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U.S. Securities and Exchange Commission

Securities Act of 1933
Section 5

November 22, 2016

Response of the Office of Chief Counsel
Division of Corporation Finance


Morgan Stanley Smith Barney LLC
Incoming letter dated November 21, 2016

Based on the facts and representations in your letter, and without necessarily agreeing with your analysis, the Division’s views are as follows.  Capitalized terms have the same meanings as defined in your letter.

For purposes of Section 5(a) of the Securities Act of 1933, the Division is of the view that the proposed procedures for offering and selling securities in initial public offerings described in your request, to the extent they are followed, would not involve a pre-effective sale.  In reaching this position, we particularly note your representations that:

  • Morgan Stanley will distribute a COB Process Summary to inform clients of their right to withdraw any conditional offer to buy (COB) up to and including the Withdrawal Time;
  • Morgan Stanley will send emails to clients confirming receipt of COBs and reminding clients of their ability to withdraw;
  • Morgan Stanley’s policies and procedures will provide, among other things, that financial advisors will be responsible for making sure clients understand their ability to withdraw;
  • Morgan Stanley will notify clients of the effectiveness or anticipated effectiveness of the registration statement, and provide clients a minimum of at least one hour following that notice to withdraw pending COBs;
  • In the event of a material change to the preliminary prospectus or final offering price that is outside of the COB Price Range, any prior COB would no longer be valid; and
  • Morgan Stanley will not collect any purchase funds for shares offered in an initial public offering until it accepts a client’s COB following effectiveness of the registration statement.

Because this position is based upon the representations made in your letter, any different facts or conditions might require the Division to reach a different conclusion.  You have not raised, and we express no view on, the application of Securities Act Rule 134(d).


David Fredrickson
Chief Counsel and Associate Director

Incoming Letter:

The Incoming Letter is in Acrobat format.


Modified: 11/22/2016