ETF News

UPDATE 1-State St wins more Morgan Stanley business

* No terms disclosed

* About 100 workers affected (Adds number of employees moved)

BOSTON, Nov 30 (Reuters) - State Street Corp STT.N, one of the largest custodians of managed assets, said it was expanding its relationship with Morgan Stanley MS.N to cover trading-related services.

Boston-based State Street, which has seen its revenue decline over the past year, is trying to win more business by expanding from simply being a custodian of assets into more complicated areas of money management services such as settling trading orders and reporting on portfolio characteristics.

State Street already provided administrative and custody services to Morgan Stanley’s money management unit. State Street declined to disclose financial terms of the new deal.

About 100 Morgan Stanley employees worldwide will switch over to State Street as part of the outsourcing arrangement.

The deal covers $300 billion of Morgan Stanley’s $386 billion under management and excludes merchant banking, hedge funds and other non-traditional areas, a spokeswoman for Morgan Stanley said.

The amount covered by the deal will shrink next year when Morgan Stanley completes the sale of its retail and mutual fund management business to Invesco IVZ.N. That deal, covering about $119 billion, is expected to close by the middle of 2010, the spokeswoman said.

State Street has been hit by the global decline in world stock markets as well as problems in some of the bond funds it managed. The company’s revenue declined 21 percent to $6.4 billion in the first nine months of the year from the same period in 2008.

State Street administered $17.9 trillion of assets and managed $1.7 trillion as of Sept. 30. (Reporting by Aaron Pressman; Editing by Steve Orlofsky, Leslie Gevirtz) ((; +1-617-942-1752;