Business Continuity Planning Information
To our Clients and Prospective Clients of our Securities Businesses:
As part of our ongoing commitment to inform and engage our clients, we would like to give you an update on Morgan Stanley’s Business Continuity Planning ("BCP") Program for the Americas.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT OR ESTABLISHING A NEW CUSTOMER RELATIONSHIP
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each individual or institution that opens an account or establishes a customer relationship with Morgan Stanley.
What this means: If you enter into a new customer relationship with Morgan Stanley, the Firm will ask for your name, address, date of birth (as applicable) and other identification information. This information will be used to verify your identity. As appropriate, the Firm may, in its discretion, ask for additional documentation or information. If all required documentation or information is not provided, Morgan Stanley may be unable to open an account or establish a relationship with you.
SEC order execution and routing disclosure
U.S. Securities and Exchange Commission ("SEC") Rule 606 of Regulation NMS requires all brokerage firms to publicly disclose their order routing practices. Disclosure is to describe routing of "non-directed orders," that is, orders that customers have not specifically asked to have sent to a particular venue for execution. For these non-directed orders, we select the venue on behalf of our customers.
The SEC-mandated quarterly reports of our order routing statistics for the
most recent quarter and for the
previous quarters provide information on the routing of orders placed with Morgan Stanley.
Note: This Report represents the order routing statistics for Morgan Stanley & Co Incorporated. Morgan Stanley & Co. Incorporated (MSCO) merged with Morgan Stanley DW Inc. (MSDW), a former broker-dealer affiliate of MSCO, as a single broker dealer effective April 1, 2007. The MSCO Rule 606 Report on Routing of Customer represents the combined order routing statistics of customer non-directed orders for individual investors (formerly MSDW) and institutional investors (MSCO) effective 2nd quarter 2007.
Margin disclosure statement
Morgan Stanley & Co. Incorporated is furnishing this document to provide some basic facts about purchasing securities on margin and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review this document and the margin agreement that we provided to you. In the event of a conflict between this document and any other agreements you may have with Morgan Stanley the other agreements will govern. If you have any questions or concerns, please contact your Financial Advisor.
It is important that you understand fully the risks involved in trading securities on margin, which include but are not limited to the following:
- You can lose more funds than you deposit in the margin account
A decline in the value of securities purchased on margin may require you to provide additional funds to the Firm to avoid the forced sale of those or other securities or assets in your Account
- The Firm can force the sale of securities or other assets in your Accounts.
If the equity in your account falls below the NYSE margin maintenance requirements or the Firm’s higher "house" requirements, the Firm can sell the securities or other assets in any of your Accounts held at the Firm to cover the margin deficiency. You also will be responsible for any shortfall in the account after such a sale
- The Firm can sell your securities or other assets without contacting you.
Some investors mistakenly believe that their brokerage firm must contact them for a margin call to be valid and that their firm cannot liquidate securities or other assets in their accounts to meet the call unless the firm has contacted them first. This is not the case. While Morgan Stanley may attempt to notify you of margin calls, we are not required to do so. Furthermore, even if we contact you and provide a specific date by which to meet a margin call, we can still take the steps necessary to protect our financial interests, including selling the securities immediately without notice to you.
- You are not entitled to choose which securities or other assets in your Account are to be liquidated or sold to meet a margin call.
Because the securities are collateral for the margin loan, the Firm has the right to decide which security to sell in order to protect its interests.
- The Firm can increase its "house" margin maintenance requirements at any time and is not required to provide you advance written notice.
These changes in Firm policy often take effect immediately and may result in the issuance of a margin maintenance call. Your failure to satisfy the call may require us to liquidate or sell securities in your Accounts.
- You are not entitled to an extension of time on a margin call.
While an extension of time to meet margin requirements may be available to you under certain conditions, you do not have a right to the extension.
Portfolio Loan Account Disclosures
Portfolio Loan Account is a securities-based loan. Securities-based loans involve a high degree of risk and market conditions can magnify any potential for loss. You should review the following risks carefully before applying for a Portfolio Loan Account.
- Portfolio Loan Account is a demand loan. As such, Morgan Stanley Bank can call the loan at any time and for any reason.
- Portfolio Loan Account is an uncommitted loan facility. As such, Morgan Stanley Bank reserves the right not to fund any advance request due to insufficient collateral or for any other reason.
- Sufficient collateral must be maintained to support your loan(s) and to take future advances. A decline in the value of securities purchased on margin may require you to provide additional funds to the Firm to avoid the forced sale of those or other securities or assets in your Account.
- Morgan Stanley Bank can force the sale of securities or other assets in your Accounts. If the equity in your account falls below the maintenance requirement, the Firm can sell the securities or other assets in your collateral accounts. You also will be responsible for any shortfall in the account after such a sale.
- The Firm can sell your securities or other assets without contacting you. While Morgan Stanley Bank may attempt to notify you of margin calls, we are not required to do so. Furthermore, even if we contact you and provide a specific date by which to meet a margin call, we can still take the steps necessary to protect our financial interests, including selling the securities immediately without notice to you.
- You are not entitled to choose which securities or other assets in your Account are to be liquidated or sold to meet a margin call. Because the securities are collateral for a PLA, Morgan Stanley Bank has the right to decide which security to sell in order to protect its interests.
- Morgan Stanley Bank can increase collateral maintenance requirements at any time without notice.
- PLA approval is at the sole discretion of Morgan Stanley Bank. Terms can change at any time at the sole discretion of Morgan Stanley Bank.
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| Margin Borrowing/Base Lending Rate |
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Margin Rates
Morgan Stanley sets its Base Lending Rate in light of market conditions. The current Base Lending Rate is 6.75%. The Base Lending Rate reflects the broker call rate, the prime rate, the federal funds rate, and other commercially recognized interest rates. The interest rate that you are charged for borrowing on margin will increase or decrease without notice as the Base Lending Rate increases or decreases. A percentage will be added to the Base Lending Rate, generally depending on the total size of your debit balance, to arrive at your borrowing rate. For details, see the Morgan Stanley Margin Client Agreement.
 | Loan
Amount | | Rate | |
| $10,000,000 + | | 5.250% | |
| $5,000,000 - $9,999,999 | | 5.500% | |
| $1,000,000 - $4,999,999 | | 6.500% | |
| $500,000 - $999,999 | | 7.375% | |
| $100,000 - $499,999 | | 7.625% | |
| $50,000 - $99,999 | | 8.875% | |
| $25,000 - $49,999 | | 9.000% | |
| $10,000 - $24,999 | | 10.000% | |
| $0 - $9,999 | | 10.125% | |
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Legal disclaimer
Depending on your specific investment objectives and financial position, the investments discussed or recommended in this Web site may or may not be suitable for you. It is up to you to weigh any decision carefully. Past performance is not necessarily a guide to future performance and is no guarantee of future results. Income from investments may fluctuate. The price or value of any investment identified directly or indirectly in this Web site may fall or rise against your interests and the interests of other investors.
This firm or one of its affiliates may from time to time perform or seek to perform investment banking services for any company mentioned in these pages, and this firm and others associated with it may at any time be long or short, sell or buy, make markets or specialize in, have options in and effect transactions in the securities mentioned.
Opinions, where and when expressed, are subject to change without notice. Information was obtained from sources considered reliable, but no representation is made as to its accuracy.
