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Morgan Stanley International Smallcap Fund – ‘NSAR-BT’ for 5/31/07

On: Monday, 7/30/07, at 12:41pm ET · Effective: 7/30/07 · For: 5/31/07 · Accession #: 1325358-7-322 · File #: 811-07169

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 7/30/07  Morgan Stanley Int’l Smallcap Fd  NSAR-BT     5/31/07    2:16K                                    Toppan Merrill NSAR/FA
          → Morgan Stanley International SmallCap Fund ⇒ A (ISMAX) — B (ISMBX) — C (ISMCX) — I (ISMDX)

Annual-Transition Report by an Investment Company — Form N-SAR — ICA’40
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: NSAR-BT     Annual-Transition Report by an Investment Company     10±    42K 
 2: EX-99.77B ACCT LTTR  Opinion Letter                             HTML      7K

‘NSAR-BT’ — Annual-Transition Report by an Investment Company

SEC Info℠ rendering: Data from the Answer File, which may only contain updates to a prior Form N-SAR

Form N-SAR

Annual-Transition Report by an Open-End Investment Company

Report
Registrant: Morgan Stanley International Smallcap Fund — List all N-SARs

Annual Report for the 2nd-half period ended at fiscal year end: 5/31/07
Is this a Transition Report? Yes

Were there any Answer File errors in the Filing? None FoundNone Found by SEC InfoNot Checked by the FilerOne or more Found by SEC Info
Was the Answer File completed by the Registrant? Yes

Is this an Amendment to a previous Report? No
Is this a change to a previous Report? No
Registrant
1. SEC CIK: 921892
SEC File #: 811-07169

Telephone #: 212-762-5260
2. Address: 522 Fifth Avenue
New York, NY 10036
3. Is this the first Form N-SAR filed by the Registrant? No
4. Is this the final Form N-SAR filed by the Registrant? No
Funds/Series ↑Top of Form N-SAR
7. Is the Registrant a Funds/Series (multiple portfolios) company? No
Investment Adviser
8.1 Name: Morgan Stanley Investment Advisors Inc.
Role: Adviser
SEC File #: 801-42061
Location: New York, NY
8.2 Name: Morgan Stanley Investment Management Ltd.
Role: Sub-Adviser
SEC File #: 801-15757
Location: London
United Kingdom
Administrator
10.1 Name: Morgan Stanley Services Co. Inc.
Location: Jersey City, NJ
Principal Underwriter
11.1 Name: Morgan Stanley Distributors Inc.
SEC File #: 008-45262
Location: New York, NY
Shareholder Servicing/Transfer Agent
12.1 Name: Morgan Stanley Trust
SEC File #: 084-05710
Location: Jersey City, NJ
Independent Public Accountant
13.1 Name: Deloitte & Touche LLP
Location: New York, NY
Affiliated Broker/Dealer
14.1 Name: Arab Malaysia Securities
14.2 Name: China International Capital Corp. Ltd.
14.3 Name: HC Securities
14.4 Name: JM MS Fixed Income Securities Private Ltd.
14.5 Name: JM Morgan Stanley Private Ltd.
14.6 Name: JM Morgan Stanley Securities Private Ltd.
14.7 Name: JM Morgan Stanley Retail Services Private Ltd.
14.8 Name: Morgan Stanley & Co. Inc.
SEC File #: 008-15869
14.9 Name: Morgan Stanley & Co. Ltd.
14.10 Name: Morgan Stanley Asia Ltd.
14.11 Name: Morgan Stanley Canada Ltd.
14.12 Name: Morgan Stanley Quilter Ltd.
14.13 Name: MS Dean Witter Australia Securities Ltd.
14.14 Name: Morgan Stanley Japan Ltd.
14.15 Name: Van Kampen Funds Inc.
SEC File #: 008-19412
14.16 Name: Morgan Stanley, S.V., S.A.
14.17 Name: Morgan Stanley DW Inc.
SEC File #: 008-14172
14.18 Name: Morgan Stanley International Ltd.
14.19 Name: Morgan Stanley Securities Ltd.
14.20 Name: Morgan Stanley Bank AG
14.21 Name: Morgan Stanley Distribution Inc.
SEC File #: 008-44766
14.22 Name: Morgan Stanley Distributors Inc.
SEC File #: 008-45262
14.23 Name: Morgan Stanley Market Products Inc.
SEC File #: 008-37795
14.24 Name: MS Securities Services Inc.
SEC File #: 008-26804
14.25 Name: Prime Dealer Services Corp.
SEC File #: 008-47025
Custodian
15.1 Name: JPMorgan Chase Bank
Role: Custodian
Location: Brooklyn, NY

Type of custody: Section 17(f)(1) — Bank
18. Does the Registrant’s/Series’ Custodian(s) maintain some or all of the
Registrant’s/Series’ securities in a central depository or book-entry
system pursuant to Rule 17f-4? Yes
Family of Investment Companies
19. Is the Registrant/Series part of a “family” of investment companies? Yes

Total number of registered management investment companies, Series
and portfolios (excluding any Unit Investment Trusts) in the family: 98

The Identification Code of the family for Form N-SAR Filings: MORGANSTAN
Brokerage Commissions Paid on Portfolio Transactions
20. The brokers who received the largest amount of gross brokerage
commissions during the period:
20.1 Broker: KBC Financial Products
IRS #: 13-4083415
Commissions paid ($000s): 17
20.2 Broker: Tokyo Mitsubishi International
Commissions paid ($000s): 6
20.3 Broker: Citigroup Global Markets Inc.
IRS #: 11-2418191
Commissions paid ($000s): 6
20.4 Broker: Macquerie Equitires Ltd.
Commissions paid ($000s): 5
20.5 Broker: Berenberg Bank, Hamburg
Commissions paid ($000s): 5
20.6 Broker: Nomura Securities International Inc.
IRS #: 13-2642206
Commissions paid ($000s): 5
20.7 Broker: Credit Suisse Securities USA
IRS #: 13-5659485
Commissions paid ($000s): 5
20.8 Broker: Handelsbanken Market Securities
Commissions paid ($000s): 4
20.9 Broker: Merrill Lynch, Pierce, Fenner & Smith Inc.
IRS #: 13-5674085
Commissions paid ($000s): 3
20.10 Broker: Dresdner Kleinwort Wasserstein
IRS #: 13-3894311
Commissions paid ($000s): 3
21. Total brokerage commissions paid by the Registrant during the period:
Aggregate paid ($000s): 106
Portfolio Transactions with Entities Acting as Principals
22. The entities acting as principals with whom the Registrant did the
largest amount of portfolio transactions, based on total value of
principal, during the period:
22.1 Entity: Credit Suisse Securities USA
IRS #: 13-5659485
Registrant’s purchases ($000s): 112,491
22.2 Entity: UBS Financial Services Inc.
IRS #: 13-3873456
Registrant’s purchases ($000s): 40,736
22.3 Entity: MS Institutional Liquidity Fund – Money Market Portfolio
IRS #: 30-6067219
Registrant’s purchases ($000s): 3,872
Registrant’s sales ($000s): 3,577
22.4 Entity: Goldman Sachs & Co.
IRS #: 13-5108880
Registrant’s purchases ($000s): 439
22.5 Entity: Citigroup Global Merkets Inc.
IRS #: 13-2771536
Registrant’s purchases ($000s): 371
Registrant’s sales ($000s): 7
22.6 Entity: Nomura Securities International Inc.
IRS #: 13-2642206
Registrant’s purchases ($000s): 164
22.7 Entity: Enskilda Securities
IRS #: 13-3497509
Registrant’s purchases ($000s): 122
22.8 Entity: Abn Amro Securities LLC
IRS #: 13-3227945
Registrant’s sales ($000s): 27
22.9 Entity: Cazenove & Co.
IRS #: 94-1658752
Registrant’s sales ($000s): 6
23. Total purchase/sale transactions by the Registrant during the period:
Aggregate purchases ($000s): 158,441
Aggregate sales ($000s): 3,801
Holdings of Securities Issued by Registrant’s/Series’ Brokers or Dealers
24. At period end, did the Registrant/Series hold any securities of the
Registrant’s/Series’ regular brokers or dealers, or of the parents of
such brokers or dealers, that derive more than 15% of gross revenue from
securities-related activities? No
Considerations which Affected the Participation of Brokers or Dealers
26. Considerations which affected the participation of brokers or dealers or
other entities in commissions or other compensation paid on portfolio
transactions of the Registrant:

Consideration?
Sales of the Registrant’s/Series’ shares ............................... No
Receipt of investment research and statistical info .................... Yes
Receipt of quotations for portfolio valuations ......................... No
Ability to execute portfolio transactions to obtain the best price
and execution ........................................................ Yes
Receipt of telephone line and wire services ............................ No
Broker or Dealer which is an affiliated person ......................... Yes
An arrangement to return or credit part or all of commissions or
profits thereon...
To an Investment Adviser or Principal Underwriter, or to an
affiliated person of either ...................................... No
To the Registrant .................................................. No
Other .................................................................. No
Investment Company Type
27. Is the Registrant an “open-end” investment company? Yes, Open-End
Sales and Repurchases
28. Monthly total Net Asset Value (NAV) of sales and repurchases of the
Registrant’s/Series’ shares:
1st Month of period: ($000s)
Total NAV of shares sold:
New sales (including exchanges) ............................ 170
Reinvestment of dividends and distributions ................ 18,532
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 1,534
2nd Month:
Total NAV of shares sold:
New sales (including exchanges) ............................ 919
Reinvestment of dividends and distributions ................ –
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 2,164
3rd Month:
Total NAV of shares sold:
New sales (including exchanges) ............................ 817
Reinvestment of dividends and distributions ................ –
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 1,312
4th Month:
Total NAV of shares sold:
New sales (including exchanges) ............................ 352
Reinvestment of dividends and distributions ................ –
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 1,875
5th Month:
Total NAV of shares sold:
New sales (including exchanges) ............................ 419
Reinvestment of dividends and distributions ................ –
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 1,341
6th Month:
Total NAV of shares sold:
New sales (including exchanges) ............................ 294
Reinvestment of dividends and distributions ................ –
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 2,431

Total of all months: ($000s)
Total NAV of shares sold:
New sales (including exchanges) ............................ 2,971
Reinvestment of dividends and distributions ................ 18,532
Other ...................................................... –
Total NAV of shares redeemed & repurchased (inc. exchanges) .. 10,657

Total NAV of the Registrant’s/Series’ share sales during the period
subject to a sales load ($000s): 2,847
Sales Load (Front-End or Deferred) and Fees (Redemption or Maintenance)
29. Was a front-end sales load deducted from any share sales during the
period? Yes
30. Total front-end sales loads collected from sales (including exchanges)
by Principal Underwriter or by any underwriter which is an affiliated
person of the Principal Underwriter, of the Registrant’s/Series’ shares
during the period ($000s): 3

The maximum sales load rate in effect at period end as a percentage of
the offering price: 5.25%
The minimum sales load rate in effect at period end as a percentage of
the offering price: 0.0%
31. Net amount retained by the Registrant’s/Series’ Principal Underwriter or
by any underwriter or dealer which is an affiliated person of the
Principal Underwriter thereof from front-end sales loads collected from
sales of the Registrant’s/Series’ shares during the period ($000s): 0

Amount by which payout by the Registrant’s/Series’ Principal Underwriter
or by any underwriter which is an affiliated person of the Principal
Underwriter thereof to persons or entities selling the
Registrant’s/Series’ shares exceeded that reported in Item 30 ($000s): 0
32. Amount the Registrant’s/Series’ Principal Underwriter and any
underwriters or dealers which are affiliated persons of the Principal
Underwriter paid to dealers which are not affiliated persons of the
Principal Underwriter for selling the Registrant’s/Series’ shares that
were sold with a front-end sales load during the period ($000s): 0
33. Amount paid to a captive retail sales force of the Registrant’s/Series’
Principal Underwriter or of any underwriter or dealer which is an
affiliated person of the Principal Underwriter for selling the
Registrant’s shares that were sold with a front-end sales load during
the period ($000s): 3
34. Did the Registrant/Series impose a deferred or contingent deferred sales
load during the period? Yes
35. Total deferred or contingent deferred sales loads collected during the
period from redemptions and repurchases of the Registrant’s/Series’
shares ($000s): 39
36. Did the Registrant/Series retain all monies collected from the deferred
or contingent deferred sales loads during the period? No

The net amount the Registrant/Series retained from deferred or
contingent deferred sales loads ($000s): 0
37. Did the Registrant/Series impose a redemption fee other than a deferred
or contingent sales load during the period? Yes
38. Total amount of redemption fees other than deferred or contingent
deferred sales loads collected from redemptions and repurchases of the
Registrant’s/Series’ shares during the period ($000s): 0
39. Were any account maintenance fees or other administrative fees imposed
directly on shareholders during the period? No
Payment Plan for the Distribution of Fund Shares
40. During the period, did the Registrant/Series have a plan of distribution
adopted pursuant to Rule 12b-1? Yes
41. During the period, did the Registrant/Series use its assets directly to
make payments under the 12b-1 plan? Yes
42. For the period, the percentage of total dollars paid directly by the
Registrant/Series under the 12b-1 plan for each of the following:

Percentage of Total Amount Paid (%)
Advertising ............................................................ –
Printing & mailing of prospectuses to other than current shareholders .. –
Payments to underwriters ............................................... 100
Payments to brokers or dealers ......................................... –
Direct payments to sales personnel ..................................... –
Payments to banks and savings & loans .................................. –
Other uses, including payments to its Investment Adviser separate
from the advisory fee ................................................ –
Unallocated payments made for a combination of such services ........... –
43. Total amount paid directly by the Registrant/Series pursuant to its
12b-1 plan ($000s): 361
44. If an Investment Adviser or other affiliated person of the
Registrant/Series made unreimbursed payments pursuant to the 12b-1 plan,
the total amount of such payments ($000s): 0
Advisory Fee
45. Did the Registrant/Series have an advisory contract during the period? Yes
46. Did the Registrant/Series pay more than one Investment Adviser directly
for investment advice during the period? No
47. Was the Registrant’s/Series’ advisory fee based solely on a percentage
of its assets? Yes
48. Fee (single rate or step rates) applied to the Registrant’s/Series’
assets based on the advisory contract:
Single-fee rate: 0.0%
Step-fee rates:
For 1st $000s: 1,500,000
Annual rate: 0.95%
& Above $000s: 1,500,000
Annual rate: 0.9%
49. Was the Registrant’s/Series’ advisory fee during the period based solely
on a percentage of its income? No
50. Was the Registrant’s/Series’ advisory fee during the period based on
some combined percentage of its income and assets? No
51. Was the Registrant’s/Series’ advisory fee during the period based in
whole or in part on its investment performance? No
52. Was the Registrant’s/Series’ advisory fee during the period based in
whole or in part on the assets, income or performance of other
Registrants? No
53. Were the expenses of the Registrant/Series limited or reduced at any
time during the period by some agreement or understanding other than by
Blue Sky Laws? Yes

Was the limitation that applied during the period based on...
Assets? Yes
54. Indicated below are whether services were supplied or paid for wholly or
in substantial part by Investment Adviser(s) or Administrator(s) in
connection with the advisory or administrative contract(s) but for which
the Adviser(s) or Administrator(s) are not reimbursed by the Registrant:

Provided to the Registrant?
Occupancy and office rental ............................................ Yes
Clerical and bookkeeping services ...................................... Yes
Accounting services .................................................... Yes
Services of independent auditors ....................................... No
Services of outside counsel ............................................ No
Registration and filing fees ........................................... No
Stationery, supplies and printing ...................................... Yes
Salaries & compensation of Registrant’s interested Directors ........... Yes
Salaries & compensation of Registrant’s disinterested Directors ........ No
Salaries & compensation of Registrant’s Officers who aren’t Directors .. Yes
Reports to current shareholders ........................................ No
Determination of offering and redemption prices ........................ Yes
Trading department ..................................................... Yes
Prospectus preparation and printing for current shareholders ........... No
Other .................................................................. Yes
Miscellaneous Info
55. Did the Registrant/Series have any of the following outstanding at any
time during the period which exceeded 1% of aggregate net assets:
Overdrafts? Yes
Bank loans? No
56. During the period, did the Registrant’s/Series’ Investment Adviser(s)
have advisory clients other than investment companies? Yes
57. Did the Registrant/Series adjust the number of its shares outstanding by
means of a stock split or stock dividend? No
Classification and Asset Allocation
58. Is the Registrant/Series a Separate Account of an insurance company? No
59. Is the Registrant/Series a management investment company? Yes
60. Was the Registrant/Series a diversified investment company at any time
during the period? Yes

Was the Registrant/Series a diversified investment company at the end of
the period? Yes
61. The lowest minimum initial investment required by the Registrant/Series
from an investor that is not an employee or otherwise affiliated with
the Registrant/Series, its Investment Adviser, Principal Underwriter or
other affiliated entity: $100
62. Does the Registrant/Series invest primarily in debt securities,
including convertible debt securities, options & futures on debt
securities or indices of debt securities? No
66. Is the Registrant/Series a Fund that usually invests in equity
securities, options & futures on equity securities, indices of equity
securities or securities convertible into equity securities? Yes

Which best describes its primary investment objective:

Aggressive capital appreciation? No
Capital appreciation? No
Growth? Yes
Growth and income? No
Income? No
Total return? No
67. Is the Registrant/Series a “balanced” Fund? No
68. Does the Registrant/Series have more than 50% of its net assets at
period end invested in the securities of issuers...
Engaged primarily in production or distribution of precious metals? No
Located primarily in countries other than the United States? Yes
69. Is the Registrant/Series an index Fund? No
Investment Practices
70. Activities that are permitted by the Registrant’s/Series’ investment
policies, and which were engaged in during the period:

Activity Permitted Engaged In
Writing or investing in repurchase agreements? Yes to both
Writing or investing in options on equities? Yes No
Writing or investing in options on debt securities? Yes No
Writing or investing in options on stock indices? Yes No
Writing or investing in interest rate futures? Yes No
Writing or investing in stock index futures? Yes No
Writing or investing in options on futures? Yes No
Writing or investing in options on stock index futures? Yes No
Writing or investing in other commodity futures? Yes No
Investments in restricted securities? Yes No
Investments in shares of other investment companies? Yes to both
Investments in securities of foreign issuers? Yes to both
Currency exchange transactions? Yes to both
Loaning portfolio securities? Yes No
Borrowing of money? No –
Purchases/sales by certain exempted affiliated persons? Yes to both
Margin purchases? No –
Short selling? No –
Portfolio Turnover
71. Portfolio turnover rate for the period:
Purchases ($000s): 27,403
Sales ($000s): 46,148

Monthly average Value of portfolio ($000s): 70,877

Percent turnover (lesser of Purchases or Sales, divided by Value): 39%
Financial Info — Income and Expenses
72. The number of months covered by the values in Items 72 and 73: 12

Income ($000s)
Net interest income .............................................. 40
Net dividend income .............................................. 1,642
Account maintenance fees ......................................... –
Net other income ................................................. –

Expenses ($000s)
Advisory fees .................................................... 675
Administrator fees ............................................... 57
Salaries and other compensation .................................. –
Shareholder Servicing Agent fees ................................. 105
Custodian fees ................................................... 94
Postage .......................................................... –
Printing expenses ................................................ 87
Directors’ fees .................................................. –
Registration fees ................................................ 47
Taxes ............................................................ –
Interest ......................................................... –
Bookkeeping fees paid to anyone performing this service .......... 59
Auditing fees .................................................... 43
Legal fees ....................................................... –
Marketing/distribution payments, incl. Rule 12b-1 plan payments .. 361
Amortization of organization expenses ............................ –
Shareholder meeting expenses ..................................... –
Other expenses ................................................... 30
Total expenses ................................................... 1,558

Expense reimbursements ($000s): 95

Net investment income ($000s): 219

Realized capital gains ($000s): 15,621
Realized capital losses ($000s): 2,098

Net unrealized appreciation during the period ($000s): 0
Net unrealized depreciation during the period ($000s): 2,306

Total income dividends for which the record date passed during the
period ($000s): 601
Dividends for a second class of shares ($000s): 192

Total capital gains distributions for which the record date passed
during the period ($000s): 19,701
73. Distributions per share for which the record date passed during the
period, shown in fractions of a cent, if so declared:

Dividends from net investment income: $0.0000

Distribution of capital gains: $4.4686
Other distributions: $0.0000
Financial Info — Condensed Balance Sheet Data
74. Assets ($000s)
Cash ............................................................. 18
Repurchase agreements ............................................ –
Short-term debt securities, other than repurchase agreements ..... 300
Long-term debt securities, including convertible debt ............ –
Preferred, conv. preferred and adjustable-rate preferred stock ... 836
Common stock ..................................................... 68,829
Options on equities .............................................. –
Options on all futures ........................................... –
Other investments ................................................ –
Receivables from portfolio instruments sold ...................... 461
Receivables from affiliated persons .............................. –
Other receivables ................................................ 168
All other assets ................................................. 36
Total assets ..................................................... 70,648

Liabilities ($000s)
Payables for portfolio instruments purchased ..................... 316
Amounts owed to affiliated persons ............................... 104
Senior long-term debt ............................................ –
Other liabilities:
Reverse repurchase agreements .................................. –
Short sales .................................................... –
Written options ................................................ –
All other liabilities .......................................... 158

Equity ($000s)
Senior equity .................................................... –
Net assets of common shareholders ................................ 70,070

Number of shares outstanding (000s): 4,424
Number of shares outstanding of a second class of shares (000s): 1,002

Net Asset Value (NAV) per share (to nearest cent): $0

Total number of shareholder accounts: 6,040

Total value of assets in segregated accounts ($000s): 0
75. Monthly average net assets during the period ($000s): 71,083
Additional Disclosures
77. Did the Registrant file any additional Exhibits with the filing of this
Report (listed here and filed either herewith — as one of the ‘EX-99.*’
↑Exhibits in this Filing — or separately and incorporated by reference)? Yes

EX-99.77B: Accountant’s Report re: Internal Controls? Yes
Subsidiaries
78. Does the Registrant have any wholly-owned investment company
subsidiaries whose operating and financial data are consolidated with
that of the Registrant in this Report? No
Fidelity Bond in Effect at Fiscal Year End
80. Insurer: ICI
2nd Insurer: XL, Federal Ins. Co. & Others

Aggregate face amount of coverage for the Registrant/Series on all bonds
on which it is named as an insured ($000s): 10,000
81. Is the bond part of a joint fidelity bond(s) shared with other
investment companies or other entities? Yes

How many other investment companies or other entities are covered by the
bond (counting each Fund/Series as a separate investment company): 97
82. Does the mandatory coverage of the fidelity bond have a deductible? Yes

The amount of the deductible ($000s): 150
83. Were any claims with respect to this Registrant/Series filed under the
bond during the period? No
84. Were any losses incurred with respect to this Registrant/Series that
could have been filed as a claim under the fidelity bond but were not? No
85. Are the Registrant’s/Series’ Officers and Directors covered as Officers
and Directors of the Registrant/Series under any errors and omissions
insurance policy owned by the Registrant/Series or anyone else? Yes

Were any claims filed under such policy during the period with respect
to the Registrant/Series? No
Signature ↑Top of Form N-SAR
/s/ Loren Scheider
Name: Loren Scheider
Title: Supervisor

↑Top

Filing Submission 0001325358-07-000322 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Morgan Stanley International Smallcap Fund – ‘NSAR-BT’ for 5/31/07

On: Monday, 7/30/07, at 12:41pm ET · Effective: 7/30/07 · For: 5/31/07 · Accession #: 1325358-7-322 · File #: 811-07169

Annual-Transition Report by an Investment Company — Form N-SAR — ICA’40Filing Table of Contents

‘NSAR-BT’ — Annual-Transition Report by an Investment Company

Annual-Transition Report by an Investment Company — Form N-SAR — ICA’40
Filing Table of Contents