Morgan Stanley 2015 Annual Report Download - page 28

International Risk.
We are subject to numerous political, economic, legal, operational, franchise and other risks as a result of our
international operations which could adversely impact our businesses in many ways.
We are subject to political, economic, legal, 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 and levies and other restrictive governmental actions, as well as the outbreak of hostilities or political and
governmental instability. In many countries, the laws and regulations applicable to the securities and financial services
industries are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local laws in every
market. 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 enhanced risk
that transactions we structure might not be legally enforceable in all cases.
Various emerging market countries have experienced severe political, economic and financial disruptions, including
significant devaluations of their currencies, defaults or potential defaults on sovereign debt, capital and currency exchange
controls, high rates of inflation and low or negative growth rates in their economies. Crime and corruption, as well as issues
of security and personal safety, also exist in certain of these countries. These conditions could adversely impact our
businesses and increase volatility in financial markets generally.
The emergence of a disease pandemic or other widespread health emergency, or concerns over the possibility of such an
emergency as well as natural disasters, terrorist activities or military actions, could create economic and financial disruptions
in emerging markets and other areas throughout the world, and could lead to operational difficulties (including travel
limitations) that could impair our ability to manage our businesses around the world.
As a U.S. company, we are required to comply with the economic sanctions and embargo programs administered by OFAC
and similar multi-national bodies and governmental agencies worldwide, as well as applicable anti-corruption laws in the
jurisdictions in which we operate, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. A violation of a
sanction, embargo program, or anti-corruption law could subject us, and individual employees, to a regulatory enforcement
action as well as significant civil and criminal penalties.
Acquisition, Divestiture and Joint Venture Risk.
We may be unable to fully capture the expected value from acquisitions, divestitures, joint ventures, minority stakes and
strategic alliances.
In connection with past or future acquisitions, divestitures, joint ventures or strategic alliances (including with Mitsubishi
UFJ Financial Group, Inc.), we face numerous risks and uncertainties combining, transferring, separating or integrating the
relevant businesses and systems, including the need to combine or separate accounting and data processing systems and
management controls and to integrate relationships with clients, trading counterparties and business partners. In the case of
joint ventures and minority stakes, we are subject to additional risks and uncertainties because we may be dependent upon,
and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our
control.
In addition, conflicts or disagreements between us and any of our joint venture partners may negatively impact the benefits to
be achieved by the relevant joint venture.
There is no assurance that any of our acquisitions or divestitures will be successfully integrated or disaggregated or yield all
of the positive benefits anticipated. If we are not able to integrate or disaggregate successfully our past and future
acquisitions or dispositions, there is a risk that our results of operations, financial condition and cash flows may be materially
and adversely affected.
Certain of our business initiatives, including expansions of existing businesses, may bring us into contact, directly or
indirectly, with individuals and entities that are not within our traditional client and counterparty base and may expose us to
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