AddedRisk Factors
predict, and we could realize significant losses if extreme market events were to occur.
MSMorgan Stanley
- Employees
- 83,000
- Headquarters
- New York, NY
- CEO
- Edward Pick
- Next results
- around Jan 14, 2027
10-K 0000895421-26-000086 (2026-02-19) vs 10-K 0000895421-25-000304 (2025-02-21)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 10,529 | 9.3% |
| MD&A | Item 7 | 18,574 | 16.0% |
| Legal Proceedings | Item 3, via Note 14 – Commitments, Guarantees and Contingencies | 5,031 | 9.5% |
| Accounting Policies | Item 8, Note 2 – Significant Accounting Policies | 8,212 | 12.5% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Accounting Policies 251 words changed in this paragraph; it is 32% similar to last year's version.
The Firm’s designated fair value hedges consist of interest rate swaps designated as hedges of changes in the benchmark interest rate of certain fixed-rate AFS securities and senior borrowings. The Firm also designates interest rate swaps as fair value hedges of changes in the benchmark interest rate of certain fixed rate deposits. The Firm is permitted to hedge the full, or part of the contractual term of the hedged instrument. The Firm uses regression analysis to perform an ongoing prospective and retrospective assessment of the effectiveness of these hedging relationships. For qualifying fair value hedges of benchmark interest rates, the change in the fair value of the derivative, offset by the change in the fair value attributable to the change in the benchmark interest rate risk of the hedged asset (liability), is recognized in earnings each period as a component of Interest income (expense). For AFS securities, the change in fair value of the hedged item due to changes other than the risk being hedged will continue to be reported in OCI. When a derivative is de-designated as a hedge, any basis adjustment remaining on the hedged asset (liability) is amortized to Interest income (expense) over the remaining life of the asset (liability) using the effective interest method. For certain AFS securities, the Firm also applies the portfolio layer method of hedge accounting, which permits prepayable and non-prepayable assets to be included in the portfolio and allows more of the portfolio to be hedged. Further, the portfolio layer method of accounting requires that basis adjustments are maintained at the portfolio level and not allocated to individual items until certain de-designation events occur. The amount designated as hedged is the sum of the notional amounts of all outstanding layers in each portfolio. Refer to Note 6 and Note 7 to the financial statements for additional information on portfolio layer method hedging.
Source: Item 8, Note 2 – Significant Accounting Policies, 10-K 0000895421-26-000086 vs Item 8, Note 2 – Significant Accounting Policies, 10-K 0000895421-25-000304
Legal Proceedings 138 words changed in this paragraph; it is 63% similar to last year's version.
Beginning in February of 2024, Morgan Stanley Smith Barney LLC (“MSSB”) and E*TRADE Securities LLC (“E*TRADE Securities”), among others, have been named as defendants in multiple putative class actions pending in the federal district courts for the District of New Jersey and SDNY. The class action claims have been brought on behalf of brokerage, advisory and retirement account holders, alleging various contractual, fiduciary, and statutory claims (including under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1962(c)-(d)) that MSSB and/or E*TRADE Securities failed to pay a reasonable rate of interest on its cash sweep products. All matters pending in the SDNY (which focus solely on MSSB’s cash sweep program) were consolidated into one action styled Estate of Sherlip, et al. v. Morgan Stanley, et al. An amended class action complaint was filed on August 15, 2025. On September 12, 2025, MSSB moved to dismiss the complaint. The cases are at an early stage with motions for consolidation matters pending in the District of New Jersey (which includes claims against both MSSB and transfer currently pending. E*TRADE Securities) have been consolidated into one action styled In re E*TRADE Cash Sweep Litigation, No. 2:24-cv-00603. The Firm awaits the appointment of lead counsel and, thereafter, the filing of a consolidated complaint in that matter. Together, the complaints seek, inter alia, certification of a class classes of plaintiffs, unspecified compensatory damages, equitable and injunctive relief, and treble damages. The Firm is also responding to requests from state securities regulators regarding brokerage account cash balances swept to the affiliate bank deposit program.
Source: Item 3, via Note 14 – Commitments, Guarantees and Contingencies, 10-K 0000895421-26-000086 vs Item 3, via Note 14 – Commitments, Guarantees and Contingencies, 10-K 0000895421-25-000304
MD&A 116 words changed in this paragraph; it is 58% similar to last year's version.
For the 2024 2025 capital planning and stress test cycle, we submitted our capital plan and company-run stress test results to the Federal Reserve on April 5, 2024. 7, 2025. On June 26, 2024, September 30, 2025, the Federal Reserve published summary results announced that it had reduced Morgan Stanley’s SCB from 5.1% to 4.3%, effective on October 1, 2025 in response to the Firm seeking reconsideration of its supervisory stress tests of each large BHC, preliminary SCB announced in which the projected decline in our CET1 ratio in the severely adverse scenario increased from the prior annual supervisory stress test by 50 basis points, from 4.1% to 4.6%. Following the publication of the supervisory stress test results, we announced that our SCB will be 6.0% from October 1, 2024 through September 30, June 2025. In addition to the projected decline in our Common Equity Tier 1 ratio in the severely adverse scenario, our SCB reflects the increase in our common stock dividend in the dividend add-on. Together with other features of the regulatory capital framework, this SCB results in an aggregate Standardized Approach Common Equity Tier 1 CET1 ratio of 13.5%. 11.8%. Generally, our SCB is determined annually based on the results of the supervisory stress test.
Source: Item 7, 10-K 0000895421-26-000086 vs Item 7, 10-K 0000895421-25-000304
Risk Factors 99 words changed in this paragraph; it is 77% similar to last year's version.
We are subject to numerous political, economic, legal, compliance, tax, operational, franchise and other risks that are inherent in operating in many countries, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls, increased taxes, levies and tariffs, cybersecurity, data transfer and outsourcing restrictions, regulatory scrutiny regarding the use of new technologies, prohibitions on certain types of foreign and capital market activities, limitations on cross-border listings and other restrictive governmental actions, as well as the outbreak of hostilities or political and governmental instability, including tensions between China the U.S. and its significant trading partners, such as China, as well as the U.S., the expansion or escalation of hostilities between Russia and Ukraine or in the Middle East, or the initiation outbreak or escalation of hostilities or terrorist activity around the world world, and the potential associated impacts on global and local economies and our operations. In many countries, the laws and regulations applicable to the securities and financial services industries and multinational corporations are uncertain, evolving and subject to sudden change or may be inconsistent with U.S. law. It may also be difficult for us to determine the exact requirements of local laws in every market or adapt to changes in law, which could adversely impact our businesses. Our inability to remain in compliance with local laws in a particular market could have a significant and negative effect not only on our business in that market but also on our reputation generally. We are also subject to the risk that transactions we structure might not be legally enforceable in all cases.
Source: Item 1A, 10-K 0000895421-26-000086 vs Item 1A, 10-K 0000895421-25-000304
Every change, by type
Sentences and paragraphs of MS's Risk Factors and MD&A, 10-K 2026-02-19 against 10-K 2025-02-21. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
Our businesses and operations may also be adversely impacted by inadequate data quality management processes, including failure to meet defined expectations related to the appropriate completeness, timeliness and accuracy of data in reports, models or other data deliverables.
AddedRisk Factors
operations and/or increase costs. Any theft of data, technology or intellectual property may negatively impact our operations and reputation, including disrupting the business activities of our subsidiaries, affiliates, joint ventures or clients conducting business in those jurisdictions.
AddedRisk Factors
authorities take significant action against us or our industry, or if we discover significant employee misconduct or illegal activity.
AddedRisk Factors
“Quantitative and Qualitative Disclosures about Risk—Legal, Regulatory and Compliance Risk.”
AddedRisk Factors
Firm initiatives, which may heighten the potential conflicts of interest or the risk of improper sharing of information.
AddedRisk Factors
As a U.S. company, we are required to comply with the economic sanctions and embargo programs administered by OFAC and similar multinational bodies and governmental
AddedRisk Factors
concerns regarding the manner in which these assets are being operated or held, or services are being delivered.
AddedRisk Factors
the way we respond is perceived negatively, our business and reputation may suffer.
RemovedRisk Factors
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RewordedRisk Factors
Our ability to achieve our climate-related targets and commitments objectives and the way we go about this are subject to risks and uncertainties, many of which are outside our control, such as the pace and success of client transition, energy demand and usage, the implementation of public policy and technological advances, and could also result in reputational harm as a result of public sentiment, legislative and regulatory scrutiny (including from U.S. federal and state governments and foreign policymakers and regulators), litigation and reduced investor and stakeholder confidence.
RewordedRisk Factors
Like other financial services firms, the Firm, its third-party providers and its clients continue to be the subject of unauthorized access attacks; mishandling, loss, theft or misuse of information; computer viruses or malware; cyberattacks designed to obtain confidential information, destroy data, disrupt or degrade service, sabotage systems or networks, impede our ability to execute or confirm settlement of transactions or cause other damage; ransomware; denial of
RewordedRisk Factors
If we are unable to achieve our climate-related objectives relating to climate change or our current response to climate change climate-related risks is perceived to be ineffective or insufficient, or the way we respond is perceived negatively, our business and reputation may suffer.
RewordedRisk Factors
Nonetheless, our risk management capabilities may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk, including risks that are unidentified or unanticipated.
RewordedRisk Factors
Moreover, we utilize multiple brands and business channels, including those resulting from our acquisitions, and continue to enhance the collaboration across business segments, which may heighten the potential conflicts including as part of interest or the risk of improper sharing of information. our Integrated
RewordedRisk Factors
In addition, our reputation and client relationships may be adversely impacted as a result of our, or our clients’, involvement involvement, or lack of involvement, in certain practices that may have, impact, or are perceived or associated with having, an adverse impact on climate change. impacting the climate.
RewordedRisk Factors
In addition, our ability to raise funding could be impaired if investors, depositors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading, credit or operational losses, a downgrade by the rating agencies, a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or if we discover significant employee misconduct or illegal activity.
RewordedRisk Factors
The Firm and its employees are subject to wide-ranging regulation and supervision, which, among other things, subject us to intensive scrutiny of our businesses and any plans for expansion of those businesses through acquisitions or otherwise, limitations on activities, a systemic risk regime that imposes heightened capital and liquidity and funding requirements, including the global implementation of capital standards established by the Basel Committee, and other enhanced prudential standards, resolution regimes and resolution planning requirements, requirements for maintaining minimum amounts of TLAC and external long-term debt, restrictions on activities and investments imposed by the Volcker Rule, comprehensive derivatives regulation, interest rate benchmark requirements, commodities regulation, market structure regulation, consumer protection regulation, AML, terrorist financing and anti-corruption rules and regulations, tax regulations and interpretations, antitrust laws, trade and transaction reporting obligations, requirements related to preventing the misuse of confidential information, including material non-public information, record-keeping requirements, broadened fiduciary obligations and disclosure requirements. requirements and laws and regulations related to new technologies, including artificial intelligence and tokenization.
RewordedRisk Factors
This risk may arise from a variety of business activities, including, but not limited to: extending credit to clients through various lending commitments; entering into swap or other derivative contracts under which counterparties have obligations to make payments to us; acting as clearing broker for listed and over-the-counter derivatives whereby we guarantee client performance to clearinghouses; providing short- or long-term funding that is secured by physical or financial collateral, including, but not limited to, real estate and marketable securities, whose value may at times be insufficient to fully cover the loan repayment amount; posting margin and/or
RewordedRisk Factors
These business activities expose us to new and enhanced risks, greater regulatory scrutiny of these activities, increased credit-related, sovereign, compliance and operational risks, as well as franchise and reputational concerns regarding the manner in which these assets are being operated or held, or services are being delivered.
RewordedRisk Factors
In addition, regulatory requirements that are imposed by foreign policymakers and regulators may be inconsistent or conflict with regulations that we are subject to in the U.S. and may adversely affect us.
RewordedRisk Factors
This may increase the overall level of capital and liquidity required by us on a consolidated basis and may result in limitations on our ability to efficiently distribute capital and liquidity among our affiliated entities, including in times of stress.
Quiet changesRisk Factors
Our liquidity and financial condition have in the past been, and could in the future could be, adversely affected by U.S. and international markets and economic conditions.
Quiet changesRisk Factors
It is also possible that competition may become even more intense as we continue to compete with financial or other institutions that may be, or will may become, larger, or better capitalized, or may have a stronger local presence and longer operating history in certain geographies or products.
AddedMD&A
•The Firm expense efficiency ratio was 68% compared to 71% in the prior year, demonstrating operating leverage while continuing to invest in our businesses.
AddedMD&A
loans, while Borrowings, Securities loaned and Securities sold under agreements to repurchase generally incur interest expense.
AddedMD&A
4.The number of stock plan participants declined slightly in 2025, primarily as a result of the previously announced disposition of the Firm’s EMEA stock plan business.
AddedMD&A
•Non-compensation expenses were relatively unchanged compared with the prior year as higher marketing and business development costs and increased technology spend were offset by lower amortization of intangible assets.
AddedMD&A
6.As of December 31, 2025, 2024, and 2023, Alternatives and Solutions includes Parametric Long-Term period-end AUM of $524 billion, $423 billion and $336 billion, respectively. Parametric Long-Term products generally have lower average fee rates than other Alternatives and Solutions products.
AddedMD&A
Consistent with the Firm’s strategic objective of ongoing growth of eligible assets at MSBNA, on February 14, 2026, the fixed income derivatives business of Morgan Stanley Capital Services LLC (“MSCS”) was merged into MSBNA.
AddedMD&A
•ASU 2025-06 - Internal-Use Software (Issued September 2025). This update introduces targeted improvements to the recognition and capitalization guidance for internal-use software costs. The update eliminates the prior “project stage” framework and instead requires capitalization of software development costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform its intended function. In assessing the probability threshold, entities are required to evaluate whether significant development uncertainty exists, including whether the software contains novel or unproven functionality or whether significant performance requirements have not been identified or continue to be substantially revised. The update is effective for the Firm beginning January 1, 2028, with early adoption permitted. Transition may be applied prospectively, retrospectively, or under a modified approach. We are currently evaluating this accounting update.
AddedMD&A
•ASU 2025-07 - Derivatives Scope Refinements and Share-Based Consideration from a Customer (Issued September 2025). This update introduces targeted refinements to the derivatives and revenue recognition accounting guidance. It expands an existing scope exception for derivative accounting to exclude certain non-exchange-traded contracts. The update also clarifies that share-based payments from a customer are treated as noncash consideration under the revenue recognition standard until the related performance obligations are fulfilled and the right to the consideration is unconditional. The update is effective for the Firm beginning January 1, 2027, with early adoption permitted. Transition may be applied prospectively, or under a modified retrospective approach. We are currently evaluating this accounting update; however, we do not expect a material impact on our financial statements upon adoption.
AddedMD&A
•ASU 2025-08 - Purchased Loans (Issued November 2025). This update expands the application of the “gross-up” approach for purchased credit deteriorated financial assets under Topic 326 to include purchased seasoned loans (excluding credit cards), measured at amortized cost that are not credit deteriorated. Purchased seasoned loans include loans obtained in a business combination or loans acquired at least 90 days after origination and the acquirer was not involved in the origination, either through an asset purchase or through consolidation of a variable interest entity. The gross-up approach requires recognition of an allowance for credit losses at acquisition with a corresponding increase to the amortized cost basis of the loan. The update is effective for the Firm beginning January 1, 2027, with early adoption permitted. Transition will be applied prospectively to loans acquired on or after the adoption date. We are currently evaluating this accounting update.
AddedMD&A
•ASU 2025-09 - Hedge Accounting Improvements (Issued November 2025). This update improves hedge accounting guidance by clarifying certain aspects and aligning hedge accounting more closely with the economics of an entity’s risk management activities. The ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges by making targeted improvements to several areas including, but not limited to, the similar risk assessment for cash flow hedges. The update is effective for the Firm beginning January 1, 2027, with early adoption permitted. The updates should be applied prospectively for all hedging relationships as of the date of adoption. We are currently evaluating this accounting update; however, we do not expect a material impact on our financial statements upon adoption.
AddedMD&A
•ASU 2025-10 - Government Grants (Issued December 2025). This update introduces guidance on the accounting for government grants, including recognition, measurement and presentation requirements to reduce diversity in practice and increase consistency among business entities. The guidance excludes transactions within the scope of ASC 740, Income Taxes, government guarantees and the benefit of below-market interest rate loans. Grants related to an asset or to income will be recognized when it is probable that an entity will comply with the conditions attached to the grant, the grant will be received and the related expenses that the grant is intended to compensate have been incurred. For grants related to an asset, entities may elect either a deferred income approach or a cost accumulation approach. The update is effective for the Firm beginning January 1, 2029, with early adoption permitted. Transition may be applied on a modified prospective approach, a modified retrospective approach or on a full retrospective approach. We are currently evaluating this accounting update.
AddedMD&A
•ASU 2025-11 - Interim Reporting (Issued December 2025). This update improves the navigability of interim disclosure requirements and clarifies when that guidance is applicable. The amendments also add a principle for disclosing material events since the last annual reporting period, which aligns U.S. GAAP interim financial statement requirements with SEC regulations for registrants. The amendments do not expand or reduce existing disclosure requirements, rather they provide clarity on existing interim reporting requirements. The update is effective for interim periods beginning January 1, 2028, with early adoption permitted. Amendments may be applied prospectively or retrospectively. We are currently evaluating the disclosure impact of this accounting update; however, we do not expect a material impact on our financial statements upon adoption.
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RewordedMD&A
Net goodwill (16,373) (16,354) (16,394) 40 (19) Net intangible assets (4,663) (5,003) (5,509) 506 340 Impact of CECL transition — 62 124 (61) Other adjustments and deductions1 2,307 1,629 939 690 678 Total CET1 $83,153 $75,095 $69,448 $5,647 $ 8,058 capital Additional Tier 1 capital Preferred stock $9,750 $8,750 $1,000 $9,750 $ — Noncontrolling interests 823 807 758 49 16 Additional Tier 1 capital $10,573 $10,557 $9,508 $1,049 $ 16 Deduction for investments in covered funds (998) (862) (773) (89) (136) Total Tier 1 capital $92,728 $84,790 $78,183 $6,607 $ 7,938 Standardized Tier 2 capital Subordinated debt $8,380 $8,851 $8,760 $91 $ (471) Eligible ACL 2,411 2,065 2,051 14 346 Other adjustments and deductions (70) (139) (120) (19) 69 Total Standardized Tier 2 $10,721 $10,777 $10,691 $86 $ (56) capital Total Standardized capital $103,449 $95,567 $88,874 $6,693 $ 7,882 Advanced Tier 2 capital Subordinated debt $8,380 $8,851 $8,760 $91 $ (471) Eligible credit reserves 1,642 1,344 1,367 (23) 298 Other adjustments and (70) (139) (120) (19) 69 deductions Total Advanced Tier 2 capital $9,952 $10,056 $10,007 $49 $ (104) Total Advanced capital $102,680 $94,846 $88,190 $6,656 $ 7,834
RewordedMD&A
Regulatory VaR 124 124 2,637 2,637 Regulatory stressed VaR 643 643 526 526 Incremental risk charge 1,577 1,577 (2,114) (2,114) Comprehensive risk measure (98) 493 (6) (434) Specific risk 3,284 3,284 4,414 4,408 Total change in market risk RWA $ 5,530 5,457 $ 6,121 5,023 Balance at December 31, 2024 2025 $ 53,852 59,309 $ 54,322 59,345 Operational risk RWA Balance at December 31, 2023 N/A $ 102,095 Change in operational risk RWA N/A 4,485 Balance at December 31, 2024 N/A $ 106,580 Change in operational risk RWA N/A (1,697) Balance at December 31, 2025 N/A $ 104,883 Total RWA $ 471,834 552,515 $ 477,331 514,158
RewordedMD&A
Other net revenues were $1,262 $1,114 million in 2024 2025 compared with $823 $1,262 million in the prior year, primarily due to lower mark-to-market losses on corporate loans, inclusive of hedges, and higher net interest income and fees fees, following the sale of corporate loans held-for-sale in the first quarter of 2025, partially offset by net gains on corporate loans. loans held-for-sale, inclusive of hedges.
RewordedMD&A
Derivatives (8,690) 3,106 21,522 15,259 Securities financing transactions 9,699 1,871 22,249 4,593 Investment securities (133) (2,515) (718) (1,289) Commitments, guarantees and loans 7,956 15,523 22,203 5,565 Equity investments (50) (279) 4,029 4,538 Other credit risk 1,469 865 5,939 4,835 Total change in credit risk RWA $ 10,251 75,224 $ 18,571 33,501 Balance at December 31, 2024 2025 $ 417,982 493,206 $ 316,429 349,930 Market risk RWA Balance at December 31, 2023 2024 $ 48,322 53,852 $ 48,201 54,322 Change related to the following items:
RewordedMD&A
RewordedMD&A
Market risk RWA increased in 2024 2025 under both the Standardized and Advanced Approaches, primarily driven by higher charges on Specific risk and Incremental risk Risk due to increased exposures. Non-Securitization standardized charges and Regulatory VaR, partially offset by lower incremental risk charges driven by decreased exposure to non-investment grade issuances.
RewordedMD&A
RewordedMD&A
Under the Standardized Advanced Approach, the increase was primarily due to higher Securities financing transactions, growth Derivatives exposures, particularly in Corporate lending, as well as an increase in foreign exchange, Commitments, guarantees and loans, and Other credit risk driven by securitizations. risk.
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Under the Standardized Approach, the increase was primarily due to higher Securities financing transactions, growth Commitments, guarantees and loans, Derivatives exposures, particularly in Corporate lending, as well as an increase in foreign exchange and equities, and Other credit risk driven by securitizations. risk.
RewordedMD&A
Work on MS in a spreadsheet:
Excel workbook (a sheet per section, ten years by column, charts, links to the filings) ·
CSV.
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