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2021 Resolution Plan Public Section

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2021 Resolution Plan Public Section 2021 Resolution Plan Public Section PUBLIC SECTION 1. Executive Summary ....................................................................................................................... 3 1.1. Introduction ................................................................................................................................... 3 1.2. Recent Regulatory Feedback and Guidance ............................................................................... 5 1.3. Key Enhancements and Changes in the Plan .............................................................................. 6 1.3.1. Drivers of Key Enhancements and Changes ................................................................... 6 1.3.2. Key Enhancements and Changes ................................................................................... 8 1.4. Advantages of the Firm’s SPOE Resolution Strategy ................................................................ 12 1.5. The Plan ..................................................................................................................................... 12 1.5.1. Resolution Objectives .................................................................................................... 13 1.5.2. Resolution Strategy ....................................................................................................... 14 1.5.3. Resolvable Morgan Stanley ........................................................................................... 14 1.6. Conclusion .................................................................................................................................. 17 2. Firm Overview .............................................................................................................................. 18 3. Resolution Strategy ..................................................................................................................... 20 3.1. Overview ..................................................................................................................................... 20 3.2. ISG Solvent Wind Down Summary ............................................................................................ 23 3.3. Wealth Management and Investment Management Sales ........................................................ 24 4. Resolvable Morgan Stanley ........................................................................................................ 26 4.1. Legal Framework ........................................................................................................................ 26 4.1.1. Governance Mechanisms .............................................................................................. 26 4.1.2. Legal Entity Rationalization ........................................................................................... 29 4.1.3. Legal Obstacles Associated with Emergency Motions .................................................. 31 4.2. Financial Adequacy .................................................................................................................... 33 4.2.1. Liquidity .......................................................................................................................... 34 4.2.2. Capital ............................................................................................................................ 35 4.2.3. Resolution Financial Model ............................................................................................ 38 4.2.4. Positioning Framework .................................................................................................. 38 4.2.5. Intercompany Funding Recovery and Resolution Playbook .......................................... 39 4.2.6. Trigger and Escalation Framework and Support Agreement Incorporation .................. 40 4.2.7. Derivatives and Trading Activities ................................................................................. 40 4.2.8. Separability .................................................................................................................... 45 4.3. Operational Continuity ................................................................................................................ 48 4.3.1. Management Information Systems ................................................................................ 48 4.3.2. Payment, Clearing and Settlement Activities ................................................................. 49 4.3.3. Managing, Identifying and Valuing Collateral ................................................................ 52 4.3.4. Shared and Outsourced Services .................................................................................. 54 5. Recovery and Resolution Planning Governance ..................................................................... 60 5.1. RRP Governance ....................................................................................................................... 60 5.2. Plan Development ...................................................................................................................... 60 6. Conclusion ................................................................................................................................... 61 7. Forward Looking Statements ..................................................................................................... 62 8. Appendix A: Description of Core Business Lines ................................................................... 63 9. Appendix B: Description of Material Entities ........................................................................... 67 Public Section i 10. Appendix C: Summary Financial Information .......................................................................... 73 11. Appendix D: Memberships in Material Payment, Clearing and Settlement Systems .......... 77 12. Appendix E: Foreign Operations ............................................................................................... 78 13. Appendix F: Interconnectedness ............................................................................................... 80 13.1. Funding Relationships ................................................................................................................ 80 13.2. Service Relationships ................................................................................................................. 81 13.3. Transactional Relationships ....................................................................................................... 82 13.3.1. Interconnectedness within ISG Core Business Line...................................................... 82 13.3.2. Interconnectedness within WM Core Business Line ..................................................... 83 13.3.3. Interconnectedness within IM Core Business Line ........................................................ 83 13.4. Guarantees ................................................................................................................................. 84 14. Appendix G: Material Supervisory Authorities ........................................................................ 85 15. Appendix H: Principal Officers ................................................................................................... 87 16. Glossary ........................................................................................................................................ 88 Public Section ii 1. Executive Summary 1.1. Introduction Morgan Stanley (as a stand-alone parent holding company, “MS Parent,” and on a consolidated basis, the “Firm”) is a global financial services firm that, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of customers and counterparties. The Firm conducts its business from its headquarters in and around New York City, its regional offices and branches throughout the United States and its principal offices in London, Tokyo, Hong Kong and other world financial centers. The Firm is committed to managing its operations to promote the integrity of the financial system and fulfilling its responsibility to maintain the highest standards of excellence. The Firm supports regulatory changes made since 2008 that mitigate systemic risk and improve global financial stability. One such regulatory change is the requirement for financial institutions to submit resolution plans. The Firm believes that resolution planning is a key element of systemic regulation to help protect the soundness of the global financial system. Accordingly, the Firm has prioritized resolution planning and made it an essential element of its risk management and strategic planning processes, integrating resolvability criteria into its business-as-usual (“BAU”) conduct. The Firm has dedicated significant Firm resources to resolution planning, with the involvement of a substantial number of employees across the Firm, including the Firm’s senior executive management. In its resolution planning, the Firm is guided by and committed to the key objectives of (i) operating in a manner and with a culture that contributes to the safety and soundness of the global financial system and (ii) enhancing its resiliency and resolvability. The Firm has developed a resolution plan in accordance with the requirements of Section 165(d) of Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)
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