Morgan Stanley mulls seeking regulatory nod for share buyback: WSJ

Tue Dec 11, 2012 11:51am IST

Morgan Stanley's New York headquarters are seen at the corner of 48th Street and Broadway in New York May 22, 2012. REUTERS/Andrew Burton

Morgan Stanley's New York headquarters are seen at the corner of 48th Street and Broadway in New York May 22, 2012.

Credit: Reuters/Andrew Burton

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(Reuters) - Morgan Stanley might seek approval from the Federal Reserve to repurchase shares for the first time in four years, the Wall Street Journal reported, citing people familiar with the firm's thinking.

The bank, which last bought back shares in 2008, could make the request when it submits plans for its annual stress test in January, the Journal said.

Regular stress tests are part of a more rigorous regime required by the 2010 Dodd-Frank financial oversight law. They are designed to ensure banks have enough capital cushions and are not being overly aggressive in returning cash to shareholders.

"There's an incentive to push for what you can get, but you also don't want" to get denied, a Morgan Stanley official told the Journal.

In March, Citigroup and MetLife led a list of financial institutions that failed to get permission to repurchase shares.

As of September 30, Morgan Stanley had about $1.6 billion remaining under its current share repurchase authorization, according to a filing with the U.S. Securities and Exchange Commission. Share repurchases by the company are subject to regulatory approval, the bank said in the filing.

Morgan Stanley could not be reached for comment by Reuters outside of regular business hours.

(Reporting by Tej Sapru in Bangalore; additional reporting by Sakthi Prasad; Editing by Chris Gallagher)

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