. The relevant portions of such
disclosures are excerpted below:

 Note 2. Summary of Significant Accounting Policies (Page 73)

 Cardmember Rewards. Cardmember rewards, primarily the Cashback Bonus® award, pursuant to which the Company pays Discover Classic Card, Discover Platinum Card and Morgan Stanley Card
cardmembers electing this feature a percentage of their purchase amounts ranging up to 1%, are based upon a cardmember’s annual level and type of purchases. The liability for cardmember rewards, included in other liabilities and accrued
expenses, is accrued at the time that qualified cardmember transactions occur and is calculated on an individual cardmember basis.

 In
fiscal 2001, the Company adopted Emerging Issues Task Force (“EITF”) Issue No. 00-22, “Accounting for ‘Points’ and Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products or Services to
Be Delivered in the Future.” Prior to the adoption of EITF Issue No. 00-22, the Company recorded its Cashback Bonus award program as a marketing and business development expense. In accordance with EITF Issue No. 00-22, such incentives are to
be considered a reduction in revenues and are recorded in merchant and cardmember fees. The Company’s consolidated statements of income for all periods presented have been restated to reflect this change.

 MD&A – Credit Services (Pages 39 and 40)

 Credit Services financial data reflect the Company’s fiscal 2001 adoption of Emerging Issues Task Force (“EITF”) Issue No. 00-22, “Accounting for ‘Points’ and Certain Other Time-Based or
Volume-Based Sales Incentive Offers, and Offers for

 6

Free Products or Services to Be Delivered in the Future.” Prior to the adoption of EITF Issue No. 00-22, the Company recorded its Cashback Bonus® award program as a marketing and business development
expense. In accordance with EITF Issue No. 00-22, such incentives are to be considered a reduction in revenues and are recorded in merchant and cardmember fees. Credit Services data for all periods presented have been restated to reflect this
change.

 Beginning in fiscal 2004, the Company modified its Form 10-K and Form 10-Q disclosures by removing the specific references to EITF 00-22. The
Company continued to disclose, however, that its cardmember rewards are recorded as a reduction of Merchant and cardmember fees. The referenced disclosures are as follows:

 Note 2. Summary of Significant Accounting Policies (Page 105)

 Merchant and Cardmember Fees. Merchant and cardmember fees include revenues…, net of cardmember rewards… The Company records its Cashback Bonus award program as a reduction of Merchant and cardmember
fees.

 MD&A – Credit Services (Page 47)

 Merchant and Cardmember Fees. Merchant and cardmember fees include revenues… net of cardmember rewards.

 Comment: Financial Instruments Used for Trading and Investments, page 115

4.
We note your supplemental response dated February 1, 2006 regarding your application of the AICPA Broker Dealer Audit Guide and your fair value accounting policy. In light of
the EITF deliberations on this matter we will defer further consideration of this issue at this time. We may have comments at a future date.

 Response:

 We appreciate the update on this matter.

 7

 Comment: Financial Instruments

CORRESP
1
filename1.htm

Correspondence Filing

 CONFIDENTIAL TREATMENT OF THIS LETTER

 HAS BEEN REQUESTED BY MORGAN STANLEY.

 SUCH CONFIDENTIAL INFORMATION HAS BEEN

 OMITTED, AS INDICATED BY [*] IN THE TEXT, AND

 SUBMITTED TO THE COMMISSION.

 1585 Broadway

 New York, NY 10036

 February 1,
2006

 Mr. Donald Walker

 Senior Assistant Chief Accountant

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

 Re: Form 10-K for the fiscal year ended November 30, 2004

 File No. 001-11758

 Dear Mr. Walker:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of January 23, 2006 concerning its Form 10-K for the fiscal year ended
November 30, 2004 (the “filing”). For your convenience, we have restated your comment in full.

 Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies

 Fair Value, page 61

Comment:

We note your response to comment 1 from our letter dated December 15, 2005 that you apply the AICPA Broker-Dealer Guide to your activities unless other specialized industry guidance,
including AICPA Audit Guides, is required to be applied to the operation of an individual subsidiary. Please tell us all the types of positions, aside from securities and derivatives that you account for at fair value as inventory under the AICPA
Broker-Dealer Guide. Please indicate the specific nature of each type of financial and non-financial position that you fair value and explain your basis for applying fair value accounting.

Response:

[*]

 [*] CONFIDENTIAL TREATMENT

 REQUESTED BY MORGAN STANLEY

 [*]

 *****

 In connection with responding
to your comment, we acknowledge 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

•
the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

 Please feel free to contact me at 212-761-4508 or Paul C. Wirth,
our Controller and Principal Accounting Officer at 212-761-6686, if you would like further clarification or additional information.

 Sincerely,

 /s/ David H. Sidwell

 David H. Sidwell

 Chief Financial Officer

 cc: Michael Volley, Securities & Exchange
Commission

 Robert Walsh, Deloitte & Touche, LLP

 James V. Schnurr, Deloitte & Touche, LLP

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 4561

January 23, 2006

David H. Sidwell
Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, New York 10036

RE:	Morgan Stanley
	Form 10-K for Fiscal Year Ended November 30, 2004
Filed February 11, 2005
File No. 001-11758

Dear Mr. Sidwell,

	We have reviewed your letter filed on January 12, 2006 and
have
the following comment.  Please provide us with the requested
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.  We
welcome any questions you may have about our comment or any other
aspect of our review.  Feel free to call us at the telephone
numbers
listed at the end of this letter.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Critical Accounting Policies
Fair Value, page 61

1. We note your response to comment 1 from our letter dated
December
15, 2005 that you apply the AICPA Broker-Dealer Guide to your
activities unless other specialized industry guidance, including
AICPA Audit Guides, is required to be applied to the operation of
an
individual subsidiary.  Please tell us all the types of positions,
aside from securities and derivatives that you account for at fair
value as inventory under the AICPA Broker-Dealer Guide.  Please
indicate the specific nature of each type of financial and non-
financial position that you fair value and explain your basis for
applying fair value accounting

Please respond to this comment within 10 business days or tell us
when you will provide us with a response.  Your letter should key
your response to our comment and provide any requested
information.
Please file your letter on EDGAR.  Please understand that we may
have
additional comments after reviewing your response to our comment.

	You may contact Michael Volley, Staff Accountant, at (202)
551-
3437 or me at (202) 551-3490 if you have questions regarding our
comment.

Sincerely,

Don Walker
Senior Assistant Chief Accountant

??

??

??

??

David H. Sidwell
Morgan Stanley
January 23, 2006
Page 2

</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

Correspondence Filing

 1585 Broadway

 New York, NY 10036

 January 12, 2006

 Mr. Donald Walker

 Senior Assistant Chief Accountant

 Division of Corporation Finance

 Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

Re:
Form 10-K for the fiscal year ended November 30, 2004

File No. 001-11758

 Dear Mr. Walker:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of December 15, 2005 concerning its Form 10-K for the fiscal year ended
November 30, 2004 (the “filing”). For your convenience, we have restated your comment in full.

 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 Critical Accounting Policies

 Fair Value, page 61

Comment:
We note your disclosure that you carry physical commodities at fair value. Please tell us the authoritative literature you relied upon in determining that it was appropriate to
carry physical commodities at fair value. If you apply the guidance in the AICPA Audit and Accounting Guide: Brokers and Dealers in Securities (AICPA Broker-Dealer Guide) to these positions please identify the legal entities that own the physical
commodities and tell us whether these legal entities are regulated broker-dealer subsidiaries. If you apply the guidance in the AICPA Broker-Dealer Guide to non-regulated broker-dealer subsidiaries, please tell us why you believe that these entities
are included in the scope of the guide.

Response:
The accounting policies adopted by the Company contemplate the fact that the predominant business activities of the Company are those of a registered broker and dealer as such
activities are described in Chapter 1 of the AICPA Audit and Accounting Guide: Brokers and Dealers in Securities (the “Guide”). In order to execute those business activities the Company has adopted a legal entity structure that, among
other things, is designed to 1) support our business objectives, 2) deploy capital efficiently, and 3) comply with regulatory requirements. The operations of the Company include trading physical commodities that are executed and held predominantly
through a wholly-owned subsidiary, Morgan Stanley Capital Group (“MSCG”), which is not a registered securities broker-dealer.

The Company has adopted the policy of reporting its physical commodities inventory at fair value because it has concluded that MSCG is subject to the Guide. While MSCG is not
required to register as a securities broker-dealer, its activities and operations in markets unrelated to securities are consistent with, from an accounting perspective, the securities dealing activities of a registered broker-dealer. The Guide
states in the Preface, in part:

This Guide applies to preparation and audit of financial statements of entities that are broker-dealers in securities. The activities of broker-dealers in securities are described
in Chapter

1. Operations of such entities are subject to the rules and regulations of the Securities and Exchange Commission and other regulatory bodies.

Chapter 1 clarifies the activities of a broker-dealer as follows:

Securities broker-dealers perform various functions within the securities industry. Brokers acting as agents facilitate their customers’ purchase and sale of securities,
commodities, and related financial instruments and usually charge commissions. Dealers or traders acting as principals buy and sell for their own accounts from and to customers and other dealers. Dealers typically carry an inventory and make a
profit or loss on the spread between bid and asked prices or on markups from dealer prices, or they make a speculative profit or loss on market fluctuations. Many firms are known as broker-dealers because they act in both capacities.

We believe that the activities of MSCG meet the definition of the activities described in Chapter 1, specifically, acting as principal in the purchases and sales of commodities and
derivative transactions (which are often based upon, and occasionally settled with, the same physical commodity inventory). MSCG carries inventory of physical commodities in order to effectuate such activities. As such, the Company has applied the
accounting guidance set forth in Chapter 7 of the Guide to such inventory which states in part “A broker-dealer accounts for

 2

inventory and derivative positions (such as futures, forwards, swaps, and options) at fair value.” [footnote omitted] This guidance is illustrated in Exhibit 4-3 of the Guide.

As a general matter, we have applied the Guide to the activities of the Company unless other specialized industry guidance, including AICPA Audit Guides, is required to be applied
to the operations of an individual subsidiary. We believe that such application is appropriate and, in addition, such application to certain activities of the Company is specifically prescribed by the Guide in Chapter 7 which states in part:

Generally accepted accounting principles (GAAP) apply to broker-dealers in the same manner as they apply to other industries; however, certain activities of broker-dealers’
operations are unique. It is the purpose of this chapter to identify and discuss the accounting treatment for certain of those unique activities that are engaged in by broker-dealers. New broker-dealer activities may develop that will require
accounting guidance to reflect their economic substance. The accounting principles that apply to the specific activities addressed in this chapter can be applied to other activities that are similar to those discussed. [emphasis added]

As the guidance above states, the unique (mark-to-market) accounting of the Guide can also be applied to “other activities that are similar to those discussed.” This is
also consistent with the definition of the activities of a broker-dealer from Chapter 1 of the Guide (as discussed above).

While not authoritative guidance, the Company’s position is further supported by paragraph 1.09 of the AICPA Practice Aid for Audits of Futures Commission Merchants,
Introducing Brokers, and Commodity Pools, which states:

Nonregulated Dealers

Many business enterprises operate primarily as traders and/or dealers in physical commodities and commodity derivatives. These include trading and dealing in base and precious
metals, energy products and agricultural commodities, and related derivative products. The accounting principles used by these enterprises should be in conformity with the principles set forth in the Audit and Accounting Guide Brokers and Dealers in
Securities, most specifically, long and short commodities and commodity derivative positions should be accounted for at market value with unrealized gains and losses recorded currently in the statement of income or operations.

Additionally, our aforementioned views are consistent with the Securities and Exchange Commission’s Consolidated Supervised Entities rule which became effective for the Company
as of December 1, 2005. Such rule subjects a

 3

qualifying broker-dealer’s holding company to group-wide supervision and examination by the Securities and Exchange Commission and requires regulatory capital computations
based upon the fair value of the underlying assets and liabilities on a consolidated basis. As a result, the activities of MSCG are included in such group-wide supervision and examination.

Summary

In summary, we believe fair value accounting for physical commodities inventory is the appropriate accounting because the activities of MSCG are covered by the Guide.

We believe that to reflect different accounting for MSCG based solely on its different legal entity structure is inappropriate when in substance the activities and operations of
MSCG are identical to those of a registered broker-dealer. Such a conclusion would permit a company that is predominantly a broker-dealer to selectively apply the accounting literature to achieve a desired result.

 *****

 In connection with responding to your comment, we acknowledge 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

•

the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.

 Please feel free to contact me at 212-761-4508 or Paul C. Wirth,
our Controller and Principal Accounting Officer at 212-761-6686, if you would like further clarification or additional information.

 Sincerely,

 /s/ David H.
Sidwell

 David H. Sidwell

 Chief
Financial Officer

cc:
Michael Volley, Securities & Exchange Commission

Robert Walsh, Deloitte & Touche, LLP

 4

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 4561

December 15, 2005

David H. Sidwell
Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, New York 10036

RE:	Morgan Stanley
	Form 10-K for Fiscal Year Ended November 30, 2004
Filed February 11, 2005
File No. 001-11758

Dear Mr. Sidwell,

	We have reviewed the above referenced filing, limiting our
review to those issues addressed in our comment.  Please provide
us
with the requested information so we may better understand your
disclosure.  After reviewing this information, we may raise
additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comment or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Critical Accounting Policies
Fair Value, page 61

1. We note your disclosure that you carry physical commodities at
fair value.  Please tell us the authoritative literature you
relied
upon in determining that it was appropriate to carry physical
commodities at fair value.  If you apply the guidance in the AICPA
Audit and Accounting Guide: Brokers and Dealers in Securities
(AICPA
Broker-Dealer Guide) to these positions please identify the legal
entities that own the physical commodities and tell us whether
these
legal entities are regulated broker-dealer subsidiaries.  If you
apply the guidance in the AICPA Broker-Dealer Guide to non-
regulated
broker-dealer subsidiaries, please tell us why you believe that
these
entities are included in the scope of the guide.

	Please respond to this comment within 10 business days or
tell
us when you will provide us with a response.  Your letter should
provide any requested information.  Please file your letter on
EDGAR.
Please understand that we may have additional comments after
reviewing your response to our comment.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

	In connection with responding to our comment, please provide,
in
writing, a 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

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

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

	You may contact Michael Volley, Staff Accountant, at (202)
551-
3437 or me at (202) 551-3490 if you have questions regarding our
comment.

Sincerely,

Don Walker
Senior Assistant Chief Accountant

??

??

??

??

David H. Sidwell
Morgan Stanley
December 15, 2005
Page 2

</TEXT>
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