UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2016 or

~~For~~¨ ~~the~~TRANSITION ~~quarterly~~REPORT ~~period~~PURSUANT ~~ended~~TO ~~September 30,~~SECTION ~~2015~~13 orOR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-50064

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

(Exact name of registrant as specified in its charter)

Delaware	~~Delaware~~	~~01-0710311~~	01-0710311
(State or other jurisdiction of incorporation or organization)	~~(State or other jurisdiction of incorporation or organization)~~	~~(I.R.S. Employer Identification No.)~~	(I.R.S. Employer Identification No.)
Ceres Managed Futures LLC
522 Fifth Avenue
New York, NY			10036
(Address of principal executive offices)			(Zip Code)
Registrant’s telephone number, including area code			(855) 672-4468

Ceres Managed Futures LLC
522 Fifth Avenue
New York, NY				10036
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code				(855) 672-4468

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. ~~(Check One):~~


Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer x		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~October~~April 3130, ~~2015~~2016, 1,~~816~~677,~~337~~534.~~458~~114 Limited Partnership Units were outstanding.

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2015


	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Statements of Financial Condition as of March 31, 2016 and December 31, 2015 (Unaudited)	2

	Condensed Schedule of Investments as of March 31, 2016 (Unaudited)	3

	Condensed Schedule of Investments as of December 31, 2015	4

	Statements of Income and Expenses for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	5

	Statements of Changes in Partners’ Capital for the Three Months Ended March 31, 2016 and 2015 (Unaudited)	6

	Notes to Financial Statements (Unaudited)	7-18

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19-22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23-26

Item 4.	Controls and Procedures	27

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	28-35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Securities and Use of Proceeds	36

Item 4.	Mine Safety Disclosures	36

Item 6.	Exhibits	37

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Statements of Financial Condition as of September 30, 2015 (Unaudited) and December 31, 2014	2
	Condensed Schedule of Investments as of September 30, 2015 (Unaudited)	3
	Condensed Schedule of Investments as of December 31, 2014	4
	Statements of Income and Expenses for the Three and Nine Months Ended September 30, 2015 and 2014 (Unaudited)	5
	Statements of Changes in Partners’ Capital for the Nine Months Ended September 30, 2015 and 2014 (Unaudited)	6
	Notes to Financial Statements (Unaudited)	7-19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20-24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25-29
Item 4.	Controls and Procedures	30
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	31-37
Item 1A.	Risk Factors	38
Item 4.	Mine Safety Disclosures	38
Item 6.	Exhibits	38

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

STATEMENTS OF FINANCIAL CONDITION

	(Unaudited) September 30, 2015		December 31, 2014
	$		$
ASSETS
Trading Equity:
Investment in U.S. Treasury bills, at fair value (amortized cost $14,969,765 and $0, respectively)		14,970,257		-
Unrestricted cash		6,146,954		22,998,465
Restricted cash		1,674,114		2,100,772
Net unrealized gain on open contracts		342,570		1,293,243
Total Trading Equity		23,133,895		26,392,480
Interest receivable		19		118
Total Assets		23,133,914		26,392,598
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Redemptions payable to Limited Partners		202,187		262,478
Redemptions payable to General Partner		25,000		-
Accrued ongoing placement agent fees		38,157		41,938
Accrued General Partner fees		38,157		41,938
Accrued management fees		28,618		31,454
Total Liabilities		332,119		377,808
Partners’ Capital:
Limited Partners (1,854,224.892 and 2,022,565.842 Units, respectively)		22,556,248		25,731,841
General Partner (20,184.324 and 22,240.245 Units, respectively)		245,547		282,949
Total Partners’ Capital		22,801,795		26,014,790
Total Liabilities and Partners’ Capital		23,133,914		26,392,598
NET ASSET VALUE PER UNIT		12.16		12.72

(Unaudited)


	March 31,		December 31,
	2016		2015
ASSETS
Equity in trading account:
Investment in U.S. Treasury bills, at fair value (amortized cost $8,498,149 and $15,499,510 at March 31, 2016 and December 31, 2015, respectively)	$	8,499,734	$	15,498,983
Unrestricted cash		10,219,804		4,372,856
Restricted cash		2,390,907		2,434,648
Net unrealized appreciation on open futures contracts		379,307		-
Net unrealized appreciation on open forward contracts		3,319		-

Total equity in trading account		21,493,071		22,306,487

Cash at bank		833		-
Interest receivable		1,870		605

Total assets	$	21,495,774	$	22,307,092


LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Net unrealized depreciation on open futures contracts	$	-	$	190,939
Net unrealized depreciation on open forward contracts		-		57,817
Redemptions payable to Limited Partners		440,874		278,476
Accrued expenses:
Ongoing placement agent fees		37,067		38,090
General Partner fees		37,067		38,090
Management fees		27,801		28,569

Total liabilities		542,809		631,981


Partners’ Capital:
Limited Partners (1,721,646.039 and 1,774,475.344 Units outstanding at March 31, 2016 and December 31, 2015, respectively)		20,710,153		21,431,326
General Partner (20,184.324 Units outstanding at March 31, 2016 and December 31, 2015)		242,812		243,785

Total partners’ capital (net asset value)		20,952,965		21,675,111

Total liabilities and partners’ capital	$	21,495,774	$	22,307,092

NET ASSET VALUE PER UNIT	$	12.03	$	12.08

The accompanying notes are an integral part of these financial statements.

- 2 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

CONDENSED SCHEDULE OF INVESTMENTS

~~September~~March 3031, ~~2015~~2016 ~~(Unaudited)~~

Futures and Forward Contracts Purchased			Fair Value		% of Partners’ Capital
				$
Commodity				(31,991)		(0.14)
Equity				(45,415)		(0.20)
Foreign currency				(549,727)		(2.41)
Interest rate				181,179		0.79
Total Futures and Forward Contracts Purchased				(445,954)		(1.96)
Futures and Forward Contracts Sold
Commodity				218,467		0.96
Equity				2,671		0.01
Foreign currency				573,517		2.52
Interest rate				(6,131)		(0.03)
Total Futures and Forward Contracts Sold				788,524		3.46
Net unrealized gain on open contracts				342,570		1.50
U.S. Government securities
Face Amount	Maturity Date	Description	Fair Value		% of Partners’ Capital
$ 14,970,000	10/15/2015	U.S. Treasury bills, 0.005% (amortized cost of $14,969,765)		14,970,257		65.65
Net Fair Value				15,312,827		67.15

(Unaudited)


	Notional ($)/ Number of Contracts		Fair Value		% of Partners’ Capital
Futures Contracts Purchased
Commodity		51	$	(12,610)		(0.06)	%
Equity		88		13,924		0.07
Interest rate		384		284,869		1.36

Total futures contracts purchased				286,183		1.37

Futures Contracts Sold
Commodity		281		93,605		0.45
Equity		89		24,194		0.11
Interest rate		176		(24,675)		(0.12)

Total futures contracts sold				93,124		0.44

Net unrealized appreciation on open futures contracts			$	379,307		1.81	%

Unrealized Appreciation on Open Forward Contracts
Commodity		60	$	55,289		0.27	%
Foreign currency	$	74,025,374		1,311,628		6.26

Total unrealized appreciation on open forward contracts				1,366,917		6.53

Unrealized Depreciation on Open Forward Contracts
Commodity		40		(44,741)		(0.21)
Foreign currency	$	67,052,741		(1,318,857)		(6.30)

Total unrealized depreciation on open forward contracts				(1,363,598)		(6.51)

Net unrealized appreciation on open futures contracts			$	3,319		0.02	%


U.S. Government Securities

Face Amount

Maturity Date

Description

Fair Value

% of Partners’
Capital

U.S. Treasury bills, 0.28% (amortized cost

$ 8,500,000

4/14/2016

of $8,498,149)

8,499,734

40.57

The accompanying notes are an integral part of these financial statements.

- 3 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

CONDENSED SCHEDULE OF INVESTMENTS

December 31, ~~2014~~2015

Futures and Forward Contracts Purchased	Fair Value		% of Partners’ Capital
	$
Commodity		(113,739)		(0.44)
Equity		7,721		0.03
Foreign currency		(717,451)		(2.76)
Interest rate		616,313		2.37
Total Futures and Forward Contracts Purchased		(207,156)		(0.80)
Futures and Forward Contracts Sold
Commodity		266,088		1.02
Equity		(3,572)		(0.01)
Foreign currency		1,236,120		4.75
Interest rate		1,763		0.01
Total Futures and Forward Contracts Sold		1,500,399		5.77
Net unrealized gain on open contracts		1,293,243		4.97
Net Fair Value		1,293,243		4.97

(Unaudited)


	Notional ($)/ Number of Contracts		Fair Value		% of Partners’ Capital
Futures Contracts Purchased
Commodity		43	$	3,021		0.01	%
Equity		66		(13,248)		(0.06)
Interest rate		256		(4,446)		(0.02)

Total futures contracts purchased				(14,673)		(0.07)

Futures Contracts Sold
Commodity		448		(178,528)		(0.82)
Equity		79		(217)		(0.00)	*
Interest rate		252		2,479		0.01

Total futures contracts sold				(176,266)		(0.81)

Net unrealized depreciation on open futures contracts			$	(190,939)		(0.88)	%

Unrealized Appreciation on Open Forward Contracts
Commodity		32	$	26,107		0.12	%
Foreign currency	$	76,943,413		1,238,301		5.71

Total unrealized appreciation on open forward contracts				1,264,408		5.83

Unrealized Depreciation on Open Forward Contracts
Commodity		126		(135,773)		(0.63)
Foreign currency	$	70,802,583		(1,186,452)		(5.47)

Total unrealized depreciation on open forward contracts				(1,322,225)		(6.10)

Net unrealized depreciation on open futures contracts			$	(57,817)		(0.27)	%


U.S. Government Securities

Face Amount

Maturity Date

Description

Fair Value

% of Partners’
Capital

U.S. Treasury bills, 0.0125% (amortized cost

$ 15,500,000

1/21/2016

of $15,499,510)

15,498,983

71.51

* Due to rounding.

The accompanying notes are an integral part of these financial statements.

- 4 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

STATEMENTS OF INCOME AND EXPENSES

(Unaudited)

	For the Three Months Ended				~~For the Nine Months Ended~~
	September 30,				September 30,
	March 31,
	2015		2014		2015		2014
	2016		2015
	$		$		$		$
INVESTMENT INCOME
INVESTMENT INCOME
Interest income	$	10,750	$	469
Interest income		696		630		1,556		3,634
EXPENSES
EXPENSES
General Partner fees		110,089		133,375
General Partner fees		115,002		-		380,317		-
Ongoing placement agent fees		110,089		133,375
Ongoing placement agent fees		115,002		-		380,317		-
Management fees		82,568		100,032
Management fees		86,252		87,014		285,238		374,072
Total expenses		302,746		366,782
Brokerage fees		-		232,038		-		993,118
NET INVESTMENT LOSS		(291,996)		(366,313)
Total Expenses		316,256		319,052		1,045,872		1,367,190
TRADING RESULTS
NET INVESTMENT LOSS		(315,560)		(318,422)		(1,044,316)		(1,363,556)
Net gains (losses) on trading of commodity interests:
TRADING RESULTS
Net realized gains (losses) on closed contracts		(418,435)		2,965,746
Trading profit (loss):
Net change in unrealized gains (losses) on open contracts		630,728		(339,778)
Net realized		(2,322,317)		2,215,029		(1,449,619)		743,754
Total trading results		212,293		2,625,968
Net change in unrealized		3,348,708		1,211,498		1,450,696		887,501
NET INCOME (LOSS)	$	(79,703)	$	2,259,655
Total Trading Results		1,026,391		3,426,527		1,077		1,631,255
NET INCOME (LOSS) ALLOCATION
NET INCOME (LOSS)		710,831		3,108,105		(1,043,239)		267,699
Limited Partners	$	(78,730)	$	2,234,876
NET INCOME (LOSS) ALLOCATION
General Partner	$	(973)	$	24,779
Limited Partners		702,646		3,060,995		(1,030,837)		257,938
NET INCOME (LOSS) PER UNIT*
General Partner		8,185		47,110		(12,402)		9,761
Limited Partners	$	(0.05)	$	1.12
NET INCOME (LOSS) PER UNIT*
General Partner	$	(0.05)	$	1.12
Limited Partners		0.36		1.38		(0.56)		0.57
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING		1,786,861.611		2,020,224.157
General Partner		0.36		1.38		(0.56)		0.57
	Units		Units		Units		Units
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING		1,915,669.300		2,338,767.592		1,968,538.748		2,798,604.317

*	Represents the change in net asset value per Unit during the period.

The accompanying notes are an integral part of these financial statements.

- 5 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015

(Unaudited)

	Units of Partnership Interest		Limited Partners		General Partner		Total
	Units of
			$		$		$
	Partnership		Limited		General
Partners’ Capital, December 31, 2014		2,044,806.087		25,731,841		282,949		26,014,790
	Interest		Partners		Partner		Total
Net Loss		-		(1,030,837)		(12,402)		(1,043,239)
Partners’ Capital, December 31, 2015		1,794,659.668	$	21,431,326	$	243,785	$	21,675,111
Redemptions		(170,396.871)		(2,144,756)		(25,000)		(2,169,756)
Net income (loss)		-		(78,730)		(973)		(79,703)
Partners’ Capital, September 30, 2015		1,874,409.216		22,556,248		245,547		22,801,795
Redemptions		(52,829.305)		(642,443)		-		(642,443)
Partners’ Capital, December 31, 2013		3,380,844.137		35,145,985		487,734		35,633,719
Partners’ Capital, March 31, 2016		1,741,830.363	$	20,710,153	$	242,812	$	20,952,965
Net Income		-		257,938		9,761		267,699
Partners’ Capital, December 31, 2014		2,044,806.087	$	25,731,841	$	282,949	$	26,014,790
Redemptions		(1,202,446.831)		(11,458,657)		(250,505)		(11,709,162)
Net income (loss)		-		2,234,876		24,779		2,259,655
Partners’ Capital, September 30, 2014		2,178,397.306		23,945,266		246,990		24,192,256
Redemptions		(62,086.887)		(840,503)		-		(840,503)
Partners’ Capital, March 31, 2015		1,982,719.200	$	27,126,214	$	307,728	$	27,433,942

The accompanying notes are an integral part of these financial statements.

- 6 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

September 30, 2015

(Unaudited)

1. Organization

Morgan Stanley Smith Barney Charter Campbell L.P. (the “Partnership”) is a Delaware limited partnership organized in 2002 to engage primarily in the speculative trading of futures contracts, options on futures and forward contracts, and forward contracts on physical commodities and other commodity interests, including, but not limited to, foreign currencies, financial instruments, metals, energy and agricultural products (collectively, “Futures Interests”) (refer to Note 5.4, Financial Instruments). The General Partner (defined below) may also determine to invest up to all of the Partnership’s assets in United States (“U.S.”) Treasury bills and/or money market mutual funds, including money market mutual funds managed by Morgan Stanley or its affiliates. The Partnership is one of the Morgan Stanley Charter series of funds, comprised of the Partnership, Morgan Stanley Smith Barney Charter Aspect L.P. and Morgan Stanley Smith Barney Charter WNT L.P.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (“Ceres” or the “General Partner”) and commodity pool operator for the Partnership. Ceres is a wholly-owned subsidiary of Morgan Stanley Smith Barney Holdings LLC (“MSSBH”). MSSBH is wholly-owned indirectly by Morgan Stanley. Morgan Stanley Smith Barney LLC is doing business as Morgan Stanley Wealth Management (“Morgan Stanley Wealth Management”). Morgan Stanley Wealth Management is a principal subsidiary of MSSBH.

~~The~~During ~~clearing~~the ~~commodity~~reporting ~~broker~~periods ~~for~~ended March 31, 2016 and 2015, the Partnership’s iscommodity broker was Morgan Stanley & Co. LLC (“MS&Co.”), a registered futures commission merchant. The Partnership also deposits a portion of its cash in a non-trading account at JPMorgan Chase Bank, N.A. MS&Co. also acts as the counterparty on all trading of foreign currency forward contracts. MS&Co. is a wholly-owned subsidiary of Morgan Stanley. Campbell & Company, Inc. (the “Trading Advisor”) is the trading advisor to the Partnership.

~~During~~In ~~June~~July 2015, the General Partner ~~determined~~delegated tocertain ~~invest~~administrative afunctions ~~portion~~to ofSS&C ~~the~~Technologies, ~~Partnership’s excess~~Inc., ~~cash~~a ~~(the~~Delaware ~~Partnership’s~~corporation, ~~assets~~currently doing ~~not~~business ~~used~~as ~~for~~SS&C ~~futures~~GlobeOp ~~interest trading or required margin for such trading) in United States~~ (the “~~U.S.~~Administrator”). ~~Treasury~~Pursuant ~~bills~~to ~~and/or~~a ~~other~~master ~~permitted~~services ~~investments.~~agreement, ~~The~~the ~~Partnership~~Administrator ~~will~~furnishes ~~receive~~certain ~~interest~~administrative, ~~on U.S.~~accounting, ~~Treasury~~regulatory, ~~bills~~reporting, attax ~~the~~and ~~relevant~~other ~~coupon~~services ~~rate.~~as ~~There~~agreed ~~will~~from betime ~~no change~~ to ~~the~~time. In ~~treatment~~addition, of the ~~excess~~Administrator ~~cash~~maintains ~~not~~certain ~~invested~~books inand ~~U.S.~~records ~~Treasury~~of ~~bills~~the ~~or other permitted investments~~Partnership. The General Partner ~~intends~~pays toor ~~hold~~reimburses the ~~U.S. Treasury bills until maturity~~Partnership, ~~but~~from in the ~~event that the~~ General Partner isfee ~~required to liquidate U.S. Treasury bills before they mature~~(formerly, tothe ~~meet~~administrative ~~redemption~~fee) ~~requests~~it ~~or otherwise~~receives, the ~~Partnership~~ordinary ~~may~~administrative expenses ~~incur~~of athe ~~loss on such U~~Partnership.S. ~~Treasury~~This ~~bills~~includes ~~and/or~~the ~~may~~expenses berelated ~~subject~~ to ~~additional~~ ~~fees~~the orengagement ~~other~~of ~~costs~~the Administrator. ~~The~~Therefore, ~~General~~the ~~Partner~~engagement ~~will~~of ~~endeavor~~the toAdministrator ~~maintain~~did ~~sufficient~~not ~~cash~~impact in the Partnership’s ~~accounts~~break-even ~~in order to avoid early liquidation of U~~point.S. ~~Treasury bills.~~

In July 2015, the General Partner delegated certain administrative functions to SS&C Technologies, Inc., a Delaware corporation, currently doing business as SS&C GlobeOp (the “Administrator”). Pursuant to a master services agreement, the Administrator furnishes certain administrative services in connection with the operation of the Partnership, including the preparation of required books and records and reports to limited partners, government agencies and regulators; computation of net asset value; assistance in connection with certain limited partner communications; calculation and accrual of income, expenses, gains and losses; preparation of financial, performance and other reporting; coordination of the annual audit with the Partnership’s auditor; preparation of the Partnership’s draft annual financial statements and accompanying materials; assistance with updating periodic regulatory filings; provision of tax services as agreed with the General Partner; assistance in opening and operating the Partnership’s bank accounts; provision of daily profit and loss, estimated net asset value and position and reconciliation reports; and reconciliation of daily transactions, positions and cash balances to the Partnership’s brokerage and bank accounts. In addition, the Administrator will maintain certain books and records of the Partnership. The General Partner pays or reimburses the Partnership, from the General Partner fee (formerly, the administrative fee) it receives, the ordinary administrative expenses of the Partnership. This includes the expenses related to the engagement of the Administrator. Therefore, the engagement of the Administrator will not impact the Partnership’s break-even point.

- 7 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

2. Basis of Presentation and Summary of Significant Accounting Policies

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of the General Partner, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership’s financial condition at ~~September~~March 3031, ~~2015~~2016, and the results of its operations for the three ~~and nine~~ months ~~ended~~ ~~September~~ended March 3031, ~~2015~~2016 and ~~2014,~~2015 and changes in partners’ capital for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015. These financial statements present the results of interim periods and do not include all of the disclosures normally provided in annual financial statements. These financial statements should be read together with the financial statements and notes included in the Partnership’s December 31, ~~2014,~~2015 Annual Report on Form 10-K (the “Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, ~~2014~~2015. The December 31, ~~2014~~2015 information has been derived from the audited financial statements as of and for the year ended December 31, ~~2014~~2015.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

Use of Estimates: The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the General Partner to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

~~Certain~~Restricted ~~prior~~and ~~period~~Unrestricted ~~amounts~~Cash: ~~have~~The ~~been~~cash ~~reclassified~~held toby ~~conform~~the toPartnership ~~current~~that ~~period~~is ~~presentation~~available for Futures Interests trading is on deposit in commodity brokerage accounts with MS&Co. ~~Amounts~~As ~~previously~~reflected ~~presented~~in asthe ~~unrealized currency~~Partnership’s ~~gain~~Statements ~~(loss)~~of onFinancial Condition, restricted cash equals the ~~condensed~~cash ~~schedules~~portion of ~~investments~~assets ~~and~~on ~~included~~deposit into ~~net~~meet ~~unrealized~~margin ~~gain~~requirements ~~(loss)~~plus the cash required to offset unrealized losses on ~~open~~foreign currency forward and option contracts and offset unrealized losses only on the ~~statements~~offsetting London Metal Exchange positions. All of ~~financial~~these ~~condition~~amounts are ~~now~~maintained ~~reported~~separately. Cash that is not classified as restricted ~~part~~cash ofis therefore classified as unrestricted cash. onRestricted ~~the~~and ~~statements~~unrestricted cash includes cash denominated in foreign currencies of ~~financial~~($33,596) (proceeds of $33,448) and ($230,412) (proceeds of $230,918) as of March 31, 2016 and ~~condition~~December 31, 2015, respectively.

~~Partnership’s~~Investment ~~Investments~~Company Status: ~~The~~Effective ~~fair~~January 1, ~~value of exchange-traded futures~~2014, ~~options~~the ~~and~~Partnership ~~forward contracts is~~adopted ~~determined~~Accounting byStandards ~~the~~Update ~~various~~(“ASU”) ~~exchanges~~2013-08, ~~and~~“Financial ~~reflects~~Services ~~the~~— ~~settlement~~Investment ~~price~~Companies ~~for~~(Topic ~~each~~946): ~~contract~~Amendments asto of the ~~close~~Scope, ofMeasurement ~~business~~and onDisclosure ~~the~~Requirements” ~~last~~and ~~business~~based ~~day~~on of the ~~reporting~~General ~~period. The fair value of foreign currency forward contracts is extrapolated on a forward~~Partner’s ~~basis~~assessment, ~~from~~ the ~~spot~~Partnership ~~prices~~has ~~quoted~~been asdeemed ofto ~~approximately~~be ~~3:00~~an ~~P.M.~~investment ~~(E.T.)~~company onsince ~~the last business day of the reporting period from various exchanges~~inception. ~~The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options~~Accordingly, ~~using~~the asPartnership ~~input~~follows the ~~spot~~investment ~~prices,~~company ~~interest~~accounting ~~rates,~~ and ~~option~~reporting ~~implied~~guidance ~~volatilities quoted as~~ of ~~approximately~~Topic ~~3:00~~946 ~~P.M.~~and ~~(E.T.)~~reflects onits ~~the~~investments ~~last~~at ~~business~~fair ~~day~~value ~~of the~~with ~~reporting~~unrealized ~~period.~~gains ~~U.S.~~and ~~Treasury~~losses ~~bills~~resulting ~~are valued at the last available bid price received~~ from ~~independent~~changes ~~pricing~~in ~~services~~fair asvalue ofreflected ~~the~~in ~~close of~~ the ~~last~~Statements ~~business day~~ of ~~the~~Income ~~reporting~~and ~~period~~Expenses.

Restricted and Unrestricted Cash: As reflected on the Partnership’s Statements of Financial Condition, restricted cash equals the cash portion of assets on deposit to meet margin requirements plus the cash required to offset unrealized losses on foreign currency forwards and options contracts and offset unrealized losses only on the offsetting London Metal Exchange positions. All of these amounts are maintained separately. Cash that is not classified as restricted cash is therefore classified as unrestricted cash. Restricted and unrestricted cash includes cash denominated in foreign currencies of $32,232 (cost of $31,662) and $182,941 (cost of $2,583,740) as of September 30, 2015 and December 31, 2014, respectively.

Investment Company Status: The Partnership adopted Accounting Standards Update (“ASU”) 2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement and Disclosure Requirements” and based on the General Partner’s assessment, the Partnership has been deemed to be an investment company since inception. Accordingly, the Partnership follows the investment company accounting and reporting guidance of Topic 946 and reflects its investments at fair value with unrealized gains and losses resulting from changes in fair value reflected in the Statements of Income and Expenses.

- 8 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

Income Taxes: Income taxes have not been listed as each partner is individually ~~liable~~ liable for the taxes, if any, on its share of the Partnership’s income and expenses. The General Partner has concluded that no provision for income tax is required in the Partnership’s financial statements. The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The ~~2011~~2012 through ~~2014~~2015 tax years remain subject to examination by U.S. federal and most state tax authorities. The General Partner does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Net Income (Loss) per Unit: Net income (loss) per unit of limited partnership interest (“Unit(s)”) is calculated in accordance with ~~investment~~ASU ~~company~~946, ~~guidance~~“Financial Services- Investment Companies”. See Note 3, “Financial Highlights”.

~~Recent~~Fair ~~Accounting~~Value ~~Pronouncement:~~of ~~In May 2015, the~~ Financial ~~Accounting~~Instruments: ~~Standards~~The ~~Board~~carrying issued ASU 2015-07, “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” which relates to disclosures for investments that calculate net asset value ~~per share (potentially fund~~ of ~~fund structures). The ASU requires investments for which~~ the ~~practical~~Partnership’s ~~expedient~~assets isand ~~used~~liabilities topresented ~~measure~~in ~~fair value at net asset value be removed from~~ the ~~fair~~Statements ~~value~~of Financial ~~hierarchy.~~Condition ~~Instead,~~that anqualify ~~entity is required to include those investments~~ as afinancial ~~reconciling~~instruments ~~line~~under ~~item so that~~ the ~~total~~Financial ~~fair value~~Accounting ~~amount~~Standards ofBoard ~~investments~~(“FASB”) inAccounting ~~the~~Standards ~~disclosure~~Codification is(“ASC”) ~~consistent with the amount on the balance sheet. Further~~825, ~~the~~“Financial ~~ASU removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather~~Instruments,” ~~those~~approximates ~~disclosures are limited to investments for which the entity has elected to measure the~~ fair value ~~using the practical expedient. The standard is effective for public business entities for~~ ~~fiscal~~due ~~years beginning after December 15, 2015. Early adoption is permitted. The Partnership has elected~~ to ~~adopt~~ the ~~guidance~~short asterm nature of ~~June 30,~~such ~~2015~~balances. ~~The adoption did not have any impact on the Partnership’s fair value measurement disclosures.~~

~~There~~Recent ~~have~~Accounting ~~been~~Pronouncement: noIn ~~material~~January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” The amendments in this update address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments or all entities that hold financial assets or owe financial liabilities. One of the amendments in this update eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet or a description of changes ~~with~~in ~~respect~~the methods and significant assumptions. Additionally, the update eliminates the requirement to disclose the ~~Partnership~~fair value of financial instruments measured at amortized cost for entities that are not public business entities. Investment companies are specifically exempted from ASU 2016-01’s ~~critical~~equity investment accounting ~~policies~~provisions asand ~~reported~~will incontinue to follow the ~~Partnership’s~~industry ~~Annual~~specific ~~Report~~guidance onfor ~~Form~~investment ~~10-K~~accounting under Topic 946. For public business entities, this update is effective for ~~the~~fiscal ~~year~~years ~~ended~~beginning after December 3115, ~~2014~~2017, and interim periods therein. For other entities, it is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The General Partner is currently evaluating the impact this guidance will have on the Partnership’s financial statements and related disclosures.

Reclassification: Certain prior period amounts have been reclassified to conform to current period presentation. Amounts previously presented as net unrealized gain (loss) on open contracts in the Statements of Financial Condition are now reported as net unrealized depreciation on open futures contracts and net unrealized depreciation on open forward contracts, as applicable. In addition, amounts previously presented as futures and forward contacts purchased and futures and forward contracts sold on the Condensed Schedules of Investments are now reported as futures contracts purchased, futures contract sold, unrealized appreciation on open forward contracts and unrealized depreciation on open forward contracts, as applicable. In the financial highlights, interest income per Unit and expenses per Unit previously presented separately are now combined into net investment loss per Unit.

There have been no material changes with respect to the Partnership’s critical accounting policies as reported in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2015.

- 9 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

3. Financial Highlights

Financial highlights for the limited partner class for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~ 2015 were as follows:

	For the Three Months				~~For the Nine Months~~
	Ended September 30,				Ended September 30,
	Ended March 31,
	2015		2014		2015		2014
	2016		2015
Per Unit operating performance:
Per Unit Performance (for unit outstanding throughout the period):*
Net asset value at the beginning of the period:	$	11.80	$	9.73	$	12.72	$	10.54
Net realized and unrealized gains (losses)	$	0.12	$	1.30
Net Investment Loss (2)		(0.17)		(0.14)		(0.54)		(0.51)
Net investment loss		(0.17)		(0.18)
Realized/Unrealized Gain (Loss)		0.53		1.52		(0.02)		1.08
Increase (decrease) for the period		(0.05)		1.12
Net Income (Loss)		0.36		1.38		(0.56)		0.57
Net asset value per Unit, beginning of period		12.08		12.72
Net asset value, September 30:	$	12.16	$	11.11	$	12.16	$	11.11
Net asset value per Unit, end of period	$	12.03	$	13.84
Ratios to average net assets: (1)
	For the Three Months
Net Investment Loss (2)		(5.6)%		(5.4)%		(5.6)%		(6.9)%
	Ended March 31,
Expenses before Incentive Fees		5.6%		5.4%		5.6%		6.9%
	2016		2015
Incentive Fees		-		-		-		-
Ratios to Average Limited Partners’ Capital:**
Expenses after Incentive Fees		5.6%		5.4%		5.6%		6.9%
Net investment loss***		(5.4) %		(5.5) %
Total return before Incentive Fees		3.1%		14.2%		(4.4)%		5.4%
Operating expenses before incentive fees		5.6 %		5.5 %
Incentive Fees		-		-		-		-
Incentive fees		-		-
Total return after Incentive Fees		3.1%		14.2%		(4.4)%		5.4%
Operating expenses after incentive fees		5.6 %		5.5 %
Total return:
Total return before incentive fees		(0.4) %		8.8 %
Incentive fees		-		-
Total return after incentive fees		(0.4) %		8.8 %

* Net investment loss per Unit is calculated by dividing the expenses net of interest income by average number of Units outstanding during the period. The net realized and unrealized gains (1losses) ~~Annualized~~per ~~(except~~Unit ~~for~~is ~~incentive~~balancing ~~fees~~amount ifnecessary ~~applicable)~~to reconcile the change in net asset value per Unit with the other per unit information.

~~(2)~~** ~~Interest~~Annualized ~~income~~(other ~~less~~than ~~total~~incentive ~~expense~~fees).

~~The~~*** ~~above~~Interest ~~ratios~~income ~~and~~less total ~~return may vary for individual investors based on the timing of capital transactions during the period~~expense. ~~Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.~~

The above ratios and total return may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average partners’ capital.

- 10 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

4. ~~Related~~Financial ~~Party~~Instruments ~~Transactions~~

The Partnership’s ~~cash~~trades isFutures ~~on deposit in commodity brokerage accounts with Morgan Stanley and will be maintained in cash, U~~Interests.S. ~~Treasury~~Futures ~~bills~~ and~~/or~~ ~~other~~forwards ~~permitted~~represent ~~investments~~contracts and segregated as customer funds, to the extent required by the Commodity Futures Trading Commission (“CFTC”) regulations. From time to time, a portion of the Partnership’s excess cash (the Partnership’s assets not used for ~~futures~~delayed ~~interest~~delivery ~~trading or required margin for such trading) may be invested by MS&Co. in permitted investments chosen by the General Partner from time to time. The Partnership will receive 100%~~ of ~~the~~an ~~interest~~instrument income earned on any excess cash invested in permitted investments. For excess cash which is not invested, MS&Co. pays the Partnership interest income on 100% of the average daily equity maintained in cash in the Partnership’s account during each month at ~~a rate equal to 80% of the monthly average of the 4-week U.S. Treasury bill discount rate. MS&Co. retains any interest earned in excess of the interest paid by MS&Co. to the Partnership. For~~ ~~purposes of such interest payments, net assets do not include monies due to the Partnership on Futures Interests that have not been received. The Partnership pays~~ a ~~General~~specified ~~Partner~~date ~~fee to the General Partner~~ and ~~an ongoing placement agent fee to Morgan Stanley Wealth Management~~price. Prior to October 2014, a flat rate brokerage fee was payable to MS&Co. The General Partner pays or reimburses the Partnership for all fees and costs charged or incurred by MS&Co., the General Partner and/or its affiliates or any other entity acting as a commodity broker for the Partnership.

5. Financial Instruments

The Partnership trades Futures Interests. Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and price. Futures Interests are open commitments until the settlement date, at which time they are realized. They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as a net unrealized gain or loss on open contracts. The resulting net change in unrealized gains and losses is reflected in the “Net change in unrealized” trading profit (loss) on open contracts from one period to the next on the Statements of Income and Expenses. The Partnership’s contracts are accounted for on a trade-date basis. Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts. There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.

The fair value of an exchange-traded contract is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined. If an exchange-traded contract could not have been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.

The ~~net~~exchange-traded ~~unrealized~~contracts ~~gains~~and ~~(losses)~~the onoff-exchange ~~open~~ traded contracts, ~~reported~~are asfair avalued ~~component of “Trading Equity”~~ on ~~the~~a ~~Statements~~daily ofbasis. ~~Financial Condition, and their longest contract maturities were as follows:~~

Net Unrealized Gains (Losses) on Open Contracts

Longest Maturities

Date

Exchange-Traded

Off-Exchange-Traded

Total

Exchange-Traded

Off-Exchange-Traded

Sep. 30, 2015

318,779

23,791

342,570

Dec. 2016

Dec. 2015

Dec. 31, 2014

774,574

518,669

1,293,243

Mar. 2016

Mar. 2015

The Partnership’s contracts are accounted for on a trade-date basis. Gains or losses are realized when the contracts are liquidated and are determined using the first-in, first-out method.

In general, the risks associated with off-exchange-traded contracts are greater than those associated with exchange-traded contracts because of the greater risk of default by the counterparty to an off-exchange-traded contract. The Partnership has credit risk associated with counterparty nonperformance. As of the date of the financial statements, the credit risk associated with the instruments in which the Partnership trades is limited to the unrealized gain amounts reflected in the Partnership’s Statements of Financial Condition. The net unrealized gains (losses) on open contracts are further disclosed gross by type of contract and corresponding fair value level in Note 6, “Fair Value Measurements”.

The Partnership also has credit risk because MS&Co. acts as the commodity futures broker, or the counterparty, with respect to most of the Partnership’s assets. Exchange-traded futures and exchange-traded forward contracts are fair valued on a daily basis, with variations in value settled on a daily basis. MS&Co., which is acting as a commodity futures broker for the Partnership’s exchange-traded futures and exchange-traded forward contracts, is required, pursuant to regulations of the Commodity Futures Trading Commission (“CFTC”), to segregate from its own assets, and for the sole benefit of its commodity customers, total cash held by it with respect to exchange-traded futures and exchange-traded forward contracts, including an amount equal to the net unrealized losses on all open exchange-traded futures and exchange-traded forward contracts, which, in the aggregate, totaled $13,000,565 and $6,506,899 at March 31, 2016 and December 31, 2015, respectively. With respect to the Partnership’s off-exchange-traded forward currency contracts, there are no daily settlements of variation in value, and nor is there any requirement that an amount equal to the net unrealized gains (losses) on such contracts be segregated. However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership’s accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held at MS&Co., for the benefit of MS&Co. With respect to those off-exchange-traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform. The Partnership has a netting agreement with MS&Co. The primary terms are based on industry standard master netting agreements. This agreement, which seeks to reduce both the Partnership’s and MS&Co.’s exposure on off-exchange-traded forward currency contracts, including options on contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s bankruptcy or insolvency.

The General Partner monitors and attempts to control the Partnership’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly, believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership may be subject. These monitoring systems generally allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forward and option positions by sector, margin requirements, gain and loss transactions and collateral positions.

The futures, forwards and options traded, and the U.S. Treasury bills held, by the Partnership involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently, in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded futures and exchange-traded forward contracts are settled daily through variation margin. Gains and losses on off-exchange-traded forward currency contracts are settled upon termination of the contract.

- 11 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

In general, the risks associated with off-exchange-traded contracts are greater than those associated with exchange-traded contracts because of the greater risk of default by the counterparty to an off-exchange-traded contract5. ~~The~~Trading ~~Partnership~~Activities has credit risk associated with counterparty nonperformance. As of the date of the financial statements, the credit risk associated with the instruments in which the Partnership trades is limited to the unrealized gain amounts reflected in the Partnership’s Statements of Financial Condition. The net unrealized gain (loss) on open contracts are further disclosed gross by type of contract and corresponding fair value level in Note 7, “Fair Value Measurements”.

The Partnership ~~also has credit risk because MS&Co. acts as the commodity futures broker or the counterparty, with respect to most of the Partnership~~’s ~~assets.~~objective ~~Exchange-traded~~is ~~futures,~~to ~~exchange-traded~~profit ~~forward~~from ~~and~~speculative ~~exchange-traded~~trading ~~futures-styled option contracts are fair valued on a daily basis, with variations~~ in ~~value~~Futures ~~settled on a daily basis~~Interests. ~~MS&Co.~~Therefore, ~~which~~the isTrading ~~acting as a~~Advisor ~~commodity futures broker~~ for the Partnership’s ~~exchange-traded~~will ~~futures,~~take ~~exchange-traded~~speculative ~~forward~~positions ~~and~~in ~~exchange-traded~~Futures ~~futures-styled~~Interests ~~option~~where ~~contracts,~~it isfeels ~~required, pursuant to regulations of~~ the ~~CFTC,~~best toprofit ~~segregate~~opportunities ~~from~~exist ~~its own assets, and~~ for ~~the sole benefit of~~ its ~~commodity~~trading ~~customers,~~strategy. ~~total~~As ~~cash held by it with respect to exchange-traded futures~~such, ~~exchange-traded forward and exchange-traded futures-styled option contracts, including an amount equal to~~ the ~~net~~average ~~unrealized~~number ~~losses~~of ~~on all open exchange-traded futures, exchange-traded forward and exchange-traded futures-styled options~~ contracts, ~~which,~~outstanding in ~~the~~absolute ~~aggregate,~~quantities ~~totaled $8,139,847 and $25,873,811 at September 30, 2015 and December 31, 2014, respectively. With respect to~~ (the ~~Partnership’s~~total ~~off-exchange-traded forward currency contracts and forward currency option contracts, there are no daily settlements~~ of ~~variation in value, and nor is there any requirement that an amount equal to~~ the ~~net unrealized gains~~open ~~(losses)~~long onand ~~such contracts be segregated. However, the Partnership is required to meet margin requirements equal to the net unrealized loss on~~ open ~~forward~~short ~~currency~~positions) ~~contracts~~has inbeen ~~the~~presented ~~Partnership’s~~as ~~accounts~~a ~~with~~part ~~the counterparty, which is accomplished by daily maintenance~~ of the ~~cash~~volume ~~balance in a custody account held at MS&Co.~~disclosure, ~~for~~as ~~the~~position ~~benefit~~direction ~~of MS&Co. With respect to those off-exchange-traded forward currency contracts, the Partnership~~ is atnot ~~risk~~an toindicative ~~the~~factor ~~ability~~in ~~of MS&Co., the sole counterparty on all~~ such ~~contracts,~~volume ~~to perform~~disclosures. The Partnership has a netting agreement with MS&Co. The primary terms are based on industry standard master netting agreements. This agreement, which seeks to reduce both the Partnership’s and MS&Co.’s exposure on off-exchange-traded forward currency contracts, should materially decrease the Partnership’s credit risk in the event of MS&Co.’s bankruptcy or insolvency.

~~The~~All ~~General~~of ~~Partner~~the ~~monitors~~commodity ~~and~~interest ~~attempts~~owned toby ~~control~~ the Partnership’s ~~risk~~are ~~exposure~~held onfor atrading ~~daily~~purposes. ~~basis~~The ~~through~~monthly ~~financial,~~average ~~credit~~number ~~and~~of ~~risk management~~futures ~~monitoring~~contracts ~~systems,~~traded during ~~and,~~the ~~accordingly,~~three ~~believes~~months ~~that~~ended itMarch 31, ~~has~~2016 ~~effective procedures for evaluating~~ and ~~limiting~~2015 ~~the~~were ~~credit~~924 and ~~market~~1,373, ~~risks~~respectively. toThe ~~which~~month ~~the~~average ~~Partnership~~of ~~may~~commodity beforward ~~subject.~~contracts ~~These~~traded ~~monitoring~~during ~~systems generally allow~~ the ~~General~~three ~~Partner to~~months ~~statistically~~ended ~~analyze~~March 31, ~~actual~~2016 ~~trading~~and ~~results~~2015 ~~with~~were ~~risk~~245 ~~adjusted performance indicators~~ and ~~correlation~~360, ~~statistics~~respectively. InThe average ~~addition,~~notional ~~online~~value ~~monitoring~~of ~~systems~~currency ~~provide~~forward ~~account~~contracts ~~analysis~~during ofthe ~~U.S.~~three ~~Treasury~~months ~~bills,~~ended ~~futures~~March 31, ~~forwards~~2016 and ~~options~~2015 ~~positions~~was ~~by sector~~$233, ~~margin requirements~~240,803 ~~gain~~ and ~~loss~~$300,996,370, ~~transactions and collateral positions~~respectively.

The ~~U.S.~~following ~~Treasury~~tables ~~bills,~~summarize ~~futures,~~the ~~forwards~~gross and ~~options traded~~net byamounts ~~the~~recognized ~~Partnership~~relating ~~involve~~to ~~varying degrees of related market risk. Market risk is often dependent upon changes in~~ the ~~level~~assets ~~or volatility of interest rates, exchange rates,~~ and ~~prices~~liabilities of ~~financial instruments and commodities, factors that result in frequent changes in~~ the ~~fair value of the~~ Partnership’s derivative ~~open~~instruments ~~positions,~~ and ~~consequently~~transactions ineligible ~~its~~for ~~earnings,~~offset ~~whether~~subject ~~realized~~to ormaster ~~unrealized,~~netting ~~and~~agreements ~~cash~~or ~~flow.~~similar ~~Gains~~agreements ~~and~~as ~~losses on open positions~~ of ~~exchange-traded futures~~March 31, ~~exchange-traded forward,~~2016 and ~~exchange-traded~~December 31, ~~futures-styled~~2015, ~~options contracts are settled daily through variation margin~~respectively. Gains and losses on off-exchange-traded forward currency contracts are settled upon termination of the contract. Gains and losses on off-exchange-traded forward currency options contracts are settled on an agreed-upon settlement date.


			Gross Amounts		Amounts
			Offset in the		Presented in the		Gross Amounts Not Offset in the
	Gross		Statements of		Statements of		Statements of Financial Condition
	Amounts		Financial		Financial		Financial		Cash Collateral
March 31, 2016	Recognized		Condition		Condition		Instruments		Received/Pledged*		Net Amount
Assets
Futures	$	566,916	$	(187,609)	$	379,307	$	-	$	-	$	379,307
Forwards		1,366,917		(1,363,598)		3,319		-		-		3,319

Total assets	$	1,933,833	$	(1,551,207)	$	382,626	$	-	$	-	$	382,626

Liabilities
Futures	$	(187,609)	$	187,609	$	-	$	-	$	-	$	-
Forwards		(1,363,598)		1,363,598		-		-		-		-

Total liabilities	$	(1,551,207)	$	1,551,207	$	-	$	-	$	-	$	-

Net fair value											$	382,626	*

- 12 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

6. Derivatives and Hedging


			Gross Amounts		Amounts
			Offset in the		Presented in the		Gross Amounts Not Offset in the
	Gross		Statements of		Statements of		Statements of Financial Condition
	Amounts		Financial		Financial		Financial		Cash Collateral
December 31, 2015	Recognized		Condition		Condition		Instruments		Received/Pledged*		Net Amount
Assets
Futures	$	269,891	$	(269,891)	$	-	$	-	$	-	$	-
Forwards		1,264,408		(1,264,408)		-		-		-		-

Total assets	$	1,534,299	$	(1,534,299)	$	-	$	-	$	-	$	-

Liabilities
Futures	$	(460,830)	$	269,891	$	(190,939)	$	-	$	-	$	(190,939)
Forwards		(1,322,225)		1,264,408		(57,817)		-		-		(57,817)

Total liabilities	$	(1,783,055)	$	1,534,299	$	(248,756)	$	-	$	-	$	(248,756)

Net fair value											$	(248,756)	*

~~The~~* In the event of default by the Partnership, MS&Co., the Partnership’s ~~objective~~commodity isfutures tobroker ~~profit~~and/or ~~from~~the ~~speculative~~sole ~~trading~~counterparty into ~~Futures~~the ~~Interests.~~Partnership’s ~~Therefore~~off-exchange-traded contracts, as applicable, has the ~~Trading~~right ~~Advisor for~~to offset the Partnership’s ~~will~~obligation ~~take~~with ~~speculative~~the ~~positions~~Partnership’s incash ~~Futures~~and/or ~~Interests~~U.S. ~~where~~Treasury itbills ~~feels~~held ~~the~~by ~~best~~MS&Co., ~~profit~~thereby ~~opportunities~~minimizing ~~exist~~MS&Co.’s ~~for~~risk ~~its~~of ~~trading~~loss. ~~strategy~~There is no collateral posted by MS&Co. Asand as such, in the ~~average~~event ~~number~~ of ~~contracts~~default ~~outstanding~~by inMS&Co., ~~absolute~~the ~~quantities~~Partnership ~~(the~~is ~~total~~exposed ofto the ~~open long~~amount ~~and~~shown ~~open~~in ~~short~~the ~~positions)~~Statements ~~has~~of ~~been~~Financial ~~presented~~Condition. asIn athe ~~part~~case of ~~the~~exchange-traded ~~volume disclosure~~contracts, asthe ~~position~~Partnership’s ~~direction~~exposure isto ~~not~~counterparty anrisk ~~indicative~~may ~~factor~~be inreduced ~~such~~since ~~volume~~the ~~disclosures.~~exchange’s ~~With~~clearinghouse ~~regard~~interposes toits ~~foreign~~credit ~~currency~~between ~~forward~~buyer ~~trades,~~and ~~each~~seller ~~notional~~and ~~quantity~~the ~~amount~~clearinghouse’s ~~has been~~guarantee ~~converted~~fund tomay anbe ~~equivalent~~available ~~contract~~in ~~based~~the ~~upon~~event anof ~~industry~~a ~~convention~~default.

The following tables summarize the gross and net amounts recognized relating to the assets and liabilities of the Partnership’s derivative instruments and transactions eligible for offset subject to master netting agreements or similar agreements as of September 30, 2015 and December 31, 2014, respectively.

Offsetting of Derivative Assets and Liabilities as of September 30, 2015:

	Gross		Gross AmountsOffset in theStatements of		Net AmountsPresented in theStatements of			Gross Amounts Not Offset in theStatements of Financial Condition
	AmountsRecognized		FinancialCondition		FinancialCondition			Financial Instruments		Cash Collateral (Received)/Pledged**		Net Amount
	$		$		$			$		$		$
Assets
Futures		408,200		(145,676)		262,524	*		-		-		262,524
Forwards		985,268		(905,222)		80,046	*		-		-		80,046
Total Assets		1,393,468		(1,050,898)		342,570			-		-		342,570
Liabilities
Futures		(145,676)		145,676		-			-		-		-
Forwards		(905,222)		905,222		-			-		-		-
Total Liabilities		(1,050,898)		1,050,898		-			-		-		-
Net Fair Value													342,570	**

- 13 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

~~Offsetting~~The following tables indicate the Partnership’s gross fair values of ~~Derivative~~derivative instruments ~~Assets~~of futures and ~~Liabilities~~forward contracts as separate assets and liabilities as of March 31, 2016 and December 31, ~~2014:~~2015, respectively.

	Gross			Gross AmountsOffset in theStatements of		Net AmountsPresented in theStatements of			Gross Amounts Not Offset in theStatements of Financial Condition
	March 31, 2016
	AmountsRecognized			FinancialCondition		FinancialCondition			FinancialInstruments		Cash Collateral(Received)/Pledged**		Net Amount
Assets
	$			$		$			$		$		$
Futures Contracts
Assets
Commodity	$	159,359
Futures		873,317			(134,615)		738,702	*		-		-		738,702
Equity		102,141
Forwards		1,536,029			(981,488)		554,541	*		-		-		554,541
Interest rate		305,416
Total Assets		2,409,346			(1,116,103)		1,293,243			-		-		1,293,243
Total unrealized appreciation on open futures contracts		566,916
Liabilities
Futures		(134,615)			134,615		-			-		-		-
Futures Contracts
Forwards		(981,488)			981,488		-			-		-		-
Commodity		(78,364)
Total Liabilities		(1,116,103)			1,116,103		-			-		-		-
Equity		(64,023)
Net Fair Value														1,293,243	**
Interest rate		(45,222)
Total unrealized depreciation on open futures contracts		(187,609)
Net unrealized appreciation on open futures contracts	$	379,307	*
Assets
Forward Contracts
Commodity	$	55,289
Foreign currency		1,311,628
Total unrealized appreciation on open forward contracts		1,366,917
Liabilities
Forward Contracts
Commodity		(44,741)
Foreign currency		(1,318,857)
Total unrealized depreciation on open forward contracts		(1,363,598)
Net unrealized appreciation on open forward contracts	$	3,319	**

* ~~Included~~This asamount ais ~~component~~included ofin “Net unrealized ~~gain~~appreciation on open futures contracts” onin the Statements of Financial Condition.

** InThis ~~the~~amount ~~event~~is ofincluded ~~default~~in by“Net ~~the~~unrealized ~~Partnership,~~appreciation ~~MS&Co.,~~on ~~the~~open ~~Partnership’s~~forward ~~commodity futures broker and the sole counterparty to the Partnership’s off-exchange-traded~~ contracts,” as applicable, has the right to offset the Partnership’s obligation with the Partnership’s cash held by MS&Co., thereby minimizing MS&Co.’s risk of loss. There is no collateral posted by MS&Co. and as such, in the ~~event of default by MS&Co., the Partnership is exposed to the amount shown on the~~ Statements of Financial Condition. In the case of exchange-traded contracts, the Partnership’s exposure to counterparty risk may be reduced since the exchange’s clearinghouse interposes its credit between buyer and seller and the clearinghouse’s guarantee fund may be available in the event of a default.

- 14 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

The effect of Trading Activities on the Statements of Financial Condition as of September 30, 2015:


	December 31, 2015
Assets
Futures Contracts
Commodity	$	175,711
Equity		26,772
Interest rate		67,407

Total unrealized appreciation on open futures contracts		269,890

Liabilities
Futures Contracts
Commodity		(351,218)
Equity		(40,237)
Interest rate		(69,374)

Total unrealized depreciation on open futures contracts		(460,829)

Net unrealized depreciation on open futures contracts	$	(190,939)	*


Assets
Forward Contracts
Commodity	$	26,107
Foreign currency		1,238,301

Total unrealized appreciation on open forward contracts		1,264,408

Liabilities
Forward Contracts
Commodity		(135,773)
Foreign currency		(1,186,452)

Total unrealized depreciation on open forward contracts		(1,322,225)

Net unrealized depreciation on open forward contracts	$	(57,817)	**

Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss		Short Unrealized Gain		Short Unrealized Loss		NetUnrealized Gain/(Loss)		Averagenumber ofcontracts outstanding for the ninemonths(absolutequantity)
	$		$		$		$		$
Commodity		56,886		(88,877)		335,671		(117,204)		186,476		693
Equity		6,344		(51,759)		14,146		(11,475)		(42,744)		185
Foreign currency		85,744		(635,471)		708,310		(134,793)		23,790		281
Interest rate		186,039		(4,861)		328		(6,458)		175,048		574
Total net unrealized gain on open contracts		335,013		(780,968)		1,058,455		(269,930)		342,570

*	This amount is included in “Net unrealized depreciation on open futures contracts” in the Statements of Financial Condition.

~~The~~** ~~effect~~This ofamount ~~Trading~~is ~~Activities~~included in “Net unrealized depreciation on ~~the~~open ~~Statements~~forward ofcontracts” ~~Financial~~in ~~Condition~~the asStatements of ~~December 31,~~Financial ~~2014:~~ Condition.

Futures and Forward Contracts	Long Unrealized Gain		Long Unrealized Loss		Short Unrealized Gain		Short Unrealized Loss		NetUnrealized Gain/(Loss)		Averagenumber ofcontracts outstanding for the year(absolutequantity)
	$		$		$		$		$
Commodity		3,667		(117,406)		290,455		(24,367)		152,349		848
Equity		53,954		(46,233)		689		(4,261)		4,149		309
Foreign currency		68,076		(785,527)		1,356,424		(120,304)		518,669		429
Interest rate		625,971		(9,658)		10,110		(8,347)		618,076		977
Total net unrealized gain on open contracts		751,668		(958,824)		1,657,678		(157,279)		1,293,243

- 15 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

The following ~~tables~~table ~~summarize~~indicates the ~~net~~ trading ~~results~~gains ofand ~~the~~losses, ~~Partnership~~by market sector, on derivative instruments for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively.

The effect of Trading Activities on the Statements of Income and Expenses for the three and nine months ended September 30, 2015 included in Total Trading Results:


	Three Months Ended
	March 31,
Sector	2016			2015
Commodity	$	(484,450)		$	110,109
Equity		(198,923)			761,162
Foreign currency		277,766			803,465
Interest rate		617,900			951,232

Total	$	212,293	*	$	2,625,968	*

	For the Three Months		For the Nine Months
	Ended September 30, 2015		Ended September 30, 2015
Type of Instrument	$		$
Commodity		915,609		(665,555)
Equity		(275,220)		111,624
Foreign currency		492,855		879,754
Interest rate		(106,853)		(324,746)
Total		1,026,391		1,077

*	This amount is included in “Total trading results” in the Statements of Income and Expenses.

Line items on the Statements of Income and Expenses for the three and nine months ended September 30, 2015:

	For the Three Months		For the Nine Months
	Ended September 30, 2015		Ended September 30, 2015
Trading Results	$		$
Net realized		(2,322,317)		(1,449,619)
Net change in unrealized		3,348,708		1,450,696
Total Trading Results		1,026,391		1,077

- 16 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

~~The~~6. ~~effect~~Fair ofValue ~~Trading~~Measurements ~~Activities on the Statements of Income and Expenses for the three and nine months ended September 30, 2014 included in Total Trading Results:~~

	For the Three Months		For the Nine Months
	Ended September 30, 2014		Ended September 30, 2014
Type of Instrument	$		$
Commodity		1,088,449		(265,854)
Equity		72,377		(749,295)
Foreign currency		1,751,536		1,090,951
Interest rate		514,165		1,555,453
Total		3,426,527		1,631,255

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

~~Line~~The ~~items~~fair value of exchange-traded futures, forward and option contracts is determined by the various exchanges, and reflects the settlement price for each contract as of the close of business on the ~~Statements~~last business day of ~~Income~~the ~~and~~reporting ~~Expenses~~period. The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period from various exchanges. The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input the ~~three~~spot prices, interest rates and ~~nine~~option ~~months~~implied ~~ended~~volatilities ~~September 30, 2014~~quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period. U.S. Treasury bills are valued at the last available bid price received from independent pricing services as of the close of the last business day of the reporting period.

	For the Three Months		For the Nine Months
	Ended September 30, 2014		Ended September 30, 2014
Trading Results	$		$
Net realized		2,215,029		743,754
Net change in unrealized		1,211,498		887,501
Total Trading Results		3,426,527		1,631,255

The Partnership considers prices for exchange-traded commodity futures, forward, swap and option contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of U.S. Treasury bills, non-exchange-traded forward, swap and certain option contracts for which market quotations are not readily available are priced by broker quotes or pricing services that derive fair values for those assets and liabilities from observable inputs (Level 2). As of March 31, 2016 and December 31, 2015 and for the periods ended March 31, 2016 and 2015, the Partnership did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of the General Partner’s assumptions and internal valuation pricing models (Level 3). Transfers between levels are recognized at the end of the reporting period. During the reporting periods, there were no transfers of assets or liabilities between Level 1 and Level 2.

The Partnership’s assets and liabilities measured at fair value on a recurring basis are summarized in the following tables by the type of inputs applicable to the fair value measurements.


March 31, 2016	Total		Level 1		Level 2		Level 3
Assets
U.S. Treasury bills	$	8,499,734	$	-	$	8,499,734	$	-
Futures		566,916		566,916		-		-
Forwards		1,366,917		55,289		1,311,628		-

Total Assets	$	10,433,567	$	622,205	$	9,811,362	$	-

Liabilities
Futures	$	187,609	$	187,609	$	-	$	-
Forwards		1,363,598		44,741		1,318,857		-

Total Liabilities	$	1,551,207	$	232,350	$	1,318,857	$	-

- 17 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

7. Fair Value Measurements


December 31, 2015	Total		Level 1		Level 2		Level 3
Assets
U.S. Treasury bills	$	15,498,983	$	-	$	15,498,983	$	-
Futures		269,891		269,891		-		-
Forwards		1,264,408		26,108		1,238,300		-

Total Assets	$	17,033,282	$	295,999	$	16,737,283	$	-

Liabilities
Futures	$	460,830	$	460,830	$	-	$	-
Forwards		1,322,225		135,773		1,186,452		-

Total Liabilities	$	1,783,055	$	596,603	$	1,186,452	$	-

~~Financial instruments are carried at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants~~7. ~~Assets~~Subsequent ~~and~~Events liabilities carried at fair value are classified and disclosed in the following three levels: Level 1 - unadjusted quoted market prices in active markets for identical assets and liabilities; Level 2 - inputs other than unadjusted quoted market prices that are observable for the asset or liability, either directly or indirectly (including unadjusted quoted market prices for similar investments, interest rates and credit risk); and Level 3 - unobservable inputs for the asset or liability (including the Partnership’s own assumptions used in determining the fair value of investments).

InThe ~~certain~~General ~~cases,~~Partner ~~the~~evaluates ~~inputs~~events ~~used~~that tooccur ~~measure~~after ~~fair~~the ~~value~~balance ~~may~~sheet ~~fall~~date ~~into~~but ~~different~~before ~~levels~~financial ofstatements ~~the~~are ~~fair value hierarchy~~issued. The InGeneral ~~such~~Partner ~~cases,~~has ~~an investment’s~~assessed ~~level within~~ the ~~fair~~subsequent ~~value~~events ~~hierarchy~~through ~~is based on~~ the ~~lowest~~date ~~level~~ of ~~input~~issuance ~~that~~and ishas ~~significant~~determined tothat ~~the~~there ~~fair~~were ~~value~~no ~~measurement.~~subsequent ~~The~~events ~~Partnership’s~~requiring ~~assessment~~adjustment ~~of the significance of a particular input~~ to ~~the~~or ~~fair~~disclosure ~~value measurement~~ in ~~its entirety requires judgment, and consideration of factors specific to~~ the ~~investment~~financial statements.

Transfers between levels are recognized at the end of the reporting period. During the period from January 1, 2015 to September 30, 2015, and the twelve months ended December 31, 2014, there were no Level 3 assets and liabilities, and there were no transfers of assets or liabilities between Level 1 and Level 2.

The Partnership’s assets and liabilities measured at fair value on a recurring basis are summarized in the following tables by the type of inputs applicable to the fair value measurements.

September 30, 2015	Level 1		Level 2		Level 3		Total
	$		$		$		$
Assets
Investment in U.S. Treasury bills		-		14,970,257		-		14,970,257
Futures		408,200		-		-		408,200
Forwards		191,214		794,054		-		985,268
Total Assets		599,414		15,764,311		-		16,363,725
Liabilities
Futures		145,676		-		-		145,676
Forwards		134,959		770,263		-		905,222
Total Liabilities		280,635		770,263		-		1,050,898
*Net fair value		318,779		14,994,048		-		15,312,827

- 18 -

MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL L.P.

NOTES TO FINANCIAL STATEMENTS

December 31, 2014	Level 1		Level 2		Level 3		Total
	$		$		$		$
Assets
Futures		873,317		-		-		873,317
Forwards		111,529		1,424,500		-		1,536,029
Total Assets		984,846		1,424,500		-		2,409,346
Liabilities
Futures		134,615		-		-		134,615
Forwards		75,657		905,831		-		981,488
Total Liabilities		210,272		905,831		-		1,116,103
*Net fair value		774,574		518,669		-		1,293,243

* This amount comprises the “Net unrealized gain on open contracts” and “Investment in U.S. Treasury bills” on the Statements of Financial Condition.

8. Subsequent Events

The General Partner evaluates events that occur after the balance sheet date but before financial statements are issued. The General Partner has assessed the subsequent events through the date of issuance and has determined that there were no subsequent events requiring adjustment of, or disclosure in, the financial statements.

- 19 -

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As of ~~September~~March 3031, ~~2015~~2016, the percentage of assets allocated to each market sector was approximately as follows: Interest Rate 1819.714%; Currency 4631.963%; Equity 1123.603%; and Commodity 2226.730%.

Liquidity. The Partnership deposits its assets ~~with~~available for trading in Futures Interests with MS&Co. as its clearing commodity broker in separate futures, ~~forward~~forwards and options trading accounts established for the Trading Advisor. Such assets are used as margin to engage in trading and may be used as margin solely for the Partnership’s trading. The assets are held either in non-interest bearing bank accounts or in securities and instruments permitted by the CFTC for investment of customer segregated or secured funds. Since the Partnership’s sole purpose is to trade in futures, forwards and ~~option and U.S. Treasury bills~~options, it is expected that the Partnership will continue to own such liquid assets for margin purposes.

The Partnership’s investment in futures, forwards, ~~options~~ and ~~U.S.~~options ~~Treasury bills~~ may, from time to time, be illiquid. Most U.S. futures exchanges limit fluctuations in prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” Trades may not be executed at prices beyond the daily limit. If the price for a particular futures or option contract has increased or decreased by an amount equal to the daily limit, positions in that futures or option contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. These market conditions could prevent the Partnership from promptly liquidating its futures or option contracts and result in restrictions on redemptions.

There is no limitation on daily price movements in trading forward contracts on foreign currencies. The markets for some world currencies have low trading volume and are illiquid, which may prevent the Partnership from trading in potentially profitable markets or prevent the Partnership from promptly liquidating unfavorable positions in such markets, subjecting it to substantial losses. Either of these market conditions could result in restrictions on redemptions. For the periods covered by this report, illiquidity has not materially affected the Partnership’s assets.

There are no known material trends, demands, commitments, events, or uncertainties at the present time that are reasonably likely to result in the Partnership’s liquidity increasing or decreasing in any material way.

As of ~~September~~March 3031, ~~2015~~2016, approximately 5368.047% of the Partnership’s total investment exposure is futures contracts which are exchange-traded, while approximately 4631.963% is forward contracts which are off-exchange traded.

Capital Resources. The Partnership does not have, nor does it expect to have, any capital assets. The Partnership’s only assets are its cash at bank, interest receivable and its equity in trading ~~accounts~~account, consisting of restricted and unrestricted cash, net unrealized ~~gain~~appreciation on open futures contracts, net unrealized appreciation on open forward contracts and investment in U.S. Treasury bills at fair value, if applicable. Redemptions of Units in the future will affect the amount of funds available for investments in futures, forwards, ~~option~~ and ~~U.S.~~options ~~Treasury bills~~ in subsequent periods. It is not possible to estimate the amount, and therefore the impact, of future outflows of Units.

There are no known material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Partnership’s capital resource arrangements at the present time.

Off-Balance Sheet Arrangements and Contractual Obligations. The Partnership does not have any off-balance sheet arrangements, nor does it have contractual obligations or commercial commitments to make future payments, that would affect its liquidity or capital resources.

- 2019 -

Results of Operations

General. The Partnership’s results depend on the Trading Advisor and the ability of the Trading Advisor’s trading program to take advantage of price movements in the futures, forward and options markets.

The Trading Advisor trades the Partnership’s assets in accordance with its Financial, Metal & Energy Large Portfolio, a proprietary, systematic trading program. The trading models utilized in the Trading Advisor’s trading program are designed to detect and exploit medium-term to long-term price changes, while also applying risk management and portfolio management principles.

The Trading Advisor believes that utilizing multiple trading models provides an important level of diversification, and is most beneficial when multiple contracts of each market are traded. Every trading model may not trade every market. It is possible that one trading model may signal a long position while another trading model signals a short position in the same market. It is the Trading Advisor’s intention to offset those signals to reduce unnecessary trading, but if the signals are not simultaneous, both trades will be taken and since it is unlikely that both positions would prove profitable, in retrospect, one or both trades will appear to have been unnecessary. It is the Trading Advisor’s policy to follow trades signaled by each trading model independently of the other models.

The following presents a summary of the Partnership’s operations for the three ~~and~~ ~~nine~~ months ended ~~September~~ March 3031, ~~2015~~2016 and ~~2014~~2015, and a general discussion of its trading activities during each period. It is important to note, however, that the Trading Advisor trades in various markets at different times and that prior activity in a particular market does not mean that such market will be actively traded by the Trading Advisor or will be profitable in the future. Consequently, the results of operations of the Partnership are difficult to discuss other than in the context of the Trading Advisor’s trading activities on behalf of the Partnership during the period in question. Past performance is no guarantee of future results.

The Partnership’s results of operations set forth in the financial statements ~~on pages 2 through 19 of this report~~ are prepared in accordance with GAAP, which require the use of certain accounting policies that affect the amounts reported in these financial statements, including the following: the contracts the Partnership trades are accounted for on a trade-date basis and marked to market on a daily basis. The difference between their original contract value and market value is recorded on the Statements of Income and Expenses as “Net change in unrealized ~~trading~~gains ~~profit~~ (~~loss~~losses)” on open contracts,” and recorded as “Net realized ~~trading~~gain ~~profit~~ (~~loss~~losses) on closed contracts” when open positions are closed out. The sum of these amounts constitutes the Partnership’s trading results. The market value of a futures contract is the settlement price on the exchange on which that futures contract is traded on a particular day. The value of a foreign currency forward contract is based on the spot rate as of approximately 3:00 P.M. (E.T.), the close of the business day. Interest income, as well as management fees, incentive fees, General Partner fees and ongoing placement agent fees of the Partnership are recorded on an accrual basis.

The General Partner believes that, based on the nature of the operations of the Partnership, no assumptions relating to the application of critical accounting policies other than those presently used could reasonably affect reported amounts.

- 20 -

For the Three Months Ended March 31, 2016

The Partnership recorded total trading results including interest income totaling $223,043 and expenses totaling $302,746 resulting in net loss of $79,703 for the three months ended March 31, 2016. The Partnership’s net asset value per Unit decreased from $12.08 at December 31, 2015 to $12.03 at March 31, 2016.

During the first quarter, the Partnership posted a loss in Net Asset Value per Unit as trading gains in interest rates, currencies, and energies were offset by trading losses in agriculturals, metals, and global stock indices. The most significant losses were incurred within the agricultural markets during January from short corn futures positions as prices rose after a strong U.S. export sales report and adverse weather conditions in Brazil. Additional losses in this sector were incurred during March from short wheat and soybean futures positions as prices increased as the U.S. dollar’s decline improved U.S. export prospects. Within the metals complex, losses were incurred during January and February from short precious metals positions as prices increased as uncertainty in Chinese financial markets, plunging oil prices, and signs of softening U.S. economic growth all bolstered the safe haven appeal of the metals. Additional losses were recorded during February and March from short base metals futures positions as prices rose due to a decrease in the value of the U.S. dollar and optimism that demand would improve after the Chinese government signaled increased support for economic stimulus. In the global stock indices, losses were recorded primarily during January from long positions as prices decreased amid the steep sell-off in equities as global growth concerns persisted to start the New Year. The Partnership’s losses for the quarter were offset by gains achieved within the global interest rates sector during January and February primarily from long European bond futures positions as prices increased following dovish comments released by the European Central Bank and a flight-to-quality due to global growth concerns. In the currencies sector, gains were recorded during January from short positions in the British pound versus the U.S. dollar as the relative value of the pound fell amid concerns regarding the health of the U.K. economy and resulting implications for future rate increases. Additional gains were achieved from short positions in the Canadian dollar versus the U.S. dollar during January. Within the energy sector, gains were experienced during January from short futures positions in crude oil and oil distillates as prices declined following a rise in U.S. oil inventory levels and the expectation of additional production from Iran. Additional gains in this sector were recorded during February from short natural gas futures positions as prices fell dramatically as mild weather in much of the U.S. reduced demand for an already oversupplied market.

- 21 -

.For the Three ~~and Nine~~ Months Ended ~~September~~March 3031, 2015

The Partnership recorded total trading results including interest income totaling $12,~~027~~626,~~087~~437 and expenses totaling $~~316~~366,~~256~~782 resulting in net income of $~~710~~2,~~831~~259,655 for the three months ended ~~September~~March 3031, 2015. The Partnership’s net asset value per Unit increased from $1112.8072 at ~~June~~December 3031, ~~2015~~2014 to $1213.1684 at ~~September~~March 3031, 2015.

During the ~~third~~first quarter, the Partnership posted a gain in ~~Net~~net ~~Asset~~asset ~~Value~~value per Unit as trading gains in ~~metals~~global interest rates, currencies, stock indices, agriculturals, and energies more than offset ~~trading~~ losses infrom ~~global~~trading ~~stock~~in ~~indices, agriculturals and global interest rates~~metals. The most significant gains were achieved within the ~~metals~~global interest rate sector primarily during ~~July~~January from ~~short~~long ~~futures~~European ~~positions~~and inCanadian ~~gold~~fixed ~~and~~income ~~silver~~futures positions as prices ~~declined~~advanced asafter ~~a strengthening~~the ~~U.S.~~central ~~dollar~~banks ~~decreased~~in both the ~~appeal~~European ofUnion ~~precious~~and ~~metals~~Canada announced stimulus measures to combat widespread deflationary concerns and slowing economic growth. ~~Additional~~Long ~~gains~~positions ~~were~~in U.S. Treasury note futures also recorded gains during ~~July~~January ~~from~~as ~~short~~prices ~~base~~advanced ~~metals~~after ~~futures~~falling ~~positions~~crude asoil prices ~~moved~~dampened ~~lower~~inflationary ~~amid~~concerns ~~concern~~and adecreased ~~slowdown~~the inurgency for the ~~Chinese~~U.S. ~~economy~~Federal ~~would~~Reserve ~~weaken~~to ~~demand~~increase interest rates. ~~Within~~ In the currency sector, gains were ~~achieved~~recorded during the ~~third~~ first quarter from short ~~Canadian,~~euro ~~Australian~~positions ~~and~~versus ~~New~~the ~~Zealand~~U.S. dollar as the value of the euro decreased due to an unprecedented economic stimulus program introduced by the European Central Bank. Short positions in the Canadian dollar versus the U.S. dollar aswere also ~~“commodity~~profitable ~~currencies”~~during ~~were~~January ~~pressured~~after ~~lower~~the asBank ~~global~~of ~~commodities~~Canada ~~prices~~unexpectedly ~~fell~~cut interest rates. In Within the ~~energy~~stock ~~complex~~index sector, gains were ~~achieved~~experienced during ~~the~~January ~~third quarter~~ from ~~short~~long positions in ~~crude~~European ~~oil~~index ~~and~~futures ~~oil~~positions ~~related products~~ as prices ~~decreased~~were ~~due~~supported toby ~~high~~the European ~~production~~Central inBank’s ~~the~~loose Umonetary policy.S. ~~and~~Additional ~~Middle~~gains ~~East,~~were ~~which~~recorded ~~added~~in tothis asector ~~growing~~during ~~global~~February ~~supply~~from ~~glut~~long positioning in U.S., ~~A portion~~Japan, ofAustralia, ~~the~~Europe, ~~Partnership’s~~and ~~gains~~Canada ~~for~~index ~~the~~futures ~~quarter~~positions ~~was~~as ~~offset~~a bybounce ~~losses~~in ~~incurred~~oil ~~within~~prices ~~the~~alleviated some fears around a global ~~stock~~growth ~~index~~slowdown. ~~sector~~Gains inwithin the ~~middle~~agricultural ofsector ~~July~~were achieved during February from short ~~positions~~position in ~~European~~coffee ~~index futures~~ as prices ~~rebounded~~decreased ~~with~~amid ~~positive~~improving ~~investor~~weather ~~sentiment after~~in ~~Greece~~Brazil, ~~and~~which ~~its~~boosted ~~creditors~~prospects ~~came~~for toa anlarger ~~agreement over economic reform~~harvest. InAdditional gains ~~the~~in ~~agricultural~~this sector, ~~losses~~ were ~~experienced~~recorded during ~~July~~March from ~~long~~short ~~soybean~~positions ~~and~~in ~~wheat~~sugar ~~futures positions~~ as prices ~~decreased~~fell ~~following~~to ~~reports~~a offive ~~strong~~year ~~U.S.~~low ~~crop~~due ~~yields and~~to ~~concern~~ample ~~that~~global ~~China’s~~supplies ~~economic~~and ~~slowdown~~a ~~will~~weak ~~reduce~~Brazilian ~~demand~~currency. ~~Short~~Within ~~futures~~the ~~positions~~energy incomplex, ~~both~~gains ~~corn~~were recorded during January and ~~wheat~~March ~~also~~from short ~~produced~~crude ~~losses~~oil ~~during~~futures ~~September~~positions as ~~grain~~ prices ~~rose~~were ~~amid~~weighed down by a ~~variety~~rising ofdollar ~~more~~and ~~bullish~~an ~~news~~oil supply glut in the marketplace. InA portion of the ~~global~~Partnership’s ~~interest~~gains ~~rate~~for ~~sector, losses~~the ~~were~~quarter ~~recorded~~was ~~during~~offset by losses incurred within the ~~first~~metals ~~half~~sector ofduring February ~~July~~and March from ~~short~~long ~~global~~precious ~~fixed~~metals ~~income~~ futures positions as prices ~~rose~~decreased asafter aconcerns ~~selloff~~eased inover ~~Chinese~~Greece ~~stocks,~~exiting ~~together~~from ~~with~~ the ~~Greek~~European ~~bailout~~Union ~~standoff,~~and ~~boosted~~the ~~demand~~ceasefire ~~for~~agreement ~~the~~in ~~relative~~Ukraine ~~safety~~reduced ~~of government securities~~demand.

The Partnership recorded total trading results including interest income totaling $2,633 and expenses totaling $1,045,872 resulting in a net loss of $1,043,239 for the nine months ended September 30, 2015. The Partnership’s net asset value per Unit decreased from $12.72 at December 31, 2014 to $12.16 at September 30, 2015.

- 22 -

During the first nine months of the year, the Partnership posted a loss in Net Asset Value per Unit as trading losses in agriculturals, global interest rates, energy and global stock indices more than offset trading gains in currencies and metals. The most significant losses were recorded within the agricultural sector during the second half of June from short corn and wheat futures positions as prices spiked due to crop concerns following heavy rainfall in the U.S. Midwest region. Additional losses were recorded during July and September from both long and short corn and wheat futures positions as prices fluctuated amid changes in crop estimates. Within the global interest rate markets, losses were incurred primarily during February, April, May and June from long positions in European and U.S. fixed income futures as prices declined as the probability the U.S. Federal Reserve would raise interest rates increased. Additional losses were incurred in this sector during the first half of July from short global fixed income futures positions as prices rose as a selloff in Chinese stocks, coupled with the Greek bailout standoff, boosted demand for the relative safety of government securities. In the energy complex, losses were primarily during February, April and June as oil prices fluctuated without consistent direction as the market assessed global demand and the value of the U.S. dollar. Within the global stock index sector, losses were recorded primarily during June from long positions in U.S., European and Asian index futures as prices decreased amid investor anxiety over Greece’s debt obligations and China’s slowing economy. Further losses in this sector were experienced during the middle of July from short positions in European index futures as prices rebounded with positive investor sentiment after Greece and its creditors came to an agreement over economic reform. A portion of the Partnership’s losses during the first nine months of the year was offset by gains experienced within the currency sector during January from short Canadian dollar and euro positions versus the U.S. dollar as the values of these two currencies decreased against the U.S. dollar after the Bank of Canada unexpectedly cut interest rates and the European Central Bank announced a larger-than-expected bond buying program. Additional gains were achieved from short euro positions versus the U.S. dollar during March and May. Further gains in currencies were achieved during the third quarter from short Canadian, Australian and New Zealand dollar positions versus the U.S. dollar as “commodity currencies” were pressured lower as global commodities prices fell. Within the metals complex, gains were achieved primarily during July from short futures positions in gold and silver as prices declined as a strengthening U.S. dollar decreased the appeal of precious metals. Additional gains were recorded during July from short base metals futures positions as prices moved lower amid concern a slowdown in the Chinese economy would weaken demand.

For the Three and Nine Months Ended September 30, 2014

The Partnership recorded total trading results including interest income totaling $3,427,157 and expenses totaling $319,052 resulting in net income of $3,108,105 for the three months ended September 30, 2014. The Partnership’s net asset value per Unit increased from $9.73 at June 30, 2014 to $11.11 at September 30, 2014.

During the third quarter, the Partnership posted a gain in net asset value per Unit from trading profits in currencies, agriculturals, global interest rates, energies, metals, and stock indices. The most significant gains were achieved within the currency sector during the third quarter from short positions in the Japanese yen and euro versus the U.S. dollar as diverging central bank policy paths contributed to a strong U.S. dollar relative to its peers. The Bank of Japan and the European Central Bank’s focus on keeping interest rates low, while the U.S. Federal Reserve indicated higher interest rates, benefited the Fund’s short currency positions. Within the agriculturals sector, gains were recorded throughout the third quarter from short positions in corn and wheat futures as prices declined amid favorable growing conditions and increased speculation of record crop yields. Within the global interest rate sector, gains were achieved primarily during August from long positions in European fixed income futures as prices advanced as investors sought the relative safety of fixed income markets following concern of escalating geopolitical tensions. European bond prices also increased as the European Central Bank moved closer to introducing a quantitative easing policy to stimulate the Eurozone. Within the energy sector, gains were incurred primary during September from short crude oil futures positions as prices declined on the back of a stronger U.S. dollar and signs of increasing production from Libya. Within the metals sector, gains were experienced during September from short positions in precious metals futures as prices declined as demand decreased on speculation that the U.S. Federal Reserve will raise U.S. interest rates. In the stock index markets, gains were achieved during July from long positions in Pacific Rim equity index futures as prices advanced after China cut reserve requirements for banks, accelerated infrastructure spending, and witnessed an increase in their manufacturing index to an 18-month high. Additional gains in this sector were experienced during August from long U.S. equity index futures positions as prices increased as improving U.S. economic growth and bullish merger and acquisition activity helped propel U.S. indexes.

The Partnership recorded total trading results including interest income totaling $1,634,889 and expenses totaling $1,367,190, resulting in net income of $267,699 for the nine months ended September 30, 2014. The Partnership’s net asset value per Unit increased from $10.54 at December 31, 2013 to $11.11 at September 30, 2014.

- 23 -

During the first nine months of the year, the Partnership posted a gain in net asset value per Unit as trading profits in global interest rates, currencies, and agriculturals more than offset losses in the global stock index, metals, and energies sectors. The most significant gains were recorded within the global interest rate sector, primarily during May from long positions in U.S. fixed income futures as prices moved higher amid expectation that Federal Reserve Chairperson Janet Yellen was backing away from raising interest rates. Additional gains in this sector were experienced during August from long positions in European fixed income futures as prices advanced as investors sought the relative safety of fixed income following concern of escalating geopolitical tensions. European bond prices also increased as the European Central Bank moved closer to introducing a quantitative easing policy to stimulate the Eurozone. Within the currency sector, gains were achieved during the third quarter from short positions in the Japanese yen and euro versus the U.S. dollar as diverging central bank policy paths contributed to a strong U.S. dollar relative to its peers. The Bank of Japan and the European Central Bank’s focus on keeping interest rates low, while the U.S. Federal Reserve indicated higher interest rates, benefited the Fund’s short currency positions. In the agricultural complex, gains were experienced during February and March from long positions in soybean futures as prices advanced after adverse weather conditions in Brazil lowered crop estimates. Additional gains were recorded throughout the third quarter from short positions in corn and wheat futures as prices declined amid favorable growing conditions and increased speculation of record crop yields. The Partnership’s trading gains for the first nine months of the year were partially offset by trading losses within the global stock index sector during January and March from long positions in U.S., European, and Asian equity index futures as prices declined following softer-than-expected economic data in the U.S. and China and global growth concerns. Additional losses in this sector were incurred during the second half of the September from long positions in U.S. equity index futures. In the metals sector, losses were recorded during January through May from both long and short positions in copper futures as prices fluctuated on varying economic news from China, the world’s largest user of the metal. Additional losses in the first half of the year were incurred from short precious metals futures positions as prices whipsawed following geopolitical concerns in Ukraine and the Middle East, which caused investor anxiety and sporadic demand for “safe-haven” assets. Further losses in this sector were experienced in late August from short positions in copper futures positions as prices increased amid signs of a strengthening economic recovery in the U.S. Within the energy sector, losses were incurred during first three months of the year from long and short positions in oil by-products as prices whipsawed as demand for heating fuel fluctuated with varying temperatures in the U.S. In the second quarter, losses were recorded from long futures positions in gasoil and oil refined products as prices whipsawed amid unexpected shifts in inventories and geopolitical concerns. Additional losses within this sector were incurred during July from long crude oil and gasoline futures positions as prices declined.

- 24 -

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Introduction

The Partnership is a commodity pool engaged primarily in the speculative trading of futures, forwards, ~~options~~ and Uoptions.S. ~~Treasury bills.~~ The market-sensitive instruments held by the Partnership are acquired for speculative trading purposes only and, as a result, all or substantially all of the Partnership’s assets are at risk of trading loss. Unlike an operating company, the risk of market-sensitive instruments is inherent to the primary business activity of the Partnership.

The futures, forwards and options on such contracts traded by the Partnership ~~and U.S. Treasury bills~~ involve varying degrees of related market risk. Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the Partnership’s open positions, and consequently in its earnings, whether realized or unrealized, and cash flow. Gains and losses on open positions of exchange-traded futures, ~~exchange-traded forward~~ and exchange-traded ~~futures-styled~~forward ~~option~~ contracts are settled daily through variation margin. Gains and losses on off-exchange-traded forward currency contracts and forward currency options contracts are settled upon termination of the contract. Gains and losses on off-exchange-traded forward currency options contracts are settled on an agreed-upon settlement date. ~~U.S. Treasury bills are fair valued at the last available bid price received from independent pricing services as of the close of business on the last business day of the reporting period.~~

The Partnership’s total market risk may increase or decrease as it is influenced by a wide variety of factors, including, but not limited to, the diversification among the Partnership’s open positions, the volatility present within the markets, and the liquidity of the markets.

The face value of the market sector instruments held by the Partnership is typically many times the applicable margin requirements. Margin requirements generally range between 2% and 15% of contract face value. Additionally, the use of leverage causes the face value of the market sector instruments held by the Partnership typically to be many times the total capitalization of the Partnership.

The Partnership’s past performance is no guarantee of its future results. Any attempt to numerically quantify the Partnership’s market risk is limited by the uncertainty of its speculative trading. The Partnership’s speculative trading and use of leverage may cause future losses and volatility (i.e., “risk of ruin”) that far exceed the Partnership’s experience to date as discussed under the “Partnership’s Value at Risk in Different Market Sectors” section and significantly exceed the Value at Risk (“VaR”) tables disclosed.

Limited partners will not be liable for losses exceeding the current net asset value of their investment.

- 2523 -

Quantifying the Partnership’s Trading Value at Risk

The following quantitative disclosures regarding the Partnership’s market risk exposures contain “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.

The Partnership accounts for open positions on the basis of fair value accounting principles. Any loss in the market value of the Partnership’s open positions is directly reflected in the Partnership’s earnings and cash flow.

The Partnership’s risk exposure in the market sectors traded by the Trading Advisor is estimated below in terms of VaR. Please note that the VaR model is used to numerically quantify market risk for historic reporting purposes only and is not utilized by either Ceres or the Trading Advisor in their daily risk management activities.

VaR is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence of market movements far exceeding expectations in the markets traded by the Partnership could result in actual trading or non-trading losses far beyond the indicated VaR or the Partnership’s experience to date (i.e., “risk of ruin”). In light of the foregoing, as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s losses in any market sector will be limited to VaR or by the Partnership’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Partnership as the measure of its VaR. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95% - 99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to VaR.

- 2624 -

The Partnership’s Value at Risk in Different Market Sectors

The following tables indicate the trading VaR associated with the Partnership’s open positions by market category as of ~~September~~ March 3031, 2016 ~~2015~~ and December 31, ~~2014~~2015, and the highest, lowest and average values during the three months ended ~~September~~March 3031, ~~2015~~2016 and for the twelve months ended December 31, ~~2014~~2015. All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. There has been no material change in the trading VaR information previously disclosed in the Form 10-K.

As of ~~September~~March 3031, ~~2015~~2016, the Partnership’s total capitalization was approximately $2321 million.

	September 30, 2015
			March 31, 2016
Primary Market Risk Category	VaR		% of Total Capitalization
			% of Total			High		Low		Average
Currency	$	1,478,313		6.48	%
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Interest Rate		588,934		2.58	%
Currency	$	1,086,446		5.19	%	$	1,655,482	$	121,146	$	699,003
Equity		365,334		1.60	%
Interest Rate		674,202		3.22			928,734		293,739		483,570
Commodity		715,556		3.14	%
Equity		806,728		3.85			968,798		171,074		406,475
Total	$	3,148,137		13.80	%
Commodity		902,748		4.31			1,406,800		717,622		973,725
Total	$	3,470,124		16.57	%

	Three Months Ended September 30, 2015
Market Sector	High VaR		Low VaR		Average VaR*
Currency		$ 1,637,684		$ 646,471		$1,066,216
Interest Rate		$ 736,181		$ 196,446		$ 360,602
Equity		$ 725,618		$ 222,168		$ 419,525
Commodity		$ 1,168,526		$ 448,702		$ 838,188

* Average of daily Values at Risk.

*As ~~Average~~ of ~~daily~~December 31, ~~VaR~~2015, the Partnership’s total capitalization was approximately $22 million.

- 27 -


			December 31, 2015

			% of Total			High		Low		Average
Market Sector	Value at Risk		Capitalization			Value at Risk		Value at Risk		Value at Risk*
Currency	$	1,652,839		7.63	%	$	2,130,340	$	-	$	1,126,511
Interest Rate		444,671		2.05			1,135,061		122,032		527,396
Equity		446,828		2.06			1,693,336		222,168		713,433
Commodity		1,491,300		6.88			1,593,779		448,702		988,115

Total	$	4,035,638		18.62	%

~~Table~~* Average of ~~Contents~~daily Values at Risk.

As of December 31, 2014, the Partnership’s total capitalization was approximately $26 million.

	December 31, 2014
Primary Market Risk Category	VaR		% of Total Capitalization
Currency	$	1,587,974		6.10	%
Interest Rate		1,017,781		3.91	%
Equity		370,946		1.43	%
Commodity		712,045		2.74	%
Total	$	3,688,746		14.18	%

	Twelve Months Ended December 31, 2014
Market Sector	High VaR		Low VaR		Average VaR*
Currency		$ 3,893,891		$ 896,387		$2,072,311
Interest Rate		$ 1,533,081		$ 421,511		$ 909,229
Equity		$ 2,493,395		$ 173,186		$1,209,329
Commodity		$ 2,504,044		$ 415,368		$1,137,918

* Average of daily VaR.

Limitations on Value at Risk as an Assessment of Market Risk

VaR models permit estimation of a portfolio’s aggregate market risk exposure, incorporating a range of varied market risks, reflect risk reduction due to portfolio diversification or hedging activities, and can cover a wide range of portfolio assets. However, VaR risk measures should be viewed in light of the methodology’s limitations, which include, but may not be limited to, the following:

●

past changes in market risk factors will not always result in accurate predictions of the distributions and correlations of future market movements;

●

changes in portfolio value caused by market movements may differ from those of the VaR model;

●

VaR results reflect past market fluctuations applied to current trading positions while future risk depends on future positions;

●

VaR using a one-day time horizon does not fully capture the market risk of positions that cannot be liquidated or hedged within one day; and

●

the historical market risk factor data used for VaR estimation may provide only limited insight into losses that could be incurred under certain unusual market movements.

- 2825 -

Non-Trading Risk

The Partnership has non-trading market risk on its foreign cash balances not needed for margin. These balances and any market risk they may represent are immaterial.

A decline in short-term interest rates would result in a decline in the Partnership’s cash management income. This cash flow risk is not considered to be material.

Materiality, as used throughout this section, is based on an assessment of reasonably possible market movements and any associated potential losses, taking into account the leverage, optionality and multiplier features of the Partnership’s market-sensitive instruments, in relation to the Partnership’s net assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the Partnership’s market risk exposures - except for (A) those disclosures that are statements of historical fact and (B) the descriptions of how the Partnership manages its primary market risk exposures - constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The Partnership’s primary market risk exposures, as well as the strategies used and to be used by Ceres and the Trading Advisor for managing such exposures, are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of the Partnership’s risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation and many other factors could result in material losses, as well as in material changes to the risk exposures and the risk management strategies of the Partnership. Investors must be prepared to lose all or substantially all of their investment in the Partnership.

Qualitative Disclosures Regarding Means of Managing Risk Exposure

The Partnership and the Trading Advisor, separately, attempt to manage the risk of the Partnership’s open positions in essentially the same manner in all market categories traded. Ceres attempts to manage market exposure by diversifying the Partnership’s assets among different market sectors through the selection of a commodity trading advisor and by daily monitoring of its performance. In addition, the Trading Advisor establishes diversification guidelines, often set in terms of the maximum margin to be committed to positions in any one market sector or market-sensitive instrument.

Ceres monitors and controls the risk of the Partnership’s non-trading instrument, cash. Cash is the only Partnership investment directed by Ceres, rather than the Trading Advisor.

- 2926 -

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of the General Partner, Ceres’ President (Ceres’ principal executive officer) and Chief Financial Officer (Ceres’ principal financial officer) have evaluated the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September~~March 3031, ~~2015~~2016. The Partnership’s disclosure controls and procedures are designed to provide reasonable assurance that information the Partnership is required to disclose in the reports that the Partnership files or submits under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the applicable rules and forms. Based on this evaluation, the President and Chief Financial Officer of Ceres have concluded that the disclosure controls and procedures of the Partnership were effective at ~~September~~March 3031, ~~2015~~2016.

Changes in Internal Control over Financial Reporting

There have been no changes during the period covered by this quarterly report in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that have materially affected or are reasonably likely to materially affect the Partnership’s internal control over financial reporting ~~other than the engagement of an Administrator to provide the services described in Note 1 of Item 1 of this Part under the supervision of the General Partner~~.

Limitations on the Effectiveness of Controls

Any control system, no matter how well designed and operated, can provide reasonable (not absolute) assurance that its objectives will be met. Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

- 3027 -

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

There are no material legal proceedings pending against the Partnership, ~~nor~~or the General Partner.

The following information supplements and amends the discussion set forth under Part I,. Item 3. “Legal Proceedings” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December ~~31,~~ ~~2014, as updated by the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March~~ 31, 2015 ~~and June 30, 2015~~.

On June 1, 2011, Morgan Stanley & Co. Incorporated converted from a Delaware corporation to a Delaware limited liability company. As a result of that conversion, Morgan Stanley & Co. Incorporated is now named Morgan Stanley & Co. LLC (“MS&Co.” ~~or the “Company”~~).

MS&Co. is a wholly -owned, indirect subsidiary of Morgan Stanley, a Delaware holding company. Morgan Stanley files periodic reports with the SEC as required by the ~~Securities~~ Exchange Act ~~of 1934~~, which include current descriptions of material litigation and material proceedings and investigations, if any, by governmental and/or regulatory agencies or self-regulatory organizations concerning ~~Morgan~~ Morgan Stanley and its subsidiaries, including MS&Co. As a consolidated subsidiary of Morgan Stanley, MS&Co. does not file its own periodic reports with the SEC that contain descriptions of material litigation, proceedings and investigations. As a result, ~~please~~we refer you to the “Legal Proceedings” section of Morgan Stanley’s SEC 10-K filings for 2015, 2014, 2013, 2012, ~~2011~~ and ~~2010~~2011.

In addition to the matters described in those filings, in the normal course of business, each of Morgan Stanley and MS&Co. has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions, and other litigation, arising in connection with its activities as a global diversified financial services institution. Certain of the legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Each of Morgan Stanley and MS&Co. is also involved, from time to time, in investigations and proceedings by governmental and/or regulatory agencies or self-regulatory organizations, certain of which may result in adverse judgments, fines or penalties. The number of these investigations and proceedings has increased in recent years with regard to many financial services institutions, including Morgan Stanley and MS&Co.

MS&Co. is a Delaware limited liability company with its main business office located at 1585 Broadway, New York, New York 10036. Among other registrations and memberships, MS&Co. is registered as a futures commission merchant and is a member of the National Futures Association.

Regulatory and Governmental Matters.

~~The~~MS&Co. ~~Company~~ has received subpoenas and requests for information from certain federal and state regulatory and governmental entities, including among others various members of the RMBS Working Group of the Financial Fraud Enforcement Task Force, such as the United States Department of Justice, Civil Division and several state Attorney General’s Offices, concerning the origination, financing, purchase, securitization and servicing of subprime and non-subprime residential mortgages and related matters such as residential mortgage backed securities (“RMBS”), collateralized debt obligations (“CDOs”), ~~structured~~ structured investment vehicles (“SIVs”) and credit default swaps backed by or referencing mortgage pass-through certificates. These matters, some of which are in advanced stages, include, but are not limited to, investigations related to ~~the~~ ~~Company~~MS&Co.’s due diligence on the loans that it purchased for securitization, ~~the Company~~MS&Co.’s communications with ratings agencies, ~~the Company~~MS&Co.’s disclosures to investors, and ~~the Company~~MS&Co.’s handling of servicing and foreclosure related issues.

On February 25, 2015, ~~the~~MS&Co. ~~Company~~ reached an agreement in principle with the United States Department of Justice, Civil Division and the United States Attorney’s Office for the Northern District of California, Civil Division (collectively, the “Civil Division”) to pay $2.6 billion to resolve certain claims that the Civil Division indicated it intended to bring against ~~the Company~~MS&Co. ~~While~~That ~~the~~settlement ~~Company~~was ~~and~~finalized ~~the~~on ~~Civil~~February ~~Division have reached an agreement in principle to resolve this matter~~10, ~~there can be no assurance that the Company and the Civil Division will agree on the final documentation of the settlement~~2016.

InOn ~~May~~April ~~2014~~1, 2016, the California Attorney General’s Office ~~(“CAAG”),~~filed ~~which~~an isaction ~~one~~against ofMS&Co. ~~the~~and ~~members of the RMBS Working Group, indicated that it has made~~ certain ~~preliminary~~affiliates ~~conclusions~~in ~~that~~California ~~the~~state ~~Company~~court ~~made~~styled ~~knowing~~California ~~and~~v. ~~material~~Morgan ~~misrepresentations~~Stanley, ~~regarding~~et ~~RMBS~~al., ~~and~~on ~~that~~behalf itof ~~knowingly~~California ~~caused~~investors, ~~material~~including ~~misrepresentations to be made regarding~~ the ~~Cheyne~~California ~~SIV,~~Public ~~which~~Employees’ Retirement ~~issued~~System ~~securities~~and ~~marketed to~~ the California ~~Public~~Teachers’ ~~Employees~~ Retirement System. The ~~CAAG~~complaint ~~has~~alleges ~~further indicated~~ that itMS&Co. ~~believes~~made ~~the~~misrepresentations ~~Company’s~~and ~~conduct~~omissions ~~violated~~regarding ~~California~~RMBS ~~law~~ and ~~that~~notes itissued ~~may~~by ~~seek~~the ~~treble~~Cheyne ~~damages~~SIV, ~~penalties~~ and ~~injunctive~~asserts ~~relief.~~violations ~~The~~of ~~Company~~the ~~does~~California ~~not agree~~False ~~with~~Claims ~~these~~Act ~~conclusions~~and other state laws and ~~has~~seeks ~~presented~~treble ~~defenses~~damages, tocivil ~~them~~penalties, todisgorgement, ~~the~~and ~~CAAG~~injunctive relief.

- 28 -

In October 2014, the Illinois Attorney General’s Office (“ILAG”) sent a letter to MS&Co. alleging that MS&Co. knowingly made misrepresentations related to RMBS purchased by certain pension funds affiliated with the State of Illinois and demanding that MS&Co. pay ILAG approximately $88 million. MS&Co. and ILAG reached an agreement to resolve the matter on February 10, 2016.

On January 13, 2015, the New York Attorney General’s Office (“NYAG”), which is also a member of the RMBS Working Group, indicated that it intends to file a lawsuit related to approximately 30 subprime securitizations sponsored by MS&Co. NYAG indicated that the lawsuit would allege that MS&Co. misrepresented or omitted material information related to the due diligence, underwriting and valuation of the loans in the securitizations and the properties securing them and indicated that its lawsuit would be brought under the Martin Act. MS&Co. and NYAG reached an agreement to resolve the matter on February 10, 2016.

On June 5, 2012, MS&Co. consented to and became the subject of an Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act, as amended, Making Findings and Imposing Remedial Sanctions by The Commodity Futures Trading Commission (“CFTC”) to resolve allegations related to the failure of a salesperson to comply with exchange rules that prohibit off-exchange futures transactions unless there is an Exchange for Related Position (“EFRP”). Specifically, the CFTC found that from April 2008 through October 2009, MS&Co. violated Section 4c(a) of the Commodity Exchange Act, as amended (the “CEA”), and CFTC Regulation 1.38 by executing, processing and reporting numerous off-exchange futures trades to the Chicago Mercantile Exchange (“CME”) and Chicago Board of Trade (“CBOT”) as EFRPs in violation of CME and CBOT rules because those trades lacked the corresponding and related cash, OTC swap, OTC option, or other OTC derivative position. In addition, the CFTC found that MS&Co. violated CFTC Regulation 166.3 by failing to supervise the handling of the trades at issue and failing to have adequate policies and procedures designed to detect and deter the violations of the CEA and CFTC Regulations. Without admitting or denying the underlying allegations and without adjudication of any issue of law or fact, MS&Co. accepted and consented to entry of findings and the imposition of a cease and desist order, a fine of $5,000,000, and undertakings related to public statements, cooperation and payment of the fine. MS&Co. entered into corresponding and related settlements with the CME and CBOT in which the CME found that MS&Co. violated CME Rules 432.Q and 538 and fined MS&Co. $750,000 and CBOT found that MS&Co. violated CBOT Rules 432.Q and 538 and fined MS&Co. $1,000,000.

On July 23, 2014, the SEC approved a settlement by MS&Co. and certain affiliates to resolve an investigation related to certain subprime RMBS transactions sponsored and underwritten by those entities in 2007. Pursuant to the settlement, MS&Co. and certain affiliates were charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act, agreed to pay disgorgement and penalties in an amount of $275 million and neither admitted nor denied the SEC’s findings.

On April 21, 2015, the Chicago Board Options Exchange, Incorporated (“CBOE”) and the CBOE Futures Exchange, LLC (“CFE”) filed statements of charges against MS&Co. in connection with trading by one of MS&Co.’s former traders of EEM options contracts that allegedly disrupted the final settlement price of the November 2012 VXEM futures. CBOE alleged that MS&Co. violated CBOE Rules 4.1, 4.2 and 4.7, Sections 9(a) and 10(b) of the Exchange Act, and Rule 10b-5 thereunder. CFE alleged that MS&Co. violated CFE Rules 608, 609 and 620. Both matters are ongoing.

On June 18, 2015, MS&Co. entered into a settlement with the SEC and paid a fine of $500,000 as part of the MCDC Initiative to resolve allegations that MS&Co. failed to form a reasonable basis through adequate due diligence for believing the truthfulness of the assertions by issuers and/or obligors regarding their compliance with previous continuing disclosure undertakings pursuant to Rule 15c2-12 in connection with offerings in which MS&Co. acted as senior or sole underwriter.

- 29 -

On August 6, 2015, MS&Co. consented to and became the subject of an order by the CFTC to resolve allegations that MS&Co. violated CFTC Regulation 22.9(a) by failing to hold sufficient US Dollars in cleared swap segregated accounts in the United States to meet all US Dollar obligations to cleared swaps customers. Specifically, the CFTC found that while MS&Co. at all times held sufficient funds in segregation to cover its obligations to its customers, on certain days during 2013 and 2014, it held currencies, such as euros, instead of US dollars, to meet its US dollar obligations. In addition, the CFTC found that MS&Co. violated CFTC Regulation 166.3 by failing to have in place adequate procedures to ensure that it complied with CFTC Regulation 22.9(a). Without admitting or denying the findings or conclusions and without adjudication of any issue of law or fact, MS&Co. accepted and consented to the entry of findings, the imposition of a cease and desist order, a civil monetary penalty of $300,000, and undertakings related to public statements, cooperation, and payment of the monetary penalty.

Civil Litigation

On December 23, 2009, the Federal Home Loan Bank of Seattle filed a complaint against MS&Co. and another defendant in the Superior Court of the State of Washington, styled Federal Home Loan Bank of Seattle v. Morgan Stanley & Co. Inc., et al. The amended complaint, filed on September 28, 2010, alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $233 million. The complaint raises claims under the Washington State Securities Act and seeks, among other things, to rescind the plaintiff’s purchase of such certificates By orders dated June 23, 2011 and July 18, 2011, the court denied defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011, the court denied MS&Co.’s individual motion to dismiss the amended complaint. On March 7, 2013, the court granted defendants’ motion to strike plaintiff’s demand for a jury trial. The defendants’ joint motions for partial summary judgment were denied on November 9, 2015. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $45 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $45 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On March 15, 2010, the Federal Home Loan Bank of San Francisco filed a complaint against MS&Co. and other defendants in the Superior Court of the State of California styled Federal Home Loan Bank of San Francisco v. Deutsche Bank Securities Inc. et al. An amended complaint, filed on June 10, 2010, alleges that defendants made untrue statements and material omissions in connection with the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly sold to plaintiff by MS&Co. was approximately $276 million. The complaint raises claims under both the federal securities laws and California law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On August 11, 2011, plaintiff’s federal securities law claims were dismissed with prejudice. On February 9, 2012, defendants’ demurrers with respect to all other claims were overruled. On December 20, 2013, plaintiff’s negligent misrepresentation claims were dismissed with prejudice. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $56 million, and the certificates had incurred actual losses of approximately $1 million. Based on currently available information, MS&Co. believes it could incur a loss for this action up to the difference between the $56 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

- 30 -

On July 15, 2010, China Development Industrial Bank (“CDIB”) filed a complaint against MS&Co., styled China Development Industrial Bank v. Morgan Stanley & Co. Incorporated et al., which is pending in the Supreme Court of the State of New York, New York County (“Supreme Court of NY”). The complaint relates to a $275 million credit default swap referencing the super senior portion of the STACK 2006-1 CDO. The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment and alleges that MS&Co. misrepresented the risks of the STACK 2006-1 CDO to CDIB, and that MS&Co. knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CDIB. The complaint seeks compensatory damages related to the approximately $228 million that CDIB alleges it has already lost under the credit default swap, rescission of CDIB’s obligation to pay an additional $12 million, punitive damages, equitable relief, fees and costs. On February 28, 2011, the court denied MS&Co.’s motion to dismiss the complaint. Based on currently available information, MS&Co. believes it could incur a loss of up to approximately $240 million plus pre- and post-judgment interest, fees and costs.

On October 15, 2010, the Federal Home Loan Bank of Chicago filed a complaint against MS&Co. and other defendants in the Circuit Court of the State of Illinois, styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation et al. A corrected amended complaint was filed on April 8, 2011. The corrected amended complaint alleges that defendants made untrue statements and material omissions in the sale to plaintiff of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans and asserts claims under Illinois law. The total amount of certificates allegedly sold to plaintiff by MS&Co. at issue in the action was approximately $203 million. The complaint seeks, among other things, to rescind the plaintiff’s purchase of such certificates. The defendants filed a motion to dismiss the corrected amended complaint on May 27, 2011, which was denied on September 19, 2012. On December 13, 2013, the court entered an order dismissing all claims related to one of the securitizations at issue. After that dismissal, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $78 million. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $50 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $50 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On April 20, 2011, the Federal Home Loan Bank of Boston filed a complaint against MS&Co. and other defendants in the Superior Court of the Commonwealth of Massachusetts styled Federal Home Loan Bank of Boston v. Ally Financial, Inc. F/K/A GMAC LLC et al. An amended complaint was filed on June 29, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $385 million. The amended complaint raises claims under the Massachusetts Uniform Securities Act, the Massachusetts Consumer Protection Act and common law and seeks, among other things, to rescind the plaintiff’s purchase of such certificates. On May 26, 2011, defendants removed the case to the United States District Court for the District of Massachusetts. The defendants’ motions to dismiss the amended complaint were granted in part and denied in part on September 30, 2013. On November 25, 2013, July 16, 2014, and May 19, 2015, respectively, the plaintiff voluntarily dismissed its claims against MS&Co. with respect to three of the securitizations at issue. After these voluntary dismissals, the remaining amount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $332 million. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $54 million, and the certificates had not yet incurred actual losses. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $54 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

- 31 -

On ~~September~~May 163, ~~2014~~2013, ~~the~~plaintiffs ~~Virginia~~in ~~Attorney~~Deutsche ~~General’s~~Zentral-Genossenschaftsbank ~~Office~~AG ~~filed~~et aal. ~~civil~~v. ~~lawsuit, styled~~Morgan ~~Commonwealth~~Stanley ofet ~~Virginia ex rel~~al. ~~Integra~~filed ~~REC~~a ~~LLC~~complaint v.against ~~Barclays Capital Inc~~MS&Co., etcertain ~~al.~~affiliates, ~~against the Company~~ and ~~several~~ other defendants in the ~~Circuit~~Supreme Court of ~~the~~NY. ~~City~~The ofcomplaint ~~Richmond~~alleges ~~related~~that todefendants ~~RMBS.~~made ~~The~~material ~~lawsuit~~misrepresentations ~~alleges~~and ~~that~~omissions in the ~~Company~~sale ~~and~~to ~~the~~plaintiffs of certain ~~other~~mortgage ~~defendants~~pass-through ~~knowingly~~certificates ~~made~~backed ~~misrepresentations~~by ~~and~~securitization ~~omissions~~trusts ~~related~~containing toresidential ~~the~~mortgage loans. ~~backing~~The ~~RMBS~~total ~~purchased~~amount of certificates allegedly sponsored, underwritten and/or sold by ~~the~~MS&Co. ~~Virginia~~to ~~Retirement~~plaintiff ~~System~~currently ~~(“VRS”)~~at issue in this action was approximately $644 million. The complaint alleges ~~VRS~~causes ~~suffered~~of ~~total~~action ~~losses~~against ofMS&Co. ~~approximately~~for ~~$384~~common ~~million~~law onfraud, ~~these securities~~fraudulent concealment, ~~but~~aiding ~~does~~and ~~not~~abetting ~~specify~~fraud, ~~the~~negligent ~~amount~~misrepresentation, ofand ~~alleged~~rescission ~~losses~~and ~~attributable~~seeks, toamong ~~RMBS~~other ~~sponsored~~things, orcompensatory and ~~underwritten~~punitive bydamages. On June 10, 2014, the ~~Company~~court granted in part and denied in part MS&Co.’s ~~The~~motion to dismiss the complaint. ~~asserts~~MS&Co. ~~claims~~perfected ~~under~~its ~~the~~appeal ~~Virginia~~from ~~Fraud~~that ~~Against~~decision ~~Taxpayers~~on ~~Act~~June 12, as2015. ~~well~~At asMarch 25, ~~common~~2016, ~~law~~the current ~~claims~~unpaid balance of ~~actual~~the ~~and constructive~~mortgage ~~fraud~~pass-through certificates at issue in this action was approximately $263 million, and ~~seeks,~~the ~~among~~certificates ~~other~~had ~~things,~~incurred ~~treble~~actual ~~damages~~losses ~~and~~of ~~civil~~approximately ~~penalties~~$84 million. OnBased ~~January 20,~~on ~~2015~~currently available information, MS&Co. ~~the~~believes ~~defendants~~it ~~filed~~could incur a ~~demurrer~~loss in this action up to the ~~complaint~~difference between the $263 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a ~~plea~~judgment inagainst ~~bar~~MS&Co., ~~seeking~~or ~~dismissal~~upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to be indemnified for some of ~~the~~these ~~complaint~~losses.

~~In October~~On May ~~2014~~17, ~~the~~2013, ~~Illinois~~plaintiff ~~Attorney~~in ~~General’s~~IKB ~~Office~~International ~~(“IL~~S.A. ~~AG”)~~in ~~sent~~Liquidation, et al. v. Morgan Stanley, et al. filed a ~~letter~~complaint toagainst ~~the~~MS&Co. ~~Company~~and ~~alleging~~certain ~~that~~affiliates in the ~~Company~~Supreme ~~knowingly~~Court of NY. The complaint alleges that defendants made material misrepresentations ~~related~~and omissions in the sale to ~~RMBS~~plaintiff ~~purchased~~of certain mortgage pass-through certificates backed by ~~certain~~securitization ~~pension~~trusts ~~funds~~containing ~~affiliated~~residential ~~with~~mortgage ~~the~~loans. ~~State~~The total amount of ~~Illinois~~certificates allegedly sponsored, underwritten and/or ~~demanding~~sold ~~that~~by MS&Co. to plaintiff was approximately $132 million. The complaint alleges causes of action against MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, and negligent misrepresentation, and seeks, among other things, compensatory and punitive damages. On October 29, 2014, the ~~Company~~court ~~pay~~granted in part and denied in part MS&Co.’s motion to dismiss. All claims regarding four certificates were dismissed. After these dismissals, the ILremaining AGamount of certificates allegedly issued by MS&Co. or sold to plaintiff by MS&Co. was approximately $88116 million. ~~The~~On ~~Company~~August ~~does~~26, ~~not~~2015, ~~agree~~MS&Co. ~~with~~perfected its appeal from the court’s October 29, 2014 decision. At March 25, 2016, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $28 million, and the certificates had incurred actual losses of $58 million. Based on currently available information, MS&Co. believes it could incur a loss in this action up to the difference between the $28 million unpaid balance of these ~~allegations~~certificates (plus any losses incurred) and ~~has~~their ~~presented~~fair market value at the time of a judgment ~~defenses~~against MS&Co., or upon sale, plus pre- and post-judgment interest, fees and costs. MS&Co. may be entitled to ~~them~~be indemnified for some of these losses and to an offset for interest received by the ILplaintiff AGprior to a judgment.

OnSettled ~~January 13,~~Civil ~~2015,~~Litigation the New York Attorney General’s Office (“NYAG”), which is also a member of the RMBS Working Group, indicated that it intends to file a lawsuit related to approximately 30 subprime securitizations sponsored by the Company. NYAG indicated that the lawsuit would allege that the Company misrepresented or omitted material information related to the due diligence, underwriting and valuation of the loans in the securitizations and the properties securing them and indicated that its lawsuit would be brought under the Martin Act. The Company does not agree with NYAG’s allegations and has presented defenses to them to NYAG.

On August ~~June 5~~25, ~~2012~~2008, ~~the~~MS&Co. ~~Company consented to~~ and ~~became~~two ~~the~~ratings ~~subject~~agencies ofwere annamed ~~Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act,~~ as ~~amended,~~defendants ~~Making~~in ~~Findings~~a ~~and~~purported ~~Imposing~~class ~~Remedial~~action ~~Sanctions~~related ~~by The Commodity Futures Trading Commission (the “CFTC”)~~ to ~~resolve~~securities ~~allegations~~issued ~~related to~~by ~~the failure of~~ a ~~salesperson~~structured toinvestment ~~comply~~vehicle ~~with~~called ~~exchange~~Cheyne ~~rules~~Finance ~~that~~PLC ~~prohibit~~and ~~off-exchange~~Cheyne ~~futures~~Finance ~~transactions~~LLC ~~unless~~(together, ~~there~~the ~~is an Exchange for Related Position (~~“~~EFRP~~Cheyne SIV”). ~~Specifically,~~The ~~the~~case ~~CFTC~~was ~~found~~styled ~~that~~Abu ~~from~~Dhabi ~~April~~Commercial ~~2008 through October 2009~~Bank, ~~the~~et ~~Company~~al. ~~violated~~v. ~~Section 4c(a)~~Morgan ofStanley ~~the~~& ~~Commodity Exchange Act and Commission Regulation 1~~Co.38 ~~by executing~~Inc., ~~processing~~et ~~and~~al. ~~reporting~~The ~~numerous~~complaint off-exchange futures trades to the Chicago Mercantile Exchange (“CME”) and Chicago Board of Trade (“CBOT”) as EFRPs in violation of CME and CBOT rules because those trades lacked the corresponding and related cashalleged, ~~OTC~~among ~~swap, OTC option, or~~ other ~~OTC derivative position. In addition~~things, ~~the CFTC found~~ that the ~~Company violated~~ratings ~~CFTC~~assigned ~~Regulation 166.3 by failing~~ to ~~supervise~~ the ~~handling~~securities ofissued by the ~~trades~~Cheyne atSIV ~~issue~~were ~~and~~false ~~failing to have adequate policies~~ and misleading, ~~procedures~~including ~~designed~~because tothe ~~detect~~ratings ~~and~~did ~~deter~~not ~~the~~accurately ~~violations~~reflect of the ~~Act~~risks ~~and~~associated ~~Regulations.~~with ~~Without admitting or denying~~ the ~~underlying~~ ~~allegations~~subprime ~~and~~RMBS ~~without~~held ~~adjudication~~by ~~of any issue of law or fact,~~ the ~~Company~~Cheyne ~~accepted~~SIV. ~~and~~The ~~consented~~plaintiffs toasserted ~~entry~~allegations of ~~findings~~aiding and ~~the~~abetting ~~imposition~~fraud ~~of a cease~~ and ~~desist~~negligent ~~order,~~misrepresentation arelating ~~fine of $5,000,000, and undertakings related~~ to ~~public statements,~~ ~~cooperation~~approximately ~~and~~$852 ~~payment~~million of ~~the~~securities ~~fine.~~issued ~~The~~by ~~Company~~the ~~entered~~Cheyne ~~into~~SIV. ~~corresponding~~On ~~and~~April ~~related~~24, ~~settlements~~2013, ~~with~~ the ~~CME~~parties ~~and~~reached ~~CBOT~~an inagreement ~~which~~to ~~the~~settle ~~CME found that~~ the ~~Company~~case, ~~violated CME Rules 432.Q~~ and ~~538~~on ~~and~~April ~~fined~~26, ~~the Company $750~~2013,~~000~~ ~~and~~the ~~CBOT~~court ~~found~~dismissed ~~that~~ the ~~Company~~ ~~violated~~action ~~CBOT~~with ~~Rules 432~~prejudice.Q ~~and 538 and fined the Company $1,000,000.~~

On July 23, 2014, the SEC approved a settlement by MS&Co. and certain affiliates to resolve an investigation related to certain subprime RMBS transactions sponsored and underwritten by those entities in 2007. Pursuant to the settlement, MS&Co. and certain affiliates were charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, as amended, agreed to pay disgorgement and penalties in an amount of $275 million and neither admitted nor denied the SEC’s findings.

On April 21, 2015, the Chicago Board Options Exchange, Incorporated (“CBOE”) and the CBOE Futures Exchange, LLC (“CFE”) filed statements of charges against the Company in connection with trading by one of the Company’s former traders of EEM options contracts that allegedly disrupted the final settlement price of the November 2012 VXEM futures. CBOE alleged that the Company violated CBOE Rules 4.1, 4.2 and 4.7, Sections 9(a) and 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. CFE alleged that the Company violated CFE Rules 608, 609 and 620. Both matters are ongoing.

On June 18, 2015, the Company entered into a settlement with the SEC and paid a fine of $500,000 as part of the Municipalities Continuing Disclosure Cooperation Initiative to resolve allegations that the Company failed to form a reasonable basis through adequate due diligence for believing the truthfulness of the assertions by issuers and/or obligors regarding their compliance with previous continuing disclosure undertakings pursuant to Rule 15c2-12 in connection with offerings in which the Company acted as senior or sole underwriter.

- 32 -

On ~~August~~March 615, ~~2015~~2010, the ~~Company~~Federal ~~consented~~Home toLoan ~~and~~Bank ~~became the subject~~ of anSan ~~order~~Francisco byfiled ~~the~~a ~~CFTC~~complaint ~~to resolve~~against ~~allegations~~MS&Co. ~~that~~and ~~the~~other ~~Company~~defendants ~~violated~~in the ~~CFTC~~Superior ~~Regulation~~Court ~~22.9(a)~~of bythe ~~failing~~State toof ~~hold~~California ~~sufficient~~styled USFederal ~~Dollars~~Home inLoan ~~cleared~~Bank ~~swap~~of ~~segregated~~San ~~accounts~~Francisco v. inCredit ~~the~~Suisse ~~United~~Securities ~~States~~(USA) toLLC, ~~meet~~et ~~all~~al. USAn ~~Dollar~~amended ~~obligations~~complaint tofiled ~~cleared~~on ~~swaps customers. Specifically~~June 10, ~~the~~2010 ~~CFTC~~alleged ~~found~~ that ~~while~~defendants ~~the~~made ~~Company~~untrue atstatements ~~all~~and ~~times~~material ~~held~~omissions ~~sufficient funds~~ in ~~segregation~~connection towith ~~cover~~the ~~its~~sale ~~obligations~~ to ~~its~~plaintiff ~~customers,~~of a onnumber ~~certain~~of mortgage ~~days~~pass-through ~~during~~certificates ~~2013~~backed ~~and~~by ~~2014,~~securitization ittrusts ~~held~~containing ~~currencies,~~residential ~~such~~mortgage asloans. ~~euros,~~The ~~instead~~amount of certificates USallegedly ~~dollars,~~sold to ~~meet~~plaintiff ~~its~~by ~~US dollar obligations~~MS&Co. In ~~addition,~~was ~~the~~approximately ~~CFTC~~$704 ~~found~~million. ~~that~~The ~~the~~complaint ~~Company~~raised ~~violated~~claims ~~Regulation~~under ~~166.3~~both bythe ~~failing~~federal tosecurities ~~have~~laws inand ~~place~~California ~~adequate~~law ~~procedures~~and tosought, ~~ensure~~among ~~that~~other ~~it complied with Regulation 22.9(a).~~things, ~~Without~~to ~~admitting or denying~~ rescind the ~~findings or~~plaintiff’s ~~conclusions~~purchase ~~and without adjudication~~ of ~~any~~such ~~issue~~certificates. ofOn ~~law~~January or26, ~~fact~~2015, ~~the~~as ~~Company~~a ~~accepted~~result ~~and~~of ~~consented~~a tosettlement ~~the~~with ~~entry~~certain ofother ~~findings~~defendants, the ~~imposition~~plaintiff ofrequested aand ~~cease~~the ~~and~~court ~~desist~~subsequently ~~order,~~entered a ~~civil~~dismissal ~~monetary~~with ~~penalty~~prejudice of ~~$300,000,~~certain ~~and~~of ~~undertakings~~the ~~related~~plaintiff’s toclaims, ~~public~~including ~~statements,~~all ~~cooperation,~~remaining ~~and~~claims ~~payment~~against ~~of the monetary penalty~~MS&Co.

~~Other~~On ~~Litigation~~July 9, 2010 and February 11, 2011, Cambridge Place Investment Management Inc. filed two separate complaints against MS&Co. and/or its affiliates and other defendants in the Superior Court of the Commonwealth of Massachusetts, both styled Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaints asserted claims on behalf of certain clients of plaintiff’s affiliates and allege that defendants made untrue statements and material omissions in the sale of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by MS&Co. and/or its affiliates or sold to plaintiff’s affiliates’ clients by MS&Co. and/or its affiliates in the two matters was approximately $263 million. On February 11, 2014, the parties entered into an agreement to settle the litigation. On February 20, 2014, the court dismissed the action.

On ~~December 23,~~October ~~2009~~25, ~~the Federal Home Loan Bank of Seattle filed a complaint against the Company and another defendant in the Superior Court of the State of Washington~~2010, ~~styled Federal Home Loan Bank of Seattle v. Morgan Stanley~~ MS& Co. ~~Inc.~~, etcertain ~~al. The~~affiliates ~~amended~~and ~~complaint,~~Pinnacle ~~filed~~Performance ~~on September 28~~Limited, ~~2010,~~a ~~alleges~~special ~~that~~purpose ~~defendants~~vehicle ~~made~~(“SPV”), ~~untrue~~were ~~statements and material~~named ~~omissions~~as defendants in ~~the~~a ~~sale~~purported toclass ~~plaintiff~~action ofin ~~certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sold to plaintiff by~~ the ~~Company~~United ~~was~~States ~~approximately $233~~District ~~million. The~~Court ~~complaint~~for ~~raises claims under~~ the ~~Washington~~Southern ~~State~~District ~~Securities~~of ~~Act~~New ~~and~~York ~~seeks~~(“SDNY”), ~~among~~styled ~~other~~Ge ~~things~~Dandong, to ~~rescind the~~et ~~plaintiff’s~~al. ~~purchase~~v. ofPinnacle ~~such~~Performance ~~certificates~~Ltd. ~~On October 18~~, ~~2010,~~et ~~defendants filed a motion to dismiss the action~~al. ByOn ~~orders~~January ~~dated June 23~~31, ~~2011 and July 18~~2014, ~~2011,~~ the ~~court~~plaintiffs ~~denied~~in ~~defendants’ omnibus motion to dismiss plaintiff’s amended complaint and on August 15, 2011,~~ the ~~court denied the~~ ~~Company’s~~action, ~~individual~~which ~~motion~~related to ~~dismiss~~securities ~~the~~issued ~~amended~~by ~~complaint.~~the OnSPV ~~March 7,~~in ~~2013~~Singapore, ~~the~~filed ~~court granted defendants’ motion to strike plaintiff’s demand for~~ a ~~jury~~second ~~trial.~~amended ~~At September 25~~complaint, ~~2015,~~which ~~the~~asserted ~~current~~common ~~unpaid~~law ~~balance~~claims of ~~the mortgage~~fraud, ~~pass-through~~aiding ~~certificates~~and atabetting ~~issue~~fraud, infraudulent ~~this~~inducement, ~~action~~aiding ~~was~~and ~~approximately~~abetting ~~$48~~fraudulent ~~million~~inducement, and ~~the certificates had not yet incurred actual losses. Based on currently available information, the Company believes it could incur a loss in this action up~~breach toof the ~~difference~~implied ~~between~~covenant ~~the $48 million unpaid balance~~ of ~~these~~good ~~certificates~~faith ~~(plus any losses incurred)~~ and ~~their~~ fair ~~market~~dealing. ~~value~~On atJuly ~~the time of a judgment against the Company~~17, ~~plus pre- and post-judgment interest~~2014, ~~fees~~the ~~and~~parties ~~costs.~~reached ~~The~~an ~~Company may~~agreement ~~be entitled~~ to besettle ~~indemnified~~the ~~for~~litigation, ~~some~~which ~~of these losses and to an offset for interest~~ received byfinal ~~the~~court ~~plaintiff~~approval ~~prior~~on toJuly a2, ~~judgment~~2015.

On ~~March 15~~July 5, ~~2010~~ 2011, ~~the~~Allstate ~~Federal~~Insurance ~~Home~~Company ~~Loan~~and ~~Bank~~certain of ~~San~~its ~~Francisco~~affiliated entities filed ~~two~~a ~~complaints~~complaint against ~~the~~MS&Co. ~~Company and other defendants~~ in the ~~Superior~~Supreme Court of ~~the~~NY, ~~State of California. These actions are~~ styled ~~Federal~~Allstate ~~Home~~Insurance ~~Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC~~Company, et al.~~, and~~ ~~Federal Home Loan Bank of San Francisco~~ v. ~~Deutsche~~Morgan ~~Bank~~Stanley, ~~Securities Inc.~~ et al., ~~respectively.~~An ~~Amended~~amended ~~complaints~~complaint was filed on ~~June 10~~September 9, ~~2010~~2011, ~~allege~~and alleges that the defendants made untrue statements and material omissions in ~~connection with~~ the sale to ~~plaintiff~~the ~~of a~~plaintiffs ~~number~~ of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly ~~sold to~~issued ~~plaintiff~~and/or bysold to the ~~Company~~plaintiffs inby ~~these~~MS&Co. ~~cases~~ was approximately $~~704~~104 million ~~and $276 million, respectively~~. The ~~complaints raise claims under both the federal securities laws and California law and seek, among other things, to rescind the~~ ~~plaintiff’s~~complaint ~~purchase~~raised ofcommon ~~such certificates. On August 11, 2011, plaintiff’s federal securities~~ law claims ~~were~~of ~~dismissed with prejudice. The defendants filed answers to the amended complaints on October 7~~fraud, ~~2011.~~fraudulent ~~On February 9~~inducement, ~~2012,~~aiding ~~defendants’~~and ~~demurrers~~abetting ~~with respect to all other claims were overruled. On December 20~~fraud, ~~2013,~~and ~~plaintiff’s~~ negligent misrepresentation ~~claims~~and ~~were dismissed with prejudice. On January 26~~seeks, ~~2015,~~among ~~as a result of a settlement with certain~~ other ~~defendants~~things, ~~the~~compensatory ~~plaintiff requested~~ and/or ~~the~~recessionary ~~court~~damages ~~subsequently~~associated ~~entered a dismissal~~ with ~~prejudice of certain of~~ the ~~plaintiff~~plaintiffs’s ~~claims,~~purchases ~~including all remaining claims against the Company in the Federal Home~~of ~~Loan~~such ~~Bank of San Francisco v~~certificates. ~~Credit~~On ~~Suisse~~March ~~Securities (USA) LLC~~15, ~~et al. action. On February 18~~2013, ~~2015,~~ the court ~~entered~~denied anin ~~order~~substantial ~~setting~~part ~~a number of claims for trial throughout 2016. Claims against~~ the ~~Company~~defendants’ ~~have~~motion ~~not~~to ~~yet~~dismiss ~~been set for trial. At September 25, 2015,~~ the ~~current~~amended ~~unpaid balance of the mortgage pass-through certificates at issue in these cases was approximately $61 million~~complaint, ~~and~~which ~~the~~order ~~certificates had incurred actual losses of approximately $1 million~~MS&Co. ~~Based~~appealed on ~~currently~~ ~~available~~April ~~information~~11, ~~the~~2013. ~~Company~~On ~~believes~~May it3, ~~could~~2013, ~~incur~~MS&Co. afiled ~~loss~~its ~~for~~answer ~~this action up~~ to the ~~difference between the $61 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a~~amended ~~judgment~~complaint. ~~against~~On ~~the~~January ~~Company~~16, ~~or upon sale~~2015, ~~plus~~the ~~pre-~~parties ~~and~~reached ~~post-judgment~~an ~~interest,~~agreement ~~fees and costs. The Company may be entitled~~ to besettle ~~indemnified for some of these losses and to an offset for interest received by~~ the ~~plaintiff prior to a judgment~~litigation.

On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against MS&Co. and other defendants in the Court of Common Pleas in Ohio, styled Western and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by MS&Co. was approximately $153 million. On June 8, 2015, the parties reached an agreement to settle the litigation.

- 33 -

On ~~July~~September 152, ~~2010~~2011, ~~China~~the ~~Development~~Federal ~~Industrial~~Housing ~~Bank~~Finance Agency (“~~CDIB~~FHFA”), ~~filed~~as aconservator for ~~complaint~~Fannie ~~against~~Mae and ~~the Company~~Freddie Mac, ~~styled~~filed ~~China~~17 ~~Development~~complaints ~~Industrial~~against ~~Bank~~numerous v.financial ~~Morgan~~services ~~Stanley &~~companies, including MS&Co. ~~Incorporated~~and etcertain alaffiliates., ~~which~~A iscomplaint ~~pending~~against inMS&Co. ~~the~~and ~~Supreme~~certain ~~Court~~affiliates ofand ~~the~~other ~~State~~defendants ofwas ~~New~~filed ~~York,~~in ~~New~~the ~~York County (“~~Supreme Court of NY~~”).~~, ~~The~~styled ~~complaint~~Federal ~~relates to~~Housing aFinance ~~$275 million~~Agency, ~~credit~~as ~~default~~Conservator ~~swap~~v. ~~referencing~~Morgan ~~the~~Stanley ~~super~~et ~~senior portion of the STACK 2006-1 CDO~~al. The complaint ~~asserts~~alleges ~~claims~~that ~~for~~defendants ~~common~~made ~~law~~untrue ~~fraud,~~statements ~~fraudulent inducement~~ and ~~fraudulent~~material ~~concealment~~omissions ~~and~~in ~~alleges~~connection ~~that~~with the ~~Company~~sale ~~misrepresented the risks of the STACK 2006-1 CDO~~ to ~~CDIB,~~Fannie Mae and ~~that~~Freddie ~~the~~Mac of residential ~~Company~~mortgage ~~knew~~pass-through ~~that~~certificates ~~the~~with ~~assets~~an ~~backing~~original ~~the~~unpaid ~~CDO~~balance ~~were~~ of ~~poor~~approximately ~~quality~~$11 ~~when it entered into the credit default swap with CDIB~~billion. The complaint ~~seeks~~raised ~~compensatory~~claims ~~damages~~under ~~related~~federal toand ~~the~~state ~~approximately $228~~securities ~~million~~laws ~~that~~and ~~CDIB~~common ~~alleges~~law itand ~~has~~seeks, ~~already~~among ~~lost~~other ~~under the credit default swap~~things, rescission ofand compensatory ~~CDIB’s~~and ~~obligation to pay an additional $12 million,~~ punitive damages~~, equitable relief, fees and costs~~. On February 28 7, ~~2011~~2014, the ~~court~~ ~~denied~~parties ~~the~~entered ~~Company’s~~into ~~motion~~an agreement to ~~dismiss~~settle the ~~complaint~~litigation. ~~Based~~On onFebruary ~~currently~~20, ~~available information~~2014, the ~~Company~~court ~~believes~~dismissed itthe ~~could incur a loss of up to approximately $240 million plus pre- and post-judgment interest, fees and costs~~action.

On ~~October 15~~April 25, ~~2010~~2012, ~~the~~ ~~Federal~~Metropolitan ~~Home~~Life ~~Loan~~Insurance ~~Bank~~Company ofand ~~Chicago~~certain affiliates filed a complaint against ~~the~~MS&Co. ~~Company~~ and ~~other~~certain ~~defendants~~affiliates in ~~the Circuit~~ ~~Court of~~ the ~~State~~Supreme Court of ~~Illinois~~NY, styled ~~Federal~~Metropolitan ~~Home~~Life ~~Loan~~Insurance ~~Bank~~Company, ~~of Chicago~~ et al. v. ~~Bank~~ ofMorgan ~~America~~Stanley, ~~Funding Corporation~~ et al. AAn ~~corrected~~ amended complaint was filed on ~~April 8~~June 29, ~~2011.~~2012, ~~The~~and ~~corrected amended complaint~~ alleges that the defendants made untrue statements and material omissions in the sale to ~~plaintiff~~the plaintiffs of a ~~number~~certain of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans ~~and asserts claims under Illinois law~~. The total amount of certificates allegedly ~~sold~~sponsored, tounderwritten, ~~plaintiff~~and/or sold by ~~the~~MS&Co. ~~Company at issue in the action~~ was ~~approximately~~ approximately $~~203~~758 million. The ~~complaint seeks, among other things, to rescind the plaintiff’s purchase of such certificates. The defendants filed a motion to dismiss the corrected~~ amended complaint onraised ~~May 27,~~common ~~2011,~~law ~~which~~claims ~~was~~of ~~denied on September 19~~fraud, ~~2012.~~fraudulent ~~On December 13~~inducement, ~~2013,~~and ~~the~~aiding ~~court~~and ~~entered~~abetting anfraud ~~order~~and ~~dismissing all claims related to one of the securitizations at issue. After that dismissal~~seeks, ~~the~~among ~~remaining~~other ~~amount of certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $78 million. At September 25~~things, ~~2015~~rescission, ~~the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $52 million~~compensatory, and/or ~~the~~rescissionary ~~certificates had not yet incurred actual losses. Based on currently available information~~damages, ~~the~~as ~~Company~~well ~~believes~~as itpunitive ~~could incur a~~damages, ~~loss~~associated inwith ~~this action up to~~ the ~~difference~~plaintiffs’ ~~between~~purchases ~~the $52 million unpaid balance~~ of ~~these~~such certificates. ~~(plus~~On ~~any~~April ~~losses incurred) and their fair market value at the time of a judgment against the Company~~11, ~~plus pre- and post-judgment interest~~2014, ~~fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by~~ the ~~plaintiff~~parties ~~prior~~entered tointo a ~~judgment~~settlement agreement.

On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against ~~the~~MS&Co. ~~Company~~ and certain affiliates in the Superior Court of the State of New Jersey, styled The Prudential Insurance Company of America, et al. v. Morgan Stanley, et al. On October 16, 2012, plaintiffs filed an amended complaint. The amended complaint ~~alleges~~ alleged that defendants made untrue statements and material omissions in connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by ~~the~~MS&Co. ~~Company~~was is approximately $1.073 billion. The amended complaint raises claims under the New Jersey Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud, fraudulent inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey ~~Racketeer~~RICO ~~Influenced and Corrupt Organizations Act~~statute, and includes a claim for treble damages. On ~~March 15, 2013, the court denied the defendants’ motion to dismiss the amended complaint. On~~ January 28, ~~2015~~2016, the ~~court~~parties ~~denied~~reached ~~defendants’~~an ~~renewed~~agreement ~~motion~~ to ~~dismiss~~settle the ~~amended complaint~~litigation. ~~At September 25, 2015, the current unpaid balance of the mortgage pass-through certificates at~~ issue in this action was approximately $581 million, and the certificates had not yet incurred actual losses. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $581 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, or upon sale, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

OnIn ~~April 20,~~re ~~2011,~~Morgan ~~the~~Stanley ~~Federal Home~~Mortgage ~~Loan~~Pass-Through ~~Bank~~Certificates ofLitigation, ~~Boston~~which ~~filed~~had abeen ~~complaint~~pending ~~against the Company and other defendants~~ in the ~~Superior Court of the Commonwealth of Massachusetts styled Federal Home Loan Bank of Boston v. Ally Financial~~SDNY, ~~Inc.~~was ~~F/K/A~~a ~~GMAC~~putative ~~LLC et al. An amended~~class ~~complaint~~action ~~was~~involving ~~filed~~allegations ~~on June 29~~that, ~~2012~~among ~~and~~other ~~alleges~~things, ~~that~~the ~~defendants~~registration ~~made untrue~~ statements and ~~material~~offering ~~omissions~~documents inrelated ~~the sale~~ to ~~plaintiff~~the offerings of certain mortgage pass-through certificates ~~backed~~in by2006 ~~securitization~~and ~~trusts~~2007 ~~containing~~contained ~~residential mortgage~~false ~~loans.~~and ~~The~~misleading ~~total~~information ~~amount of certificates allegedly issued by~~ concerning the ~~Company~~pools orof ~~sold~~residential toloans ~~plaintiff~~that bybacked ~~the~~these ~~Company was approximately $385 million~~securitizations. ~~The~~On ~~amended~~December ~~complaint raises claims under the Massachusetts Uniform Securities Act~~18, ~~the Massachusetts Consumer Protection Act and common law and seeks~~2014, ~~among other things, to rescind~~ the ~~plaintiff~~parties’s ~~purchase~~agreement ~~of such certificates. On May 26, 2011, defendants removed the case~~ to ~~the~~settle ~~United States District Court for~~ the ~~District of~~litigation ~~Massachusetts.~~received Onfinal ~~October 11,~~court ~~2012~~approval, ~~defendants~~and ~~filed~~on ~~motions~~December ~~to dismiss the amended complaint~~19, ~~which were granted in part and denied in part on September 30~~2014, ~~2013.~~the ~~The~~court ~~defendants~~entered ~~filed~~ an ~~answer~~order todismissing the ~~amended complaint on~~ ~~December 16, 2013~~action. ~~Plaintiff has voluntarily dismissed its claims against the Company with respect to two of the securitizations at issue, such that the remaining amount of~~

On November 4, 2011, the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank S.S.B, filed two complaints against MS&Co. in the District Court of the State of Texas. Each was styled Federal Deposit Insurance Corporation as Receiver for Franklin Bank, S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that MS&Co. made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to plaintiff by MS&Co. in these cases was approximately $67 million and $35 million, respectively. On July 2, 2015, the parties reached an agreement to settle the litigation.

On February 14, 2013, Bank Hapoalim B.M. filed a complaint against MS&Co. and certain affiliates in the Supreme Court of NY, styled Bank Hapoalim B.M. v. Morgan Stanley et al. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by MS&Co. to plaintiff was approximately $141 million. On July 28, 2015, the parties reached an agreement to settle the litigation, and on August 12, 2015, the plaintiff filed a stipulation of discontinuance with prejudice.

- 34 -

~~certificates~~On ~~allegedly~~September 23, ~~issued~~2013, by the ~~Company or sold to~~ plaintiff byin ~~the~~National ~~Company~~Credit isUnion ~~approximately~~Administration ~~$358~~Board ~~million~~v. Morgan ~~At September~~Stanley ~~25,~~& ~~2015~~Co. Inc., ~~the~~et ~~current~~al. ~~unpaid~~filed ~~balance~~a ofcomplaint ~~the~~against ~~mortgage~~MS&Co. ~~pass-through certificates~~and atcertain ~~issue~~affiliates in ~~this~~the ~~action~~SDNY. ~~was~~The ~~approximately~~complaint ~~$56~~alleged ~~million,~~that ~~and~~defendants ~~the~~made ~~certificates~~untrue ~~had~~statements ~~not~~of ~~yet~~material ~~incurred~~fact ~~actual~~or ~~losses.~~omitted ~~Based~~to onstate ~~currently~~material ~~available~~facts ~~information,~~in the ~~Company~~sale ~~believes~~to the itplaintiff ~~could~~of ~~incur~~certain amortgage ~~loss~~pass-through incertificates ~~this~~issued ~~action~~by upsecuritization totrusts ~~the~~containing ~~difference between~~residential ~~the~~mortgage ~~$56~~loans. ~~million~~The ~~unpaid~~total ~~balance~~amount of ~~these~~ certificates ~~(plus~~allegedly ~~any~~sponsored, ~~losses~~underwritten ~~incurred)~~ and/or ~~their~~sold ~~fair~~by ~~market~~MS&Co. ~~value~~to atplaintiffs ~~the~~in ~~time of a judgment against~~ the matter ~~Company,~~was orapproximately ~~upon~~$417 ~~sale,~~million. ~~plus~~The ~~pre-~~complaint ~~and~~alleged ~~post-judgment~~violations ~~interest,~~of ~~fees~~federal and ~~costs.~~various ~~The~~state ~~Company~~securities ~~may~~laws ~~be entitled~~and tosought, beamong ~~indemnified~~other ~~for~~things, ~~some~~rescissionary ~~of these losses~~ and tocompensatory andamages. ~~offset~~On ~~for~~November 23, ~~interest~~2015, ~~received by~~ the ~~plaintiff~~parties ~~prior~~reached an agreement to asettle ~~judgment~~the matter.

On ~~May~~September 316, ~~2013~~2014, ~~plaintiffs~~ inthe ~~Deutsche~~Virginia ~~Zentral-Genossenschaftsbank~~Attorney AGGeneral’s etOffice ~~al.~~filed v.a ~~Morgan~~civil ~~Stanley~~lawsuit, etstyled Commonwealth alof Virginia ex rel. ~~filed~~Integra aREC ~~complaint~~LLC ~~against~~v. ~~the~~Barclays ~~Company~~Capital Inc., ~~certain~~et ~~affiliates~~al., against MS&Co. and several other defendants in the ~~Supreme~~Circuit Court of NYthe City of Richmond related to RMBS. The ~~complaint~~lawsuit ~~alleges~~alleged that MS&Co. and the other defendants knowingly made ~~material~~ misrepresentations and omissions inrelated ~~the sale~~ to ~~plaintiffs~~the ofloans ~~certain~~backing ~~mortgage~~RMBS ~~pass-through~~purchased ~~certificates backed~~ by ~~securitization~~the ~~trusts~~Virginia ~~containing~~Retirement ~~residential mortgage loans~~System. The ~~total~~complaint ~~amount~~asserts ofclaims ~~certificates~~under ~~allegedly sponsored, underwritten and/or sold by~~ the ~~Company~~Virginia toFraud ~~plaintiff~~Against ~~was~~Taxpayers ~~approximately~~Act, ~~$694~~as ~~million.~~well ~~The~~as ~~complaint alleges causes of action against the Company for~~ common law ~~fraud,~~claims ~~fraudulent~~of actual ~~concealment, aiding~~ and ~~abetting~~constructive fraud, ~~negligent misrepresentation,~~ and ~~rescission~~ ~~and~~ seeks, among other things, ~~compensatory~~treble ~~and punitive~~ damages. Onand ~~June 10,~~civil ~~2014, the court denied the defendants’ motion to dismiss~~penalties. On August 4, 2014, claims regarding two certificates were dismissed by stipulation. After these dismissals, the remaining amount of certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $644 million. On September 12, 2014, the Company filed a notice of appeal from the denial of the motion to dismiss. On January 126, ~~2015~~2016, the ~~Company~~parties ~~filed~~reached an ~~amended~~agreement ~~answer~~ to ~~the~~settle ~~complaint. At September 25, 2015,~~ the ~~current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $277 million, and the certificates had incurred actual losses of approximately $81 million~~litigation. ~~Based~~An onorder ~~currently~~dismissing ~~available information,~~ the ~~Company believes it could incur a loss in this~~ action upwith toprejudice ~~the~~was ~~difference~~entered ~~between the $277 million unpaid balance~~on ~~of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company~~January 28, ~~or upon sale, plus pre- and post-judgment interest, fees and costs~~2016. ~~The Company may be entitled to be indemnified for some of these losses.~~

OnAdditional ~~May 17,~~lawsuits ~~2013,~~containing ~~the~~claims ~~plaintiff~~similar into ~~IKB~~those ~~International~~described ~~S.A.~~above inmay ~~Liquidation,~~be ~~et al. v. Morgan Stanley, et al.~~ filed ~~a complaint against the Company and certain affiliates~~ in the ~~Supreme Court of NY~~future. ~~The~~In ~~complaint alleges that defendants made material misrepresentations and omissions in~~ the ~~sale to plaintiff of certain mortgage pass-through certificates backed by~~course ~~securitization trusts containing residential mortgage loans. The total amount~~ of ~~certificates~~its ~~allegedly sponsored~~business, ~~underwritten and/or sold by the Company to plaintiff was approximately $132 million~~MS&Co. ~~The complaint alleges causes of action against the Company for common law fraud~~, ~~fraudulent~~as ~~concealment,~~a ~~aiding~~major ~~and~~futures ~~abetting~~commission ~~fraud~~merchant, ~~and~~is ~~negligent~~party ~~misrepresentation,~~to ~~and~~various ~~seeks,~~civil ~~among other things~~actions, ~~compensatory~~claims and ~~punitive~~routine ~~damages.~~regulatory Oninvestigations ~~October 29, 2014, the court granted in part~~ and ~~denied~~proceedings ~~in part~~that the ~~Company’s~~General ~~motion~~Partner tobelieves ~~dismiss.~~do ~~All~~not ~~claims~~have ~~regarding~~a ~~four~~material ~~certificates~~effect ~~were~~on ~~dismissed. After these dismissals,~~ the ~~remaining~~business ~~amount~~ of ~~certificates allegedly issued by the Company or sold to plaintiff by the Company was approximately $116~~ ~~million~~MS&Co. OnMS&Co. ~~August 26,~~may ~~2015,~~establish ~~the~~reserves ~~Company appealed~~ from ~~the~~time ~~portion of the Court’s decision denying the Company’s motion~~ to ~~dismiss.~~time ~~At September 25, 2015, the current unpaid balance of the mortgage pass-through certificates at issue~~ in ~~this~~connections ~~action~~with ~~was~~such ~~approximately $29 million, and the certificates had incurred actual losses of $58 million~~actions. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $29 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, or upon sale, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

On September 23, 2013, the plaintiff in National Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al. filed a complaint against the Company and certain affiliates in the United States District Court for the Southern District of New York (“SDNY”). The complaint alleges that defendants made untrue statements of material fact or omitted to state material facts in the sale to the plaintiff of certain mortgage pass-through certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company to plaintiffs was approximately $417 million. The complaint alleges causes of action against the Company for violations of Section 11 and Section 12(a)(2) of the Securities Act of 1933, as amended, violations of the Texas Securities Act, and violations of the Illinois Securities Law of 1953 and seeks, among other things, rescissory and compensatory damages. The defendants filed a motion to dismiss the complaint on November 13, 2013. On January 22, 2014 the court granted defendants’ motion to dismiss with respect to claims arising under the Securities Act of 1933, as amended and denied defendants’ motion to dismiss with respect to claims arising under Texas Securities Act and the Illinois Securities Law of 1953. On November 17, 2014, the plaintiff filed an amended complaint. On December 15, 2014, defendants answered the amended complaint. At September 25, 2015, the current unpaid balance of the mortgage pass-through certificates at issue in this action was approximately $194 million, and the certificates had incurred actual losses of $31 million. Based on currently available information, the Company believes it could incur a loss in this action up to the difference between the $194 million unpaid balance of these certificates (plus any losses incurred) and their fair market value at the time of a judgment against the Company, or upon sale, plus pre- and post-judgment interest, fees and costs. The Company may be entitled to be indemnified for some of these losses and to an offset for interest received by the plaintiff prior to a judgment.

- 35 -

~~Settled~~Item 1A. ~~Civil~~RISK ~~Litigation~~FACTORS

OnThere ~~August 25,~~have ~~2008,~~been ~~the~~no ~~Company~~material ~~and~~changes ~~two~~from ~~ratings agencies were named as defendants in a purported class action related to securities issued by a structured investment vehicle called Cheyne Finance PLC and Cheyne Finance LLC (together,~~ the ~~“Cheyne~~risk ~~SIV”).~~factors ~~The~~set ~~case~~forth ~~was~~under ~~styled~~Part ~~Abu Dhabi Commercial Bank~~I, etItem al1A. v.in ~~Morgan Stanley & Co. Inc., et al. The complaint alleged, among other things, that~~ the ~~ratings~~Partnership’s ~~assigned~~Report toon the securities issued by the Cheyne SIV were false and misleading, including because the ratings did not accurately reflect the risks associated with the subprime residential mortgage backed securities held by the Cheyne SIV. The plaintiffs asserted allegations of aiding and abetting fraud and negligent misrepresentation relating to approximately $852 million of securities issued by the Cheyne SIV. On AprilForm ~~24,~~10-K ~~2013,~~for the ~~parties reached~~fiscal anyear ~~agreement~~ended ~~to settle the case, and on April~~December 2631, ~~2013, the court dismissed the action with prejudice~~2015. ~~The settlement does not cover certain claims that were previously dismissed.~~

~~On July~~Item ~~9, 2010 and February 11, 2011, Cambridge Place Investment Management Inc~~2. ~~filed two separate complaints against the Company and/or its~~ ~~affiliates~~UNREGISTERED ~~and~~SALES ~~other~~OF ~~defendants~~SECURITIES ~~in the~~AND ~~Superior~~USE ~~Court~~OF ofPROCEEDS the Commonwealth of Massachusetts, both styled Cambridge Place Investment Management Inc. v. Morgan Stanley & Co., Inc., et al. The complaints asserted claims on behalf of certain clients of plaintiff’s affiliates and allege that defendants made untrue statements and material omissions in the sale of a number of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly issued by the Company and/or its affiliates or sold to plaintiff’s affiliates’ clients by the Company and/or its affiliates in the two matters was approximately $263 million. On February 11, 2014, the parties entered into an agreement to settle the litigation. On February 20, 2014, the court dismissed the action.

On October 25, 2010, the Company, certain affiliates and Pinnacle Performance Limited, a special purpose vehicle (“SPV”), were named as defendants in a purported class action related to securities issued by the SPV in Singapore, commonly referred to as “Pinnacle Notes.” The ~~case~~Partnership isno ~~styled~~longer Geoffers ~~Dandong, et al~~Units. v. Pinnacle Performance Ltd., et al. and was pending in the SDNY. On January 31, 2014, the plaintiffs filed a second amended complaint, which asserted common law claims of fraud, aiding and abetting fraud, fraudulent inducement, aiding and abetting fraudulent inducement, and breach of the implied covenant of good faith and fair dealing. On July 17, 2014, the parties reached an agreement to settle the litigation, which received final court approval on July 2, 2015.

On July 5, 2011, Allstate Insurance Company and certain of its affiliated entities filed a complaint against the Company in the Supreme Court of NY, styled Allstate Insurance Company, et al. v. Morgan Stanley, et al. An amended complaint was filed on September 9, 2011, and alleges that the defendants made untrue statements and material omissions in the sale to the plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The ~~total~~following ~~amount~~chart ofsets ~~certificates~~forth ~~allegedly issued and/or sold to~~ the plaintiffs by the Company was approximately $104 million. The complaint raised common law claims of fraud, fraudulent inducement, aiding and abetting fraud, and negligent misrepresentation and seeks, among other things, compensatory and/or recessionary damages associated with the plaintiffs’ purchases of ~~such~~ ~~certificates.~~Units Onby ~~March 15, 2013,~~ the ~~court denied in substantial part the defendants’ motion to dismiss the amended complaint, which order the Company appealed on April 11, 2013~~Partnership. ~~On May 3, 2013, the Company filed its answer to the amended complaint. On January 16, 2015, the parties reached an agreement to settle the litigation.~~

On July 18, 2011, the Western and Southern Life Insurance Company and certain affiliated companies filed a complaint against the Company and other defendants in the Court of Common Pleas in Ohio, styled Western and Southern Life Insurance Company, et al. v. Morgan Stanley Mortgage Capital Inc., et al. An amended complaint was filed on April 2, 2012 and alleges that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of the certificates allegedly sold to plaintiffs by the Company was approximately $153 million. On June 8, 2015, the parties reached an agreement to settle the litigation.

(d) Maximum Number

(c) Total Number

(or Approximate

of Units

Dollar Value) of

Purchased as Part

Units that May

(b) Average

of Publicly

Yet Be Purchased

(a) Total Number

Price Paid per

Announced

Under the

Period

of Units Purchased*

Unit**

Plans or Programs

January 1, 2016 - January 31, 2016

7,172.410

12.39

N/A

February 1, 2016 - February 29, 2016

9,008.988

12.51

N/A

March 1, 2016 - March 31, 2016

36,647.907

12.03

N/A

52,829.305

12.16

On* ~~September 2~~Generally, ~~2011,~~limited ~~the~~partners ~~Federal~~are ~~Housing~~permitted ~~Finance~~to ~~Agency,~~redeem astheir ~~conservator~~Units ~~for~~as ~~Fannie~~of ~~Mae and~~the ~~Freddie~~end ~~Mac,~~of ~~filed~~each 17month ~~complaints against~~on ~~numerous~~three ~~financial~~business ~~services~~days’ ~~companies,~~notice ~~including~~to the ~~Company~~General ~~and certain affiliates~~Partner. AUnder ~~complaint~~certain ~~against~~circumstances, the ~~Company~~General ~~and~~Partner ~~certain~~can ~~affiliates~~compel ~~and~~redemption, ~~other~~although ~~defendants~~to ~~was~~date, ~~filed in~~ the ~~Supreme~~General ~~Court~~Partner ofhas ~~NY,~~not ~~styled~~exercised ~~Federal~~this ~~Housing~~right. ~~Finance~~Purchases ~~Agency, as~~of ~~Conservator~~Units v.by ~~Morgan~~the ~~Stanley~~Partnership etreflected ~~al.~~in ~~The~~the ~~complaint~~chart ~~alleges~~above ~~that~~were ~~defendants~~ made ~~untrue statements and material omissions~~ in ~~connection with~~ the ~~sale~~ordinary tocourse ~~Fannie Mae and Freddie Mac~~ of ~~residential~~ mortgage pass-through certificates with an original unpaid balance of approximately $11 billion. The complaint raised claims under federal and state securities laws and common law and seeks, among other things, rescission and compensatory and punitive damages. On February 7, 2014, the ~~parties~~Partnership’s ~~entered~~business ~~into~~in anconnection ~~agreement~~with toeffecting ~~settle~~redemptions ~~the~~for ~~litigation.~~limited ~~On February 20, 2014, the court dismissed the action~~partners.

**	Redemptions of Units are affected as of the last day of each month at the net asset value per Unit as of that day.

Item 4. Mine Safety Disclosures — Not Applicable

- 36 -

~~On April~~Item 25, 2012, Metropolitan Life Insurance Company and certain affiliates filed a complaint against the Company and certain affiliates in the Supreme Court of NY, styled Metropolitan Life Insurance Company, et al6. EXHIBITS v. Morgan Stanley, et al. An amended complaint was filed on June 29, 2012, and alleges that the defendants made untrue statements and material omissions in the sale to the plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten, and/or sold by the Company was approximately $758 million. The amended complaint raised common law claims of fraud, fraudulent inducement, and aiding and abetting fraud and seeks, among other things, rescission, compensatory, and/or rescissionary damages, as well as punitive damages, associated with the plaintiffs’ purchases of such certificates. On April 11, 2014, the parties entered into a settlement agreement.

In re Morgan Stanley Mortgage Pass-Through Certificates Litigation, which had been pending in the SDNY, was a putative class action involving allegations that, among other things, the registration statements and offering documents related to the offerings of certain mortgage pass-through certificates in 2006 and 2007 contained false and misleading information concerning the pools of residential loans that backed these securitizations. On December 18, 2014, the parties’ agreement to settle the litigation received final court approval, and on December 19, 2014, the court entered an order dismissing the action.



31.01		Certification of President and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Chief Financial Officer and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01		Certification of President and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02		Certification of Chief Financial Officer and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Document

101.PRE*		XBRL Taxonomy Extension Presentation Document

101.DEF*		XBRL Taxonomy Extension Definition Document

On November 4, 2011, the Federal Deposit Insurance Corporation, as receiver for Franklin Bank S.S.B, filed two complaints against the Company in the District Court of the State of Texas. Each was styled Federal Deposit Insurance Corporation as Receiver for Franklin Bank, S.S.B v. Morgan Stanley & Company LLC F/K/A Morgan Stanley & Co. Inc. and alleged that the Company made untrue statements and material omissions in connection with the sale to plaintiff of mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The amount of certificates allegedly underwritten and sold to plaintiff by the Company in these cases was approximately $67 million and $35 million, respectively. On July 2, 2015, the parties reached an agreement to settle the litigation.

On February 14, 2013, Bank Hapoalim B.M. filed a complaint against the Company and certain affiliates in the Supreme Court of NY, styled Bank Hapoalim B.M. v. Morgan Stanley et al. The complaint alleges that defendants made material misrepresentations and omissions in the sale to plaintiff of certain mortgage pass-through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold by the Company to plaintiff was approximately $141 million. On July 28, 2015, the parties reached an agreement to settle the litigation, and on August 12, 2015, the plaintiff filed a stipulation of discontinuance with prejudice.

Additional lawsuits containing claims similar to those described above may be filed in the future. In the course of its business, MS&Co., as a major futures commission merchant, is party to various civil actions, claims and routine regulatory investigations and proceedings that the General Partner believes do not have a material effect on the business of MS&Co. MS&Co. may establish reserves from time to time in connections with such actions.

- 37 -

Item 1A. RISK FACTORS

There have been no material changes from the risk factors previously referenced in the Partnership’s Report on Form 10-K, as updated by the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 6.		EXHIBITS
31.01		Certification of President and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02		Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01		Certification of President and Director of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02		Certification of Chief Financial Officer of Ceres Managed Futures LLC, the General Partner of the Partnership, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Document
101.PRE*		XBRL Taxonomy Extension Presentation Document
101.DEF*		XBRL Taxonomy Extension Definition Document

Notes to Exhibits List

* Submitted electronically herewith.

-37 ~~38 -~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Morgan Stanley Smith Barney Charter Campbell L.P.
	(Registrant)
	By:	Ceres Managed Futures LLC
		(General Partner)
November 12, 2015	By:	/s/ Steven Ross
May 12, 2016	By:	/s/ Steven Ross
		Steven Ross
		Chief Financial Officer
		Chief Financial Officer and Director
	By:	/s/ Patrick T. Egan
		Patrick T. Egan
		President and Director

The General Partner which signed the above is the only party authorized to act for the registrant. The registrant has no principal executive officer, principal financial officer, controller, or principal accounting officer and has no Board of Directors.

- 3938 -

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · MORGAN STANLEY SMITH BARNEY CHARTER CAMPBELL LP