Securities Based Loans

2022 Plan Information

Securities Based Lending for Morgan Stanley Employees

Whether you want to buy a home, finance a tax obligation, fund education or cover other expenses, a securities based loan may offer a convenient way to access funds.1 Securities based loans (including margin), provide access to a flexible line of credit that, as applicable, uses eligible securities in your brokerage account as collateral. Liquidity Access Line and Line of Credit are available for applicants who qualify.

One Line, Many Uses

Securities based loans are designed to provide access to funds while helping to keep your investment strategy intact. You may use these loans to finance a variety of needs, including:

  • Home purchases or improvements
  • Tax obligations
  • Education expenses
  • Debt consolidation

Borrowing against securities may not be appropriate for everyone. You should be aware that there are risks associated with a securities based loan, including possible maintenance calls on short notice, and that market conditions can magnify any potential for loss. For details, see important disclosures at the bottom of this page.

Employee Offers

Employee Offer (available to MSSB and E*TRADE Securities Clients who qualify)

Morgan Stanley/E*TRADE employees are eligible for a 75-basis point discount on published rates for securities based lending products, which include:

Morgan Stanley

  • Liquidity Access Line
  • Margin (exception referred to as a “Preferred Rate”)

E*TRADE

  • Line of Credit
  • Margin

Discount applies to Variable Interest Rate and New Fixed Rate Advance Requests while employed at Morgan Stanley/E*TRADE. Employee discount cannot be combined with existing discounted rates available to Morgan Stanley/E*TRADE clients. See Important Considerations below for more details.

Getting Started

Contact your current Financial Advisor (FA), or if you are looking for an FA, email EmployeeConcierge.

Important Considerations

  • Employee exceptions/preferred rates are only applicable to the published rates
    • Exceptions may not be applied to promotional rates
    • Exceptions may not be combined with negotiated exceptions
  • Exception will remain valid as long as the individual remains an employee of Morgan Stanley and/or the employee exception program is in place
  • For an E*TRADE employee with an existing account:
    • The exception will be automatically applied during the April billing cycle
    • If employee has an existing negotiated exception, the better of the employee exception or the existing exception will be applied
    • The employee exception will not be applied retroactively
  • A new employee account opened on/after April 1, 2021, will receive the employee exception unless the employee negotiates an exception
  • An employee may be eligible for an exception greater than 75 bps through the BAU exception pricing process
1A non-purpose, securities based loan cannot be used to purchase, trade or carry securities or margin stock, as applicable.  Proceeds from the Line of Credit may not be used to purchase securities or pay down margin loans and may not be deposited into an E*TRADE Securities LLC account, or into another brokerage account.
Borrowing against securities may not be appropriate for everyone. You must make your clients aware that there are risks associated with a securities based loan, including possible maintenance calls on short notice, and that market conditions can magnify any potential for loss. For details please see the important disclosures below.
Important Risk Information for Securities Based Lending: You need to understand that: (1) Sufficient collateral must be maintained to support your loan(s) and to take future advances; (2) You may have to deposit additional cash or eligible securities on short notice; (3) Some or all of your securities may be sold without prior notice in order to maintain account equity at required maintenance levels. You will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term investment strategy and may result in adverse tax consequences or in additional fees being assessed; (4) Morgan Stanley Bank, N.A., Morgan Stanley Private Bank, National Association or Morgan Stanley Smith Barney LLC (collectively referred to as Morgan Stanley) reserves the right not to fund any advance request due to insufficient collateral or for any other reason except for any portion of a securities based loan that is identified as a committed facility; (5) Morgan Stanley reserves the right to increase your collateral maintenance requirements at any time without notice; and (6) Morgan Stanley reserves the right to call securities based loans at any time and for any reason.
ABOUT MORGAN STANLEY OFFERINGS
Liquidity Access Line (LAL) is a securities based loan/line of credit product, the lender of which is either Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A., as applicable, each an affiliate of Morgan Stanley Smith Barney LLC. All LAL loans/lines of credit are subject to the underwriting standards and independent approval of Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A., as applicable. LAL loans/lines of credit may not be available in all locations. Rates, terms and conditions are subject to change without notice. To be eligible for an LAL loan/line of credit, a client must have a brokerage account at Morgan Stanley Smith Barney LLC that contains eligible securities, which shall serve as collateral for the LAL. In conjunction with establishing an LAL loan/line of credit, an LAL facilitation account will also be opened in the client’s name at Morgan Stanley Smith Barney LLC at no charge. Other restrictions may apply. The information contained herein should not be construed as a commitment to lend. Morgan Stanley Private Bank, National Association and Morgan Stanley Bank, N.A. are Members FDIC that are primarily regulated by the Office of the Comptroller of the Currency. The proceeds from a non-purpose LAL loan/line of credit (including draws and other advances) may not be used to purchase, trade or carry margin stock; repay margin debt that was used to purchase, trade or carry margin stock; and cannot be deposited into a Morgan Stanley Smith Barney LLC or other brokerage account.
Prepayment Fee: Borrower shall pay Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A. (“Bank”), as applicable, a prepayment fee if any portion of the principal on a Fixed Rate Advance is prepaid prior to the applicable Scheduled Payment Date(s), regardless of the reason that the Fixed Rate Advance is prepaid, and including, without limitation, as a result of a demand by the Bank or liquidation of collateral by the Bank. The Bank, in its sole discretion, can make a Variable Rate Advance and apply the proceeds to such prepayment fee. Interest will accrue on the unpaid portion of the debited amount at a variable interest rate until the amount is paid in full.
Margin Loans are investment products offered through Morgan Stanley Smith Barney LLC.  Margin Loans are securities based loans, which can be risky, and are not suitable for all investors.  To be eligible for a securities based loan, a client must have a brokerage account at Morgan Stanley Smith Barney LLC that contains eligible securities, which shall serve as collateral for the securities based loan.
ABOUT E*TRADE OFFERINGS
Line of Credit (“LOC”) is a securities based line of credit product, the lender of which is Morgan Stanley Private Bank, National Association, an affiliate of E*TRADE Securities LLC and Morgan Stanley Smith Barney LLC. All LOCs are subject to the underwriting standards and independent approval of Morgan Stanley Private Bank, National Association. The APR (Annual Percentage Rate) is calculated based on a 360-day year and includes both the interest rate and certain fees and other charges related to the loan. A processing fee, currently $10, will be charged for LOC payments made by check. Other bank fees that may apply can be found here. Your interest rate will be a variable rate based on an index plus a margin. The index is currently the sum of two components: 1) the 30-day rolling compounded average Secured Overnight Financing Rate (SOFR), as published by the Federal Reserve Bank of New York and 2) a variable rate adjustment. The SOFR rate may be reset every business day (or the following business day in event of a holiday). The margin, or interest rate spread, is a percentage above the index. Your interest rate will increase or decrease based on changes in the index.
LOC may not be available in all locations. Rates, terms and conditions are subject to change without notice. If any of the pledged collateral for your Line of Credit is held in a managed portfolio, failure to satisfy a maintenance call may result in the termination of any applicable advisory agreement. To be eligible for a LOC, a client must have a brokerage account at E*TRADE Securities LLC that contains eligible securities, which shall serve as collateral for the LOC. Other restrictions may apply. The information contained herein should not be construed as a commitment to lend. Morgan Stanley Private Bank, National Association is a Member FDIC that is primarily regulated by the Office of the Comptroller of the Currency. The proceeds from a LOC (including draws and other advances) may not be used to purchase, trade, or carry margin stock; repay margin debt that was used to purchase, trade, or carry margin stock; and cannot be deposited into an E*TRADE Securities LLC, Morgan Stanley Smith Barney LLC or other brokerage account.
Trading on margin involves risk, including the possible loss of more money than you have deposited. In addition, E*TRADE Securities can force the sale of any securities in your account without contacting you if your equity falls below required levels, and you are not entitled to an extension of time in the event of a margin call. For more information, please read the risks of trading on margin at etrade.com/margin.
When trading on margin, an investor borrows a portion of the funds they use to buy stocks to try to take advantage of opportunities in the market. They pay interest on the funds borrowed until the loan is repaid. For each trade made in a margin account, we use all available cash and sweep funds first and then charge the customer the current margin interest rate on the balance of the funds required to fill the order. The minimum equity requirement for a margin account is $2,000.
Morgan Stanley Smith Barney LLC and its affiliates and their employees (including Financial Advisors and Private Wealth Advisors) are not in the business of providing tax or legal advice. These materials and any statements contained herein should not be construed as tax or legal advice. Individuals should consult their personal tax advisor or attorney for matters involving taxation and tax planning and their attorney for matters involving personal trusts and estate planning.
Clients may be responsible for the fees of a third party law firm engaged to review complex transactions (e.g., review of trust agreements). Clients may also be charged a fee for the issuance of a letter of credit, for prepayment of principal on fixed rate advances, and upon a client’s request for certain cash management services (e.g., duplicate statement or check re-order).
Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, Member SIPC, and not a bank. Where appropriate, Morgan Stanley Smith Barney LLC has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services.
Investment, insurance and annuity products offered through Morgan Stanley Smith Barney LLC are: NOT FDIC INSURED | MAY LOSE VALUE | NOT BANK GUARANTEED | NOT A BANK DEPOSIT | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Investment Products • Not FDIC Insured • No Bank Guarantee • May Lose Value
Securities, investment advisory, commodity futures, options on futures and other non-deposit investment products and services are not insured by the FDIC, are not deposits or obligations of, or guaranteed by, Morgan Stanley Bank, N.A. or Morgan Stanley Private Bank, National Association, and are subject to investment risk, including possible loss of the principal amount invested.
Securities products and services offered by E*TRADE Securities LLC, Member SIPC.

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