Morgan Stanley announced Wednesday that it has expanded its prime brokerage offering by introducing custodial services for long securities held by prime brokerage clients.
The custodial services will be provided directly by Morgan Stanley Trust, a national chartered trust company.
"Recent market events have increased the demand for solutions that mitigate counterparty risk for hedge funds," Rich Portogallo, the head of institutional clients and services at Morgan Stanley, said in a press release. "The launch of new custodial services … underscores Morgan Stanley's commitment to providing hedge fund managers and investors with alternative asset protection solutions in addition to our best-in-class financing services and technology."
Morgan Stanley Trust, which is regulated by the Office of the Comptroller of the Currency, gives clients the option to hold their long securities with a Morgan Stanley subsidiary that is independent from Morgan Stanley's U.S. and U.K. broker-dealers.