Morgan Stanley Tax Exempt Securities Trust N-CSR Certified annual shareholder report (management investment company)

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-02979

                   Morgan Stanley Tax-Exempt Securities Trust
               (Exact name of registrant as specified in charter)

1221 Avenue of the Americas, New York, New York                  10020
    (Address of principal executive offices)                   (Zip code)

                                Ronald E. Robison
              1221 Avenue of the Americas, New York, New York 10020
                     (Name and address of agent for service)



Registrant's telephone number, including area code: 212-762-4000

Date of fiscal year end: December 31, 2004

Date of reporting period: December 31, 2004


Item 1 - Report to Shareholders

Welcome, Shareholder:

In this report, you'll learn about how your investment in Morgan Stanley Tax-Exempt Securities Trust performed during the annual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund's financial statements and a list of Fund investments.

This material must be preceded or accompanied by a prospectus for the fund being offered. Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund.

	Fund Report
	For the year ended December 31, 2004

Total Return for the 12-Month Period Ended December 31, 2004

Class A						Class B						Class C						Class D						Lehman Brothers Municipal Bond Index1						Lipper General Municipal Debt Funds Index2
3.82%							3.34	%					3.24	%					4.05	%					4.48	%					4.14	%

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit morganstanley.com or speak with your Financial Advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost.

The performance of the Fund's four share classes varies because each has different expenses. The Fund's total return figures assume the reinvestment of all distributions, but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance information.

Market Conditions

Growth in consumer spending and business investment helped the U.S. economy expand at a solid pace in 2004. Even with this positive backdrop, however, fixed income markets were confronted with contradictory economic data. At the beginning of the year, weak employment growth and the possibility of deflation kept interest rates at historically low levels. Market sentiment changed in April, when the release of the March employment report was significantly higher than expected and included upward revisions of previous periods. The bond market also began to focus on the rapid climb in oil prices. These new signals led investors to conclude that the Federal Open Market Committee (the "Fed") would begin to raise rates sooner than had been anticipated.

Beginning in June, the Fed raised short-term interest rates five times over the remainder of the year. This brought the overnight federal funds rate to 2.25 percent, and reversed a portion of the Fed's 13 rate reductions that occurred between January 2001 and June 2003. Despite these actions, a series of soft economic indicators caused yields on intermediate and longer maturity bonds to move lower in the second half.

Against this setting, intermediate and long-term municipal bond yields peaked in June but subsequently trended lower before ending the year with little overall change. In contrast, yields on shorter bonds rose steadily in the second half of the period when the Fed began tightening.

Municipal underwriting volume of $359 billion in 2004 finished 7 percent below last year's record level. California continued to lead all states with $55 billion in issuance. New York ranked second in issuance with $38 billion. Relative to U.S. Treasuries, municipal bonds outperformed early in the year but then gave ground. The municipal-to-Treasury yield ratio, which gauges relative performance, remained attractive for municipals. As a result, fixed income investors such as insurance companies and hedge funds that normally focus on taxable sectors supported municipals by "crossing over" to purchase bonds.

2

Performance Analysis

Morgan Stanley Tax-Exempt Securities Trust underperformed both the Lehman Brothers Municipal Bond Index and the Lipper General Municipal Debt Funds Index for the year. The Fund's performance in 2004 was primarily driven by its duration* target and quality composition. The Fund's duration during the year was gradually reduced relative to its benchmark in anticipation of rising interest rates. This reduced the Fund's exposure to securities with longer maturities, which were among the best performers in the index.

The Fund also maintained its traditional high quality profile, with more than 85 percent of the bonds in the portfolio rated AA or higher. During the period, the yield spread between higher and lower quality bonds tightened and lower quality municipal bonds generally outperformed. The Fund remained well diversified, with 159 individual credits in 17 municipal sectors located in 35 different states, the District of Columbia and Puerto Rico.

* A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years. Each year of duration represents an expected 1 percent change in the price of a bond for every 1 percent change in interest rates. The longer a bond's duration, the greater the effect of interest-rate movements on its price. Typically, funds with shorter durations perform better in rising-interest-rate environments, while funds with longer durations perform better when rates decline.

There is no guarantee that any securities mentioned will continue to perform well or be held by the Fund in the future.

TOP FIVE SECTORS
Transportation					18.4	%
Electric					13.2
Water & Sewer					12.6
General Obligation					12.5
Refunded					11.0

LONG-TERM CREDIT ANALYSIS
Aaa/AAA					72.1	%
Aa/AA					13.7
A/A					5.8
Baa/BBB					6.2
Ba/BB					0.7
NR					1.5

Data as of December 31, 2004. Subject to change daily. All percentages for top five sectors are as a percentage of net assets. All percentages for long-term credit analysis are as a percentage of total long-term investments. Provided for informational purposes only and should not be deemed a recommendation to buy or sell the securities mentioned. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.

3

Investment Strategy

The Fund will normally invest at least 80 percent of its assets in securities that pay interest exempt from federal income taxes. This policy is fundamental and may not be changed without shareholder approval. The Fund's "Investment Manager," Morgan Stanley Investment Advisors Inc., generally invests the Fund's assets in municipal obligations. Municipal obligations are bonds, notes or short-term commercial paper issued by state governments, local governments, and/or their respective agencies.

For More Information About Portfolio Holdings

Each Morgan Stanley fund provides a complete schedule of portfolio holdings in its semiannual and annual reports within 60 days of the end of the fund's second and fourth fiscal quarters by filing the schedule electronically with the Securities and Exchange Commission (SEC). The semiannual reports are filed on Form N-CSRS and the annual reports are filed on Form N-CSR. Morgan Stanley also delivers the semiannual and annual reports to fund shareholders and makes these reports available on its public Web site, www.morganstanley.com. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to shareholders, nor are the reports posted to the Morgan Stanley public Web site. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the

SEC's Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the Public Reference section of the SEC, Washington, DC 20549-0102. You may obtain copies of a fund's fiscal quarter filings by contacting Morgan Stanley Client Relations at (800) 869-NEWS.

Householding Notice

To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 350-6414, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.

4

	Distribution by Maturity
	(% of Long-Term Portfolio) As of December 31, 2004

Weighted Average Maturity: 14 Years

Portfolio structure is subject to change.

Geographic Summary of Investments
Based on Market Value as a Percent of Net Assets

Alabama					0.5	%
Alaska					4.8
Arizona					3.3
Arkansas					0.2
California					5.3
Colorado					3.1
Connecticut					2.9
District of Columbia					0.8
Florida					1.9
Georgia					3.4
Hawaii					1.8	%
Idaho					0.1
Illinois					5.0
Indiana					2.8
Kansas					0.5
Kentucky					3.8
Maryland					1.1
Massachusetts					3.7
Michigan					1.6
Missouri					1.6
Nevada					2.0	%
New Hampshire					0.1
New Jersey					6.3
New Mexico					0.8
New York					9.9
North Carolina					2.7
Ohio					3.7
Pennsylvania					1.9
Puerto Rico					1.5
South Carolina					4.1
Tennessee					2.1	%
Texas					9.4
Utah					1.7
Virginia					1.6
Washington					3.1
West Virginia					0.3
Wisconsin					0.8
Joint exemptions*					(1.4	)
Total					98.8	%

*    Joint exemptions have been included in each geographic location.

5

	Call and Cost (Book) Yield Structure
	(Based on Long-Term Portfolio) As of December 31, 2004

Years Bonds Callable — Weighted Average Call Protection: 6 Years

Cost (Book) Yield^(b) — Weighted Average Book Yield: 5.6%

(a) May include issues callable in previous years.

(b) Cost or "book" yield is the annual income earned on a portfolio investment based on its original purchase price before the Fund's operating expenses. For example, the Fund is earning a book yield of 7.0% on 12% of the long-term portfolio that is callable in 2005.

Portfolio structure is subject to change.

6

(This page has been left blank intentionally.)

7

	Performance Summary

Performance of a $10,000 Investment — Class A and D

8

Average Annual Total Returns — Period Ended December 31, 2004

						Class A Shares* (since 03/27/80)						Class B Shares** (since 07/28/97)						Class C Shares† (since 07/28/97)						Class D Shares†† (since 03/27/80)
Symbol						TAXAX						TAXBX						TAXCX						TAXDX
1 Year							3.82 %	3					3.34 %	3					3.24%	3					4.05%	3
							(0.59)	4					(1.60)	4					2.25	4					—
5 Years							6.69	3					6.23	3					6.13	3					6.90	3
							5.77	4					5.91	4					6.13	4					—
10 Years							6.44	3					—						—						6.66	3
							5.98	4					—						—						—
Since Inception							8.15	3					4.93	3					4.79	3					8.40	3
							7.96	4					4.93	4					4.79	4					—

Performance data quoted represents past performance, which is no guarantee of future results and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit morganstanley.com or speak with your financial advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class B, Class C, and Class D shares will vary due to differences in sales charges and expenses.

Prior to July 28, 1997 the Fund offered only one class of shares. Because the distribution arrangement for Class A most closely resembled the distribution arrangement applicable prior to the implementation of multiple classes (i.e., Class A is sold with a front-end sales charge), historical performance information has been restated to reflect the actual maximum sales charge applicable to Class A (i.e., 4.25%) as compared to the 4.00% sales charge in effect prior to July 28, 1997. In addition, Class A shares are now subject to an ongoing 12b-1 fee which is reflected in the restated performance for that class.

Because all shares of the fund held prior to July 28, 1997 were designated Class D shares, the Fund's historical performance has been restated to reflect the absence of any sales charge.

* The maximum front-end sales charge for Class A is 4.25%.

** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years.

† The maximum contingent deferred sales charge for Class C is 1% for shares redeemed within one year of purchase.

†† Class D has no sales charge.

(1) The Lehman Brothers Municipal Bond Index tracks the performance of municipal bonds rated at least Baa or BBB by Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively and with maturities of 2 years or greater. Indexes are unmanaged and their returns do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly in an index.

(2) The Lipper General Municipal Debt Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper General Municipal Debt Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

(3) Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges.

(4) Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund's current prospectus for complete details on fees and sales charges.

‡ Ending value assuming a complete redemption on December 31, 2004.

9

	Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period 07/01/04 – 12/31/04.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing cost of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) and redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs, and will not help you determine the relative total cost of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

				BEGINNING ACCOUNT VALUE				ENDING ACCOUNT VALUE				EXPENSES PAID DURING PERIOD *
				07/01/04				12/31/04				07/01/04 – 12/31/04
Class A
Actual (4.84% return)				$	1,000.00			$	1,048.40			$	3.96
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,021.27			$	3.91
Class B
Actual (4.64% return)				$	1,000.00			$	1,046.40			$	5.76
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,019.51			$	5.69
Class C
Actual (4.60% return)				$	1,000.00			$	1,046.00			$	6.27
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,019.00			$	6.19
Class D
Actual (4.97% return)				$	1,000.00			$	1,049.70			$	2.68
Hypothetical (5% annual return before expenses)				$	1,000.00			$	1,022.52			$	2.64

* Expenses are equal to the Fund's annualized expense ratio of 0.77%, 1.12%, 1.22% and 0.52% respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

10

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
				Tax-Exempt Municipal Bonds (95.3%)
				General Obligation (12.5%)
				North Slope Borough, Alaska,
$	15,000			Ser 1995 A (MBIA)					0.00	%			06/30/06			$	14,481,300
	3,000			Ser 2000 B (MBIA)					0.00				06/30/09				2,606,520
	9,500			Ser 1999 A (MBIA)					0.00				06/30/10				7,866,950
	25,000			Ser 2000 B (MBIA)					0.00				06/30/11				19,710,500
	5,000			California, Various Purpose dtd 04/01/02					6.00				04/01/19				5,972,250
	2,000			Los Angeles Unified School District, California, 1997 Ser B (FGIC)					5.00				07/01/23				2,107,940
				Connecticut,
	4,000			College Savings 1989 Ser A					0.00				07/01/08				3,655,480
	5,000			Refg 2002 Ser E Ser PA 1056 B RITES (FSA)					8.411	‡			11/15/11				6,453,550
	15,000			Refg 2002 Ser E Ser PA 1056 A RITES (FSA)					8.411	‡			11/15/13				19,142,550
				Chicago, Illinois,
	5,000			Refg Ser 1995 A-2 (Ambac)					6.25				01/01/14				5,991,750
	2,000			Refg 2001 A (MBIA)					0.00	#			01/01/17				1,651,120
	10,300			Neighborhoods Alive 21 (FGIC)					5.375				01/01/26				11,103,503
				Chicago Board of Education, Illinois,
	1,000			Ser 2001 C (FSA)					5.50				12/01/18				1,123,720
	3,000			Ser 2001 C (FSA)					5.00				12/01/26				3,092,700
	4,280			Chicago Park District, Illinois, Ser 2004 A (Ambac)					5.00				01/01/26				4,452,356
	3,000			Clark County, Nevada, Transportation Ser 1992 A (Ambac)					6.50				06/01/17				3,739,920
	2,000			New York City, New York 2005 Ser G					5.00				12/01/25				2,060,640
	5,000			New York State, Refg Ser 1995 B					5.70				08/15/10				5,156,750
	10,000			North Carolina, Public School Building Ser 1999					4.60				04/01/17				10,475,100
	10,000			South-Western City School District, Ohio, Ser 1999 (Ambac)					4.75				12/01/19				10,469,200
				Pennsylvania,
	5,000			RITES PA – 1112 A (MBIA)					7.399	‡			01/01/18				5,760,400
	5,000			RITES PA – 1112 B (MBIA)					7.399	‡			01/01/19				6,145,850
				Shelby County, Tennessee,
	5,000			Refg 1995 Ser A					5.625				04/01/11				5,093,150
	1,000			Refg 1995 Ser A					5.625				04/01/12				1,018,630
	4,000			Refg 1995 Ser A					5.625				04/01/14				4,074,520
	159,080																163,406,349
				Educational Facilities Revenue (2.9%)
	4,000			California Public Works Board, University of California 1993 Refg Ser A					5.50				06/01/21				4,035,240
	1,000			University of Idaho, Student Fee Ser H (FGIC)					5.25				04/01/31				1,055,500

See Notes to Financial Statements

11

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	1,000			Purdue University, Indiana, Student Fee Ser Q					5.75	%			07/01/15			$	1,122,040
	2,000			Maryland Health & Educational Facilities Authority, The Johns Hopkins University Refg Ser 1998					5.125				07/01/20				2,150,280
	400			Massachusetts Industrial Finance Agency, College of the Holy Cross 1996 Issue (MBIA)					5.50				03/01/16				422,028
				New York State Dormitory Authority,
	5,000			City University Ser 2000 A (Ambac)					6.125				07/01/13				5,776,950
	2,000			State University 1990 Ser					7.50				05/15/13				2,557,380
	5,000			State University 1993 Ser					5.25				05/15/15				5,559,800
	2,500			Ohio State University, General Receipts Ser 1999 A					5.80				12/01/29				2,786,800
	4,000			Delaware County Authority, Pennsylvania, Villanova University Ser 1995 (Ambac)					5.70				08/01/15				4,158,000
	3,500			University of Texas, Ser 2004 D					5.00				08/15/25				3,672,935
				University of West Virginia,
	2,000			Ser C 2004 (FGIC)					5.00				10/01/27				2,080,500
	2,000			Ser C 2004 (FGIC)					5.00				10/01/28				2,072,500
	34,400																37,449,953
				Electric Revenue (13.2%)
				Salt River Project Agricultural Improvement & Power District, Arizona,
	25,000			Refg 1993 Ser C (Secondary MBIA)					5.50				01/01/10				28,060,750
	2,500			Refg 2002 Ser A					5.25				01/01/19				2,734,550
	9,000			Southern California Public Power Authority, Mead-Adelanto 1994 A (Ambac)					8.52	‡			07/01/15				11,079,630
	15,000			Colorado Springs, Colorado, Utilities Refg Ser 2002 (Ambac)					5.375				11/15/20				16,642,200
	9,550			Municipal Electric Authority of Georgia, Ser Y (Secondary MBIA)					6.50				01/01/17				11,623,114
	4,000			Indiana Municipal Power Agency, Power Supply 2004 Ser A (FGIC)					5.00				01/01/32				4,102,920
	3,050			Wyandotte County/Kansas City, Kansas, Utility Ser 2004 B (FSA)					5.00				09/01/27				3,181,669
	5,000			Long Island Power Authority, New York, Ser 2000 A (FSA)					0.00				06/01/17				2,996,950
				North Carolina Municipal Power Agency,
	5,000			Catawba Ser 1998 A (MBIA)					5.50				01/01/15				5,708,400
	4,000			Catawba Ser 2003 A (MBIA)					5.25				01/01/19				4,384,760
	15,000			Puerto Rico Electric Power Authority, Power Ser O					0.00				07/01/17				9,053,850
				South Carolina Public Service Authority,
	10,000			1996 Refg Ser A (MBIA)					5.75				01/01/13				10,533,100
	5,000			Refg Ser 2002 D (FSA)					5.00				01/01/21				5,302,550
	10,000			Memphis, Tennessee, Ser 2003 A (MBIA)					5.00				12/01/17				10,794,100
	10,500			San Antonio, Texas, Electric & Gas Refg Ser 1994 C INFLOS					7.52	‡			02/01/06				11,057,445
	15,000			Intermountain Power Agency, Utah, Refg 1997 Ser B (MBIA)					5.75				07/01/19				16,389,000

See Notes to Financial Statements

12

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	3,000			Chelan County Public Utility District #1, Washington, Hydro Ser 1997 A (AMT)					5.60	%			07/01/32			$	3,120,690
	5,000			Grant County Public Utility District #2, Washington, Refg Ser 2001 H (FSA)					5.375				01/01/18				5,490,350
	7,330			Seattle Municipal Light & Power, Washington, Impr & Refg Ser 2001 (FSA)					5.50				03/01/18				8,119,294
	3,000			Washington Public Power Supply System, Project #2 Refg Ser 1994 A (FGIC)					0.00				07/01/09				2,604,090
	165,930																172,979,412
				Hospital Revenue (6.9%)
	2,220			Birmingham-Carraway Special Care Facilities Financing Authority, Alabama, Carraway Methodist Health Ser 1995 A (Connie Lee)					5.875				08/15/15				2,304,871
	2,000			University of Arkansas, UAMS Campus Ser 2004 B (MBIA)					5.00				11/01/34				2,058,600
	5,000			Illinois Health Facilities Authority, Loyola University Health Ser 2001 A					6.00				07/01/21				5,244,900
	6,000			Maryland State Health & Higher Educational Facilities Authority, Medstar Health Refg Ser 2004					5.50				08/15/33				6,173,460
	10,000			Missouri Health & Educational Facilities Authority, Barnes-Jewish/ Christian Health Ser 1993 A					5.25				05/15/14				11,053,300
	3,000			University of Missouri, Health Ser 1996 A (Ambac)					5.50				11/01/16				3,209,820
				Henderson, Nevada,
	10,065			Catholic Health West 1998 Ser A					5.375				07/01/26				10,217,988
	2,000			Catholic Health West 1998 Ser A					5.125				07/01/28				2,000,940
				New Jersey Health Care Facilities Financing Authority,
	9,000			Robert Wood Johnson University Hospital Ser 2000					5.75				07/01/25				9,731,520
	2,000			St Barnabas Health Refg Ser 1998 B (MBIA)					5.25				07/01/18				2,166,020
	10,000			New York State Dormitory Authority, Memorial Sloan-Kettering Cancer Center 2003 Ser I					5.00				07/01/34				10,207,500
	3,000			Erie County Hospital Facility, Ohio, Firelands Regional Medical Center Ser 2002					5.625				08/15/32				3,114,720
	5,000			Lorain County, Ohio, Catholic Health Ser 9 2001 A					5.25				10/01/33				5,092,650
	5,000			Lehigh County General Purpose Authority, Pennsylvania, St Luke's of Bethlehem Hospital Ser A 2003					5.375				08/15/33				5,091,150
	2,350			Pennsylvania Higher Educational Facilities Authority, University of Pennsylvania Ser A 1996					5.75				01/01/22				2,445,034
	4,500			South Carolina Jobs Economic Development Authority, Palmetto Health Alliance Refg Ser 2003 C					6.875				08/01/27				5,027,175
	5,000			North Central Texas Health Facilities Development Corporation, University Medical Center Inc Ser 1997 (FSA)					5.45				04/01/15				5,251,750
	86,135																90,391,398

See Notes to Financial Statements

13

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
				Industrial Development/Pollution Control Revenue (3.9%)
$	1,600			Hawaii Department of Budget & Finance, Hawaii Electric Co Ser 1995 A (AMT) (MBIA)					6.60	%			01/01/25			$	1,621,712
				Michigan Strategic Fund,
	10,000			Detroit Edison Co Ser 1999 B (AMT)					5.65				09/01/29				10,392,000
	1,000			Ford Motor Co Refg Ser 1991 A					7.10				02/01/06				1,044,980
				New Jersey Economic Development Authority,
	6,000			Continental Airlines Inc Ser 1999 (AMT)					6.625				09/15/12				5,573,520
	4,000			Continental Airlines Inc Ser 1999 (AMT)					6.25				09/15/19				3,409,680
	2,500			Ohio Water Development Authority, Dayton Power & Light Co Collateralized Refg 1992 Ser A					6.40				08/15/27				2,562,375
	5,000			Brazos River Authority, Texas, TXU Electric Co Ser 1999 C (AMT)					7.70				03/01/32				5,953,050
	10,000			Sabine River Authority, Texas, TXU Electric Co Refg Ser 2001 B (AMT) (Mandatory Tender 11/01/11)					5.75				05/01/30				11,005,300
	10,000			Weston, Wisconsin, Wisconsin Public Service Co Refg Ser 1993 A					6.90				02/01/13				10,235,300
	50,100																51,797,917
				Mortgage Revenue – Multi-Family (1.1%)
	7,000			New Jersey Housing Agency, 1995 Ser A (Ambac)					6.00				11/01/14				7,180,950
				New York City Housing Developement Corporation, New York,
	3,674			Ruppert Project – FHA Ins Sec 223F					6.50				11/15/18				3,863,831
	3,518			Stevenson Commons Project – FHA Ins Sec 223F					6.50				05/15/18				3,699,335
	14,192																14,744,116
				Mortgage Revenue – Single Family (2.4%)
				Alaska Housing Finance Corporation,
	15,000			1997 Ser A (MBIA)					6.00				06/01/27				15,651,901
	2,000			Governmental 1995 Ser A (MBIA)					5.875				12/01/24				2,076,620
	2,440			California Housing Finance Agency, Home 1983 Ser B					0.00				08/01/15				1,012,600
				Colorado Housing & Finance Authority,
	220			1997 Ser B-2 (AMT)					7.00				05/01/26				223,095
	495			1998 Ser A-2 (AMT)					6.60				05/01/28				508,187
	360			1997 Ser C-2 (AMT)					6.875				11/01/28				364,475
	3,190			Hawaii Housing Finance & Development Corporation, Purchase 1997 Ser A (AMT)					5.75				07/01/30				3,211,309
	5			Idaho Housing Agency, Ser 1988 D-2 (AMT)					8.25				01/01/20				5,125
				Chicago, Illinois,
	100			GNMA-Backed Ser 1997 A (AMT)					7.25				09/01/28				100,744
	190			GNMA-Backed Ser 1997 B (AMT)					6.95				09/01/28				191,319
	40			Massachusetts Housing Finance Agency, Housing Ser 21 (AMT)					7.125				06/01/25				40,042

See Notes to Financial Statements

14

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	155			Minnesota Housing Finance Agency, Ser 1992 H (AMT)					6.50	%			01/01/26			$	155,818
				Missouri Housing Development Commission,
	470			Homeownership 1996 Ser C (AMT)					7.45				09/01/27				473,497
	235			Homeownership 1997 Ser A-2 ( AMT)					7.30				03/01/28				236,485
	820			Homeownership 1997 Ser C-1					6.55				09/01/28				827,511
	125			Homeownership 1998 Ser B-2 (AMT)					6.40				03/01/29				125,783
	425			Homeownership Ser 2000 B-1 (AMT)					7.45				09/01/31				428,098
	1,080			New Hampshire Housing Finance Authority, Mortgage Acquisition 2000 Ser B (AMT)					6.70				07/01/29				1,097,647
	5,235			Ohio Housing Finance Agency, Residential 1996 Ser B-2 (AMT)					6.10				09/01/28				5,327,502
	32,585																32,057,758
				Nursing & Health Related Facilities Revenue (0.2%)
	200			Marion, Iowa, AHF/Kentucky-Iowa Inc Ser 2003					6.50#	#			01/01/29				198,798
	405			Kentucky Economic Development Financing Authority, AHF/Kentucky-Iowa Inc Ser 2003					6.50#	#			01/01/29				402,566
	1,710			Chester County Industrial Development Authority, Pennsylvania, RHA/PA Nursing Home Inc Ser 1989					8.50				05/01/32				1,727,322
	2,315																2,328,686
				Public Facilities Revenue (2.8%)
	3,710			Jefferson County, Alabama, School Ser 2004-A					5.25				01/01/23				3,884,704
	9,000			Arizona School Facilities Board, School Ser 2001					5.50				07/01/18				10,099,530
	2,000			North City West School Facilities Authority, California, Community Dist #1 Special Tax Ser 1995 B (FSA)					6.00				09/01/19				2,157,440
	2,500			Jacksonville, Florida, Sales Tax Ser 2001 (Ambac)					5.50				10/01/17				2,809,325
	3,495			Illinois, Civic Center Dedicated Tax Ser 1991 (Ambac)					6.25				12/15/20				4,282,808
	4,000			Michigan, 525 Redevco Inc COPs (Ambac)					5.50				06/01/27				4,340,120
	3,000			Albuquerque, New Mexico, Gross Receipts Lodgers' Tax Refg Ser 2004 (FSA)					5.00				07/01/37				3,062,550
	5,000			Ohio Building Authority, 2001 Ser A (FSA)					5.50				10/01/18				5,609,050
	500			Laredo ISD Public Facility Corporation, Texas, 2004 Ser A (Ambac)					5.00				08/01/29				507,965
	33,205																36,753,492
				Recreational Facilities Revenue (2.4%)
				Metropolitan Football Stadium District, Colorado,
	4,000			Sales Tax Ser 1999 A (MBIA)					0.00				01/01/10				3,386,120
	1,650			Sales Tax Ser 1999 A (MBIA)					0.00				01/01/11				1,331,072
	9,000			Mashantucket (Western) Pequot Tribe, Connecticut, Special 1997 Ser B (a)					5.75				09/01/27				9,275,310

See Notes to Financial Statements

15

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	20,000			Metropolitan Pier & Exposition Authority, Illinois, Refg Ser 2002 B (MBIA)					0.00#	##%			06/15/22			$	11,804,000
	5,000			Hamilton County, Ohio, Sales Tax Ser 2000 (Ambac)					5.25				12/01/32				5,269,950
	39,650																31,066,452
				Resource Recovery Revenue (0.4%)
	5,000			Northeast Maryland Waste Disposal Authority, Montgomery County Ser 2003 (AMT) (Ambac)					5.50				04/01/16				5,479,950
				Retirement & Life Care Facilities Revenue (0.5%)
				Riverside County Public Financing Authority, California,
	2,000			Air Force Village West Inc COPs					5.75				05/15/19				2,105,220
	3,900			Air Force Village West Inc COPs					5.80				05/15/29				4,042,857
	5,900																6,148,077
				Tax Allocation Revenue (0.4%)
	5,000			Rosemead Redevelopment Agency, California, Project #1 Ser 1993 A					5.60				10/01/33				5,024,650
				Transportation Facilities Revenue (18.4%)
	5,000			California Infrastructure & Economic Development Bank, Bay Area Toll Bridges Seismic Retrofit First Lien Ser 2003 A (Ambac)					5.00				07/01/36				5,138,700
	5,000			San Francisco Bay Area Rapid Transit District, California, Sales Tax Ser 1998 (Ambac)					4.75				07/01/23				5,103,050
				E-470 Public Highway Authority, Colorado,
	15,000			Ser 1997 B (MBIA)					0.00				09/01/14				10,026,300
	5,000			Ser 1997 B (MBIA)					0.00				09/01/16				2,998,900
	10,000			Metropolitan Washington Airport Authority, District of Columbia & Virginia, Ser 2001A (AMT) (MBIA)††					5.50				10/01/27				10,481,400
	8,500			Jacksonville, Florida, Transportation Ser 2001 (MBIA)					5.00				10/01/26				8,771,915
	7,980			Mid-Bay Bridge Authority, Florida, Sr Lien Crossover Refg Ser 1993 A (Ambac)					5.85				10/01/13				8,832,184
				Atlanta, Georgia,
	5,000			Airport Ser 2000 A (FGIC)					5.875				01/01/17				5,627,750
	5,000			Airport Passenger Facilities Charge Ser 2004 C (FSA)					5.00				01/01/33				5,119,650
	4,000			Airport Passenger Facilities Charge Ser 2004 J (FSA)					5.00				01/01/34				4,093,280
	3,460			Hawaii, Airport 2000 Ser B (AMT) (FGIC)					6.625				07/01/17				3,980,315
	8,000			Chicago, Illinois, O'Hare Int'l Airport 3rd Lien Ser 2003 B-2 (AMT) (FSA)					5.75				01/01/24				8,798,640
	6,000			Regional Transportation Authority, Illinois, Refg Ser 1999 (FSA)					5.75				06/01/21				7,162,200

See Notes to Financial Statements

16

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
				Kentucky Turnpike Authority,
$	9,000			Economic Development Road Refg Ser 1995 (Ambac)					6.50	%			07/01/08			$	10,194,480
	3,500			Resource Recovery Road 1987 Ser A BIGS					8.50				07/01/06				3,818,430
	30,000			Resource Recovery Road 1987 Ser A					5.00				07/01/08				30,213,599
	7,725			Massachusetts Turnpike Authority, Western 1997 Ser A (MBIA)					5.55				01/01/17				7,816,155
	4,140			Missouri Highways & Transportation Commission, Ser A 2001					5.125				02/01/19				4,447,685
	5,000			Clark County, Nevada, Airport Sub Lien Ser 2004 (AMT) (FGIC)					5.50				07/01/23				5,421,300
	5,000			Nevada Department of Business & Industry, Las Vegas Monorail 1st Tier Ser 2000 (Ambac)					5.375				01/01/40				5,186,000
				New Jersey Turnpike Authority,
	10,000			Ser 2003 A (FGIC)					5.00				01/01/27				10,375,000
	3,000			Ser 2003 A (Ambac)					5.00				01/01/30				3,095,370
	6,595			Albuquerque, New Mexico, Airport Refg Ser 1997 (AMT) (Ambac)					6.375				07/01/15				7,270,790
				Metropolitan Transportation Authority, New York,
	1,460			Service Contract Ser 2002 A (MBIA)					5.50				01/01/20				1,637,857
	5,000			Service Contract Ser 2002 B (MBIA)					5.50				07/01/24				5,568,500
	10,000			Transportation Refg Ser 2002 A (Ambac)					5.50				11/15/18				11,243,100
	8,000			Port Authority of New York & New Jersey, Cons 135th Ser (XLCA)††					5.00				09/15/29				8,273,680
	10,000			Puerto Rico Highway & Transportation Authority, Refg Ser X					5.50				07/01/15				11,349,299
	9,090			Austin, Texas, Airport Prior Lien Ser 1995 A (AMT) (MBIA)					6.125				11/15/25				9,544,046
				Dallas Fort Worth International Airport, Texas,
	4,000			Refg Ser 1995 (FGIC)					5.625				11/01/15				4,104,160
	10,000			Ser A (AMT) (FSA)					5.25				11/01/24				10,481,600
	5,000			Houston, Texas, Airport Sub Lien Ser 2000 A (AMT) (FSA)					5.875				07/01/17				5,479,400
	234,450																241,654,735
				Water & Sewer Revenue (12.6%)
	2,000			Phoenix Civic Improvement Corporation, Arizona, Wastewater Ser 2004 (MBIA)					5.00				07/01/27				2,083,680
	2,000			San Francisco Public Utilities Commission, California, Water 1996 Ser A					5.00				11/01/21				2,055,820
	4,000			Atlanta, Georgia, Water & Wastewater Ser 2004 (FSA)					5.00				11/01/24				4,230,600
				Augusta, Georgia,
	5,000			Water & Sewer Ser 2000 (FSA)					5.25				10/01/26				5,370,000
	3,000			Water & Sewer Ser 2004 A (FSA)					5.25				10/01/39				3,177,990
	5,000			Fulton County, Georgia, Water & Sewerage Ser 1998 (FGIC)					4.75				01/01/28				5,020,400
	8,000			Indiana Bond Bank, Revolving Fund Ser 2001A					5.375				02/01/19				8,903,840
	8,000			Indianapolis Local Public Improvement Bond Bank, Indiana, Water Works Ser 2002 A (MBIA)					5.125				07/01/27				8,346,320

See Notes to Financial Statements

17

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	5,000			Louisville & Jefferson County Metropolitan Sewer District, Kentucky, Ser 1998 A (FGIC)					4.75	%			05/15/28			$	5,017,350
	6,000			Boston Water & Sewer Commission, Massachusetts, 1998 Ser D (FGIC)					4.75				11/01/22				6,122,940
	4,925			Detroit, Michigan, Water Supply Sr Lien Ser 2001 A (FGIC)					5.25				07/01/33				5,193,856
	9,000			Passaic Valley Sewerage Commissioners, New Jersey, Ser F (FGIC)					5.00				12/01/19				9,679,590
	5,000			New York City Municipal Water Finance Auhtority, New York, Water & Sewer 2004 Ser B (Ambac)					5.00				06/15/28				5,184,500
	2,995			Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA)					5.00				01/01/23				3,153,615
	5,000			Spartanburg, South Carolina, Jr Lien Water Ser 1998 (FGIC)					5.25				06/01/28				5,342,500
				Metropolitan Government of Nashville & Davidson County, Tennessee,
	2,000			Refg 1986					5.50				01/01/16				2,005,180
	5,000			Refg Ser 1998 A (FGIC)					4.75				01/01/22				5,101,400
	7,100			Austin, Texas, Water & Wastewater Refg Ser 2001 A (FSA)				��	5.75				05/15/17				8,031,023
				Houston, Texas, Combined Utility,
	20,000			First Lien Refg Ser 2004 A (FSA)					5.25				05/15/22				21,733,400
	5,000			First Lien Refg Ser 2004 A (MBIA)					5.25				05/15/25				5,380,950
				San Antonio, Texas,
	1,000			Water & Refg Ser 2002 (FSA)					5.50				05/15/19				1,113,050
	5,000			Water & Refg Ser 2002 (FSA)					5.00				05/15/28				5,118,850
	5,000			Tarrant Regional Water District, Texas, Water Ser 2002 (FSA)					5.375				03/01/16				5,551,900
	1,300			Wichita Falls, Texas, Water & Sewer Ser 2001 (Ambac)					5.375				08/01/24				1,414,829
	10,000			Richmond, Virginia, Public Utilities Refg Ser 2002 (FSA)					5.00				01/15/33				10,228,900
				Seattle, Washington,
	10,000			Water Refg 2003 (MBIA)					5.00				09/01/20				10,639,100
	10,000			Water Refg 2003 (MBIA)					5.00				09/01/23				10,505,100
	156,320																165,706,683
				Other Revenue (3.7%)
	10,000			California, Economic Recovery Ser 2004 A					5.00				07/01/16				10,694,300
				New Jersey Economic Development Authority,
	2,000			Cigarette Tax Ser 2004					5.50				06/15/31				2,055,600
	2,500			Cigarette Tax Ser 2004					5.75				06/15/34				2,602,175
				New York City Transitional Finance Authority, New York,
	8,000			Refg 2003 Ser A					5.50				11/01/26				8,996,080
	7,000			Refg 2003 Ser D (MBIA)					5.25				02/01/21				7,586,460
	5,000			New York Local Government Assistance Corporation, Ser 1993 C					5.50				04/01/17				5,738,750
	10,000			Sales Tax Asset Receivable Corporation, New York, 2005 Ser A (Ambac)					5.00				10/15/29				10,371,600
	44,500																48,044,965

See Notes to Financial Statements

18

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
				Refunded (11.0%)
$	5,000			Denver, Colorado, Civic Center Ser 2000 B COPs (Ambac)					5.50	%			12/01/10	†		$	5,728,000
	2,500			Mid-Bay Bridge Authority, Florida, Ser 1991 A (ETM)					6.875				10/01/22				3,328,400
	800			Northern Palm Beach County Improvement District, Florida, Water Control & Impr #9A Ser 1996 A (ETM)					6.80				08/01/06				836,944
	8,000			Hawaii, 1999 Ser CT (FSA)					5.875				09/01/09	†			9,185,680
	5,000			Hawaii Department of Budget & Finance, Queen's Health 1996 Ser A					6.00				07/01/06	†			5,371,350
	2,700			Kansas Development Finance Authority, Public Water Supply Ser 2000-2 (Ambac)					5.75				10/01/10	†			3,096,252
				Massachusetts,
	10,000			2000 Ser C (original maturity 10/01/14)					5.75				10/01/10	†			11,365,600
	10,000			2000 Ser C (original maturity 10/01/19)					5.75				10/01/10	†			11,365,600
	2,500			Massachusetts, Health & Educational Facilities Authority, Malden Hospital – FHA Ins Mtge Ser A					5.00				08/01/10	†			2,692,425
				New Jersey Highway Authority,
	7,000			Senior Parkway 1999 Ser					5.625				01/01/10	†			7,982,870
	10,000			Senior Parkway 2001 Ser (FGIC)					5.25				01/01/12	†			11,273,200
				New York State Dormitory Authority,
	7,800			State University Ser 2000 B					5.375				05/15/10	†			8,862,672
	12,175			Suffolk County Judicial Ser 1986 (ETM)					7.375				07/01/16				15,045,500
				Charlotte, North Carolina,
	4,000			Water & Sewer Ser 2000 (original maturity 06/01/19)					5.75				06/01/10	†			4,606,320
	4,000			Water & Sewer Ser 2000 (original maturity 06/01/20)					5.75				06/01/10	†			4,606,320
	5,000			Water & Sewer Ser 2000					5.25				06/01/10	†			5,633,350
	15,000			South Carolina Public Service Authority, 1995 Refg Ser A (Ambac)					6.25				01/01/06	†			15,895,800
	10,000			South Carolina Transportation Infrastructure Bank, Ser 1999 A (Ambac)					5.50				10/01/09	†			11,335,200
	5,000			Salt Lake City, Utah, IHC Hospital Inc Ser 1983 (ETM)					5.00				06/01/15				5,538,350
	126,475																143,749,833
	1,195,237			Total Tax-Exempt Municipal Bonds (Cost $1,145,604,164)													1,248,784,426
				Short-Term Tax-Exempt Municipal Obligations (3.5%)
	9,000			Los Angeles Convention & Exhibition Center Authority, California, Ser 1985 COPs					9.00				12/01/05	†			9,565,560
	7,430			Indiana Health Facility Financing Authority, Clarian Health Obligated Group Ser 2000 B (Demand 01/03/05)					2.22	*			03/01/30				7,430,000
	7,000			Indiana University, Student Fee Ser K (MBIA)					5.875				08/01/05	†			7,294,560
	8,500			Massachusetts Industrial Finance Agency, Eastern Edison Co Refg Ser 1993 (called for redemption 01/10/05)					5.875				08/01/08				8,593,245
	5,000			Ohio Building Authority, 1985 Ser C					9.75				10/01/05				5,093,550

See Notes to Financial Statements

19

Morgan Stanley Tax-Exempt Securities Trust

Portfolio of Investments December 31, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								COUPON RATE				MATURITY DATE				VALUE
$	7,700			Harris County Health Facilities Development Corporation, Texas, Methodist Hospital Ser 2002 (Demand 01/03/05)					2.20*	%		12/01/32				$	7,700,000
	44,630			Total Short-Term Tax-Exempt Municipal Obligations (Cost $44,350,916)													45,676,915
$	1,239,867			Total Investments (Cost $1,189,955,080) (b)									98.8	%			1,294,461,341
				Other Assets in Excess of Liabilities									1.2				16,032,806
				Net Assets									100.0	%		$	1,310,494,147

AMT Alternative Minimum Tax.

BIGS Bond Income Growth Securities.

COPs Certificates of Participation.

ETM Escrowed to maturity.

INFLOS Inverse Floating Rate Securities (Illiquid securities).

RITES Residual Interest Tax-Exempt Securities (Illiquid securities).

† Prerefunded to call date shown.

†† Joint exemption in locations shown.

‡ Current coupon rate for inverse floating rate municipal obligation. This rate resets periodically as the auction rate on the related security changes. Positions in inverse floating rate municipal obligations have a total value of $59,639,425 which represents 4.6% of net assets.

# Currently a zero coupon security; will convert to 5.38% on January 1, 2011.

## Currently a 6.50% coupon security; will convert to 8.00% on January 1, 2009.

### Currently a zero coupon security; will convert to 5.65% on June 15, 2017.

* Current coupon of variable rate demand obligation.

(a) Resale is restricted to qualified institutional investors.

(b) The aggregate cost for federal income tax purposes is $1,189,472,282. The aggregate gross unrealized appreciation is $105,876,966 and the aggregate gross unrealized depreciation is $887,907, resulting in net unrealized appreciation of $104,989,059.

Bond Insurance:

Ambac
Ambac Assurance Corporation.

Connie Lee
Connie Lee Insurance Company – A wholly owned subsidiary of Ambac Assurance Corporation.

FHA Federal Housing Administration.

FGIC Financial Guaranty Insurance Company.

FSA Financial Security Assurance Inc.

MBIA Municipal Bond Investors Assurance Corporation.

XLCA XL Capital Assurance Inc.

See Notes to Financial Statements

20

Morgan Stanley Tax-Exempt Securities Trust

Financial Statements

Statement of Assets and Liabilities

December 31, 2004

Assets:
Investments in securities, at value
(cost $1,189,955,080)				$	1,294,461,341
Cash					7,555
Receivable for:
Interest					20,239,786
Investments sold					1,841,373
Shares of beneficial interest sold					386,485
Prepaid expenses and other assets					43,244
Total Assets					1,316,979,784
Liabilities:
Payable for:
Dividends and distributions to
shareholders					5,361,840
Investment advisory fee					383,583
Shares of beneficial interest
redeemed					209,582
Distribution fee					147,915
Administration fee					88,952
Accrued expenses and other payables					293,765
Total Liabilities					6,485,637
Net Assets				$	1,310,494,147
Composition of Net Assets:
Paid-in-capital				$	1,205,861,449
Net unrealized appreciation					104,506,261
Accumulated undistributed net investment
income					136,694
Distributions in excess of net realized gain					(10,257	)
Net Assets				$	1,310,494,147
Class A Shares:
Net Assets				$	128,577,954
Shares Outstanding (unlimited authorized,
$.01 par value)					10,875,056
Net Asset Value Per Share				$	11.82
Maximum Offering Price Per Share,
(net asset value plus 4.44% of net
asset value)				$	12.34
Class B Shares:
Net Assets				$	195,858,545
Shares Outstanding (unlimited authorized, $.01 par value)					16,497,231
Net Asset Value Per Share				$	11.87
Class C Shares:
Net Assets				$	35,265,420
Shares Outstanding (unlimited authorized, $.01 par value)					2,978,526
Net Asset Value Per Share				$	11.84
Class D Shares:
Net Assets				$	950,792,228
Shares Outstanding (unlimited authorized,
$.01 par value)					80,462,232
Net Asset Value Per Share				$	11.82

Statement of Operations

For the year ended December 31, 2004

Net Investment Income:
Interest Income				$	69,977,567
Expenses
Investment advisory fee					5,575,184
Distribution fee (Class A shares)					166,758
Distribution fee (Class B shares)					1,262,686
Distribution fee (Class C shares)					257,208
Transfer agent fees and expenses					816,239
Administration fee					175,458
Shareholder reports and notices					95,698
Professional fees					87,251
Registration fees					64,256
Custodian fees					57,593
Trustees' fees and expenses					34,421
Other					90,795
Total Expenses					8,683,547
Less: expense offset					(55,581	)
Net Expenses					8,627,966
Net Investment Income					61,349,601
Net Realized and Unrealized Gain (Loss):
Net Realized Gain (Loss) on:
Investments					7,848,904
Futures contracts					(369,519	)
Net Realized Gain					7,479,385
Net Change in Unrealized Appreciation/Depreciation on:
Investments					(18,616,505	)
Futures contracts					59,869
Net Depreciation					(18,556,636	)
Net Loss					(11,077,251	)
Net Increase				$	50,272,350

See Notes to Financial Statements

21

Morgan Stanley Tax-Exempt Securities Trust

Financial Statements continued

Statement of Changes in Net Assets

				FOR THE YEAR ENDED DECEMBER 31, 2004				FOR THE YEAR ENDED DECEMBER 31, 2003
Increase (Decrease) in Net Assets:
Operations:
Net investment income				$	61,349,601			$	69,825,830
Net realized gain					7,479,385				154,875
Net change in unrealized appreciation/depreciation					(18,556,636	)			10,666,085
Net Increase					50,272,350				80,646,790
Dividends and Distributions to Shareholders from:
Net investment income
Class A shares					(5,439,670	)			(5,540,847	)
Class B shares					(8,501,332	)			(9,743,115	)
Class C shares					(1,445,596	)			(1,491,039	)
Class D shares					(46,269,847	)			(52,242,854	)
Net realized gain
Class A shares					(652,885	)			(140,274	)
Class B shares					(993,065	)			(265,399	)
Class C shares					(178,948	)			(45,679	)
Class D shares					(4,841,384	)			(1,228,841	)
Total Dividends and Distributions					(68,322,727	)			(70,698,048	)
Net decrease from transactions in shares of beneficial interest					(131,266,079	)			(88,585,763	)
Net Decrease					(149,316,456	)			(78,637,021	)
Net Assets:
Beginning of period					1,459,810,603				1,538,447,624
End of Period (Including accumulated undistributed net investment income of $136,694 and $364,785, respectively)				$	1,310,494,147			$	1,459,810,603

See Notes to Financial Statements

22

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004

1.   Organization and Accounting Policies

Morgan Stanley Tax-Exempt Securities Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended the ("Act"), as a diversified, open-end management investment company. The Fund's investment objective is to provide a high level of current income which is exempt from federal income tax, consistent with the preservation of capital. The Fund was incorporated in Maryland in 1979, commenced operations on March 27, 1980 and reorganized as a Massachusetts business trust on April 30, 1987. On July 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class D shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares, and most Class B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within one year, six years and one year, respectively. Class D shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.

The following is a summary of significant accounting policies:

A.   Valuation of Investments — (1) portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service uses both a computerized grid matrix of tax-exempt securities and evaluations by its staff, in each case based on information concerning market transactions and quotations from dealers which reflect the mean between the last reported bid and asked price. The portfolio securities are thus valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. The Trustees believe that timely and reliable market quotations are generally not readily available for purposes of valuing tax-exempt securities and that the valuations supplied by the pricing service are more likely to approximate the fair value of such securities; (2) futures are valued at the latest sale price on the commodities exchange on which they trade unless it is determined that such price does not reflect their market value, in which case they will be valued at their fair value as determined in good faith under procedures established by and under the supervision of the Trustees; and (3) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.

B.   Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities. Interest income is accrued daily.

23

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

C.   Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.

D.   Futures Contracts — A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains and losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

E.   Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable and nontaxable income to its shareholders. Accordingly, no federal income tax provision is required.

F.   Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.

G.   Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

2.   Investment Advisory/Administration Agreements

Effective November 1, 2004, pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Advisors Inc. (the "Investment Adviser"), the Fund pays the Investment Adviser an advisory fee, accrued daily and payable monthly, by applying the following annual rates to the Fund's net assets determined as of the close of each business day: 0.42% to the portion of daily net assets not exceeding $500 million; 0.345% to the portion of daily net assets exceeding $500 million but not exceeding $750 million; 0.295% to the portion of daily net assets exceeding $750 million but not exceeding $1 billion; 0.27% to the portion of daily net assets exceeding $1 billion but not exceeding $1.25 billion; 0.245% to the portion of daily net assets exceeding $1.25 billion but not exceeding $2.5 billion; and 0.22% to the portion of daily net assets exceeding $2.5 billion.

Effective November 1, 2004, pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the "Administrator"), an affiliate of the Investment Adviser, the Fund pays an administration fee, accrued daily and payable monthly, by applying the annual rate of 0.08% to the Fund's daily net assets.

24

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

Prior to November 1, 2004, the Fund had retained the Investment Adviser to provide administrative services and to manage the investment of the Fund's assets pursuant to an investment management agreement pursuant to which the Fund paid the Investment Adviser a monthly management fee accrued daily and payable monthly, by applying the following annual rates to the Fund's net assets determined as of the close of each business day: 0.50% to the portion of daily net assets not exceeding $500 million; 0.425% to the portion of daily net assets exceeding $500 million but not exceeding $750 million; 0.375% to the portion of daily net assets exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of daily net assets exceeding $1 billion but not exceeding $1.25 billion; 0.325% to the portion of daily net assets exceeding $1.25 billion but not exceeding $2.5 billion; and 0.30% to the portion of daily net assets exceeding $2.5 billion.

3.   Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Adviser and Administrator. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A – up to 0.25% of the average daily net assets of Class A; (ii) Class B – up to 0.60% of the average daily net assets of Class B; and (iii) Class C – up to 0.70% of the average daily net assets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fund that such excess amounts totaled $5,700,376 at December 31, 2004.

In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 0.70% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors or other selected broker-dealer representatives may be reimbursed in the subsequent calendar year. For the year ended December 31, 2004, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.14% and 0.70%, respectively.

The Distributor has informed the Fund that for the year ended December 31, 2004, it received contingent deferred sales charges from certain redemptions of the Fund's Class A shares, Class B shares and Class C

25

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

shares of $720, $401,772 and $11,197, respectively and received $209,162 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.

4.   Security Transactions and Transactions with Affiliates

The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the year ended December 31, 2004, aggregated $185,406,361 and $329,983,582, respectively. Included in the aforementioned transactions are purchases and sales of $15,822,775 and $10,329,400, respectively, with other Morgan Stanley funds, including net realized losses of $180,014.

Morgan Stanley Trust, an affiliate of the Investment Adviser, Administrator and Distributor, is the Fund's transfer agent. At December 31, 2004, the Fund had transfer agent fees and expenses payable of approximately $60,800.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. Aggregate pension costs for the year ended December 31, 2004, included in Trustees' fees and expenses in the Statement of Operations amounted to $15,592. At December 31, 2004, the Fund had an accrued pension liability of $122,498 which is included in accrued expenses in the Statement of Assets and Liabilities. On December 2, 2003, the Trustees voted to close the plan to new participants and eliminate the future benefits growth due to increases to compensation after July 31, 2003.

Effective April 1, 2004, the Fund began an unfunded Deferred Compensation Plan (the "Compensation Plan") which allows each independent Trustee to defer payment of all, or a portion, of the fees he receives for serving on the Board of Trustees. Each eligible Trustee generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund.

26

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

5.   Shares of Beneficial Interest

Transactions in shares of beneficial interest were as follows:

				FOR THE YEAR ENDED DECEMBER 31, 2004								FOR THE YEAR ENDED DECEMBER 31, 2003
				SHARES				AMOUNT				SHARES				AMOUNT
CLASS A SHARES
Sold					2,673,050			$	31,459,356				14,862,986			$	176,951,492
Reinvestment of dividends and distributions					383,151				4,525,839				363,677				4,316,619
Redeemed					(2,140,978	)			(25,329,649	)			(15,421,715	)			(183,534,432	)
Net increase (decrease) – Class A					915,223				10,655,546				(195,052	)			(2,266,321	)
CLASS B SHARES
Sold					1,243,741				14,840,921				3,526,482				42,027,370
Reinvestment of dividends and distributions					401,060				4,758,984				402,699				4,801,131
Redeemed					(4,380,329	)			(51,922,900	)			(4,419,289	)			(52,506,680	)
Net decrease – Class B					(2,735,528	)			(32,322,995	)			(490,108	)			(5,678,179	)
CLASS C SHARES
Sold					518,287				6,175,758				2,336,446				27,820,281
Reinvestment of dividends and distributions					88,239				1,044,089				80,533				957,683
Redeemed					(1,103,515	)			(13,099,616	)			(1,432,682	)			(17,004,757	)
Net increase (decrease) – Class C					(496,989	)			(5,879,769	)			984,297				11,773,207
CLASS D SHARES
Sold					1,577,615				18,705,671				3,735,691				44,187,423
Reinvestment of dividends and distributions					2,190,563				25,868,902				2,218,901				26,329,042
Redeemed					(12,569,676	)			(148,293,434	)			(13,750,120	)			(162,930,935	)
Net decrease – Class D					(8,801,498	)			(103,718,861	)			(7,795,528	)			(92,414,470	)
Net decrease in Fund					(11,118,792	)		$	(131,266,079	)			(7,496,391	)		$	(88,585,763	)

6.   Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.

27

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

The tax character of distributions paid was as follows:

				FOR THE YEAR ENDED DECEMBER 31, 2004				FOR THE YEAR ENDED DECEMBER 31, 2003
Tax-exempt income				$	61,267,339			$	69,017,855
Ordinary income					389,106				—
Long-term capital gains					6,666,282				1,680,193
Total distributions				$	68,322,727			$	70,698,048

As of December 31, 2004, the tax-basis components of accumulated earnings were as follows:

Net accumulated earnings					—
Post-October losses				$	(10,243	)
Temporary differences					(346,118	)
Net unrealized appreciation					104,989,059
Total accumulated earnings				$	104,632,698

As of December 31, 2004, the Fund had temporary book/tax differences primarily attributable to post-October losses (capital losses incurred after October 31 within the taxable year which are deemed to arise on the first business day of the Fund's next taxable year), book amortization of discounts on debt securities and dividend payable and permanent book/tax differences primarily attributable to tax adjustments on debt securities sold by the Fund. To reflect reclassifications arising from the permanent differences, distributions in excess of net realized gain was charged $86,811, paid-in-capital was credited $8,058, and accumulated undistributed net investment income was credited $78,753.

7.   Expense Offset

The expense offset represents a reduction of the custodian fees for earnings on cash balances maintained by the Fund.

8.   Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in residual interest bonds, which are inverse floating rate municipal obligations. The prices of these securities are subject to greater market fluctuations during periods of changing prevailing interest rates than are comparable fixed rate obligations.

28

Morgan Stanley Tax-Exempt Securities Trust

Notes to Financial Statements December 31, 2004 continued

To hedge against adverse interest rate changes, the Fund may invest in financial futures contracts or municipal bond index futures contracts ("futures contracts").

These futures contracts involve elements of market risk in excess of the amount reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying securities. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

9.   Legal Matters

The Investment Adviser, certain affiliates of the Investment Adviser, certain officers of such affiliates and certain investment companies advised by the Investment Adviser or its affiliates, including the Fund, are named as defendants in a number of similar class action complaints which were recently consolidated. This consolidated action also names as defendants certain individual Trustees and Directors of the Morgan Stanley funds. The consolidated amended complaint generally alleges that defendants, including the Fund, violated their statutory disclosure obligations and fiduciary duties by failing properly to disclose (i) that the Investment Adviser and certain affiliates of the Investment Adviser allegedly offered economic incentives to brokers and others to recommend the funds advised by the Investment Adviser or its affiliates to investors rather than funds managed by other companies, and (ii) that the funds advised by the Investment Adviser or its affiliates, including the Fund, allegedly paid excessive commissions to brokers in return for their efforts to recommend these funds to investors. The complaint seeks, among other things, unspecified compensatory damages, rescissionary damages, fees and costs. The defendants have moved to dismiss the action and intend to otherwise vigorously defend it. While the Fund believes that it has meritorious defenses, the ultimate outcome of this matter is not presently determinable at this early stage of the litigation, and no provision has been made in the Fund's financial statements for the effect, if any, of this matter.

29

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights

Selected ratios and per share data for a share of beneficial interest outstanding throughout each period:

				FOR THE YEAR ENDED DECEMBER 31,
				2004				2003				2002				2001				2000
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period				$	11.97			$	11.88			$	11.50			$	11.71			$	11.08
Income (loss) from investment operations:
Net investment income					0.53				0.54				0.56				0.59				0.58
Net realized and unrealized gain (loss)					(0.09	)			0.10				0.46				(0.12	)			0.63
Total income from investment operations					0.44				0.64				1.02				0.47				1.21
Less dividends and distributions from:
Net investment income					(0.53	)			(0.54	)			(0.56	)			(0.58	)			(0.58	)
Net realized gain					(0.06	)			(0.01	)			(0.08	)			(0.10	)			—
Total dividends and distributions					(0.59	)			(0.55	)			(0.64	)			(0.68	)			(0.58	)
Net asset value, end of period				$	11.82			$	11.97			$	11.88			$	11.50			$	11.71
Total Return†					3.82	%			5.53	%			9.03	%			4.05	%			11.21	%
Ratios to Average Net Assets(2):
Expenses (before expense offset)					0.65	%			0.70	%			0.67	%			0.66	% (1)			0.72	%
Net investment income					4.48	%			4.58	%			4.74	%			4.97	%			5.14	%
Supplemental Data:
Net assets, end of period, in thousands					$128,578				$119,199				$120,659				$26,984				$21,685
Portfolio turnover rate					14	%			15	%			13	%			17	%			17	%

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Does not reflect the effect of expense offset of 0.01%.

(2) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

30

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued

				FOR THE YEAR ENDED DECEMBER 31,
				2004				2003				2002				2001				2000
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period				$	12.02			$	11.93			$	11.56			$	11.76			$	11.13
Income (loss) from investment operations:
Net investment income					0.48				0.50				0.51				0.54				0.54
Net realized and unrealized gain (loss)					(0.09	)			0.09				0.45				(0.11	)			0.63
Total income from investment operations					0.39				0.59				0.96				0.43				1.17
Less dividends and distributions from:
Net investment income					(0.48	)			(0.49	)			(0.51	)			(0.53	)			(0.54	)
Net realized gain					(0.06	)			(0.01	)			(0.08	)			(0.10	)			—
Total dividends and distributions					(0.54	)			(0.50	)			(0.59	)			(0.63	)			(0.54	)
Net asset value, end of period				$	11.87			$	12.02			$	11.93			$	11.56			$	11.76
Total Return†					3.34	%			5.12	%			8.44	%			3.68	%			10.75	%
Ratios to Average Net Assets(2):
Expenses (before expense offset)					1.11	%			1.09	%			1.09	%			1.09	% (1)			1.11	%
Net investment income					4.02	%			4.19	%			4.32	%			4.54	%			4.75	%
Supplemental Data:
Net assets, end of period, in thousands					$195,859				$231,146				$235,358				$200,293				$156,972
Portfolio turnover rate					14	%			15	%			13	%			17	%			17	%

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Does not reflect the effect of expense offset of 0.01%.

(2) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

31

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued

				FOR THE YEAR ENDED DECEMBER 31,
				2004				2003				2002				2001				2000
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period				$	11.99			$	11.90			$	11.53			$	11.73			$	11.10
Income (loss) from investment operations:
Net investment income					0.46				0.49				0.50				0.52				0.52
Net realized and unrealized gain (loss)					(0.09	)			0.09				0.44				(0.10	)			0.63
Total income from investment operations					0.37				0.58				0.94				0.42				1.15
Less dividends and distributions from:
Net investment income					(0.46	)			(0.48	)			(0.49	)			(0.52	)			(0.52	)
Net realized gain					(0.06	)			(0.01	)			(0.08	)			(0.10	)			—
Total dividends and distributions					(0.52	)			(0.49	)			(0.57	)			(0.62	)			(0.52	)
Net asset value, end of period				$	11.84			$	11.99			$	11.90			$	11.53			$	11.73
Total Return†					3.24	%			5.02	%			8.34	%			3.58	%			10.66	%
Ratios to Average Net Assets(2):
Expenses (before expense offset)					1.21	%			1.19	%			1.19	%			1.19	% (1)			1.21	%
Net investment income					3.92	%			4.09	%			4.22	%			4.44	%			4.65	%
Supplemental Data:
Net assets, end of period, in thousands					$35,265				$41,661				$29,648				$16,270				$11,578
Portfolio turnover rate					14	%			15	%			13	%			17	%			17	%

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Does not reflect the effect of expense offset of 0.01%.

(2) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

32

Morgan Stanley Tax-Exempt Securities Trust

Financial Highlights continued

				FOR THE YEAR ENDED DECEMBER 31,
				2004				2003				2002				2001				2000
Class D Shares
Selected Per Share Data:
Net asset value, beginning of period				$	11.96			$	11.88			$	11.50			$	11.70			$	11.07
Income (loss) from investment operations:
Net investment income					0.55				0.57				0.58				0.61				0.60
Net realized and unrealized gain (loss)					(0.08	)			0.08				0.46				(0.11	)			0.63
Total income from investment operations					0.47				0.65				1.04				0.50				1.23
Less dividends and distributions from:
Net investment income					(0.55	)			(0.56	)			(0.58	)			(0.60	)			(0.60	)
Net realized gain					(0.06	)			(0.01	)			(0.08	)			(0.10	)			—
Total dividends and distributions					(0.61	)			(0.57	)			(0.66	)			(0.70	)			(0.60	)
Net asset value, end of period				$	11.82			$	11.96			$	11.88			$	11.50			$	11.70
Total Return†					4.05	%			5.67	%			9.21	%			4.31	%			11.44	%
Ratios to Average Net Assets(2):
Expenses (before expense offset)					0.51	%			0.49	%			0.49	%			0.49	% (1)			0.51	%
Net investment income					4.62	%			4.79	%			4.92	%			5.14	%			5.35	%
Supplemental Data:
Net assets, end of period, in thousands					$950,792				$1,067,805				$1,152,783				$1,189,492				$852,950
Portfolio turnover rate					14	%			15	%			13	%			17	%			17	%

† Calculated based on the net asset value as of the last business day of the period.

(1) Does not reflect the effect of expense offset of 0.01%.

(2) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

33

Morgan Stanley Tax-Exempt Securities Trust

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees of
Morgan Stanley Tax-Exempt Securities Trust:

We have audited the accompanying statement of assets and liabilities of Morgan Stanley Tax-Exempt Securities Trust (the "Fund"), including the portfolio of investments, as of December 31, 2004, and the related statements of operations for the year then ended and changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2004, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Morgan Stanley Tax-Exempt Securities Trust as of December 31, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
New York, New York
February 14, 2005

34

Morgan Stanley Tax Exempt Securities Trust

Trustee and Officer Information

Independent Trustees:

Name, Age and Address of Independent Trustee

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Trustee***

Other Directorships Held by Trustee

Michael Bozic (63) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 919 Third Avenue New York, NY 10022-3902

Trustee

Since April 1994

Private Investor; Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); formerly Vice Chairman of Kmart Corporation (December 1998-October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995-November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991-July 1995); formerly variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck & Co.

208

None.

Edwin J. Garn (72) 1031 N. Chartwell Court Salt Lake City, UT 84103

Trustee

Since January 1993

Consultant; Managing Director of Summit Ventures LLC; Director or Trustee of the Retail Funds (since January 1993) and the Institutional Funds (since July 2003); member of the Utah Regional Advisory Board of Pacific Corp.; formerly Managing Director of Summit Ventures LLC (2000-2004); United States Senator (R-Utah) (1974-1992) and Chairman, Senate Banking Committee (1980-1986), Mayor of Salt Lake City, Utah (1971-1974), Astronaut, Space Shuttle Discovery (April 12-19, 1985), and Vice Chairman, Huntsman Corporation (chemical company).

208

Director of Franklin Covey (time management systems), BMW Bank of North America, Inc. (industrial loan corporation), United Space Alliance (joint venture between Lockheed Martin and the Boeing Company) and Nuskin Asia Pacific (multilevel marketing); member of the board of various civic and charitable organizations.

Wayne E. Hedien (70) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 919 Third Avenue New York, NY 10022-3902

Trustee

Since September 1997

Retired; Director or Trustee of the Retail Funds; (since September 1997) and the Institutional Funds (since July 2003); formerly associated with the Allstate Companies (1966-1994), most recently as Chairman of The Allstate Corporation (March 1993-December 1994) and Chairman and Chief Executive Officer of its wholly-owned subsidiary, Allstate Insurance Company (July 1989-December 1994).

208

Director of The PMI Group Inc. (private mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural History; director of various other business and charitable organizations.

35

Morgan Stanley Tax Exempt Securities Trust

Trustee and Officer Information continued

Name, Age and Address of Independent Trustee

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Trustee***

Other Directorships Held by Trustee

Dr. Manuel H. Johnson (55) c/o Johnson Smick International, Inc. 2099 Pennsylvania Avenue, N.W. Suite 950 Washington, D.C. 20006

Trustee

Since July 1991

Senior Partner, Johnson Smick International, Inc., a consulting firm; Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); Co-Chairman and a founder of the Group of Seven Council (G7C), an international economic commission; formerly Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

208

Director of NVR, Inc. (home construction); Director of KFX Energy; Director of RBS Greenwich Capital Holdings (financial holding company).

Joseph J. Kearns (62) c/o Kearns & Associates LLC PMB754 23852 Pacific Coast Highway Malibu, CA 90265

Trustee

Since July 2003

President, Kearns & Associates LLC (investment consulting); Deputy Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since August 1994); previously Chairman of the Audit Committee of the Institutional Funds (October 2001-July 2003); formerly CFO of the J. Paul Getty Trust.

209

Director of Electro Rent Corporation (equipment leasing), The Ford Family Foundation, and the UCLA Foundation.

Michael E. Nugent (68) c/o Triumph Capital, L.P. 445 Park Avenue New York, NY 10022

Trustee

Since July 1991

General Partner of Triumph Capital, L.P., a private investment partnership; Chairman of the Insurance Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2001); formerly Vice President, Bankers Trust Company and BT Capital Corporation (1984-1988).

208

Director of various business organizations.

Fergus Reid (72) c/o Lumelite Plastics Corporation 85 Charles Colman Blvd. Pawling, NY 12564

Trustee

Since July 2003

Chairman of Lumelite Plastics Corporation; Chairman of the Governance Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since June 1992).

209

Trustee and Director of certain investment companies in the JPMorgan Funds complex managed by J.P. Morgan Investment Management Inc.

36

Morgan Stanley Tax Exempt Securities Trust

Trustee and Officer Information continued

Interested Trustees:

Name, Age and Address of Interested Trustee

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Trustee***

Other Directorships Held by Trustee

Charles A. Fiumefreddo (71) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ 07311

Chairman of the Board and Trustee

Since July 1991

Chairman and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); formerly Chief Executive Officer of the Retail Funds (until September 2002).

208

None.

James F. Higgins (56) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ 07311

Trustee

Since June 2000

Director or Trustee of the Retail Funds (since June 2000) and the Institutional Funds (since July 2003); Senior Advisor of Morgan Stanley (since August 2000); Director of the Distributor and Dean Witter Realty Inc.; previously President and Chief Operating Officer of the Private Client Group of Morgan Stanley (May 1999-August 2000), and President and Chief Operating Officer of Individual Securities of Morgan Stanley (February 1997-May 1999).

208

Director of AXA Financial, Inc. and The Equitable Life Assurance Society of the United States (financial services).

    * This is the earliest date the Trustee began serving the funds advised by Morgan Stanley Investment Advisors Inc. (the "Investment Adviser") (the "Retail Funds").

  ** The dates referenced below indicating commencement of services as Director/Trustee for the Retail Funds and the funds advised by Morgan Stanley Investment Management Inc. and Morgan Stanley AIP GP LP (the "Institutional Funds") reflect the earliest date the Director/Trustee began serving the Retail or Institutional Funds as applicable.

*** The Fund Complex includes all open-end and closed-end funds (including all of their portfolios) advised by the Investment Adviser and any funds that have an investment adviser that is an affiliated person of the Investment Adviser (including, but not limited to, Morgan Stanley Investment Management Inc.).

37

Morgan Stanley Tax Exempt Securities Trust

Trustee and Officer Information continued

Officers:

Name, Age and Address of Executive Officer

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Mitchell M. Merin (51) 1221 Avenue of the Americas New York, NY 10020

President

Since May 1999

President and Chief Operating Officer of Morgan Stanley Investment Management Inc.; President, Director and Chief Executive Officer of the Investment Adviser and the Administrator; Chairman and Director of the Distributor; Chairman and Director of the Transfer Agent; Director of various Morgan Stanley subsidiaries; President of the Institutional Funds (since July 2003) and President of the Retail Funds; Trustee (since July 2003) and President (since December 2002) of the Van Kampen Closed-End Funds; Trustee and President (since October 2002) of the Van Kampen Open-End Funds.

Ronald E. Robison (65) 1221 Avenue of the Americas New York, NY 10020

Executive Vice President and Principal Executive Officer

Since April 2003

Principal Executive Officer of Funds in the Fund Complex (since May 2003); Managing Director of Morgan Stanley & Co. Incorporated, Morgan Stanley Investment Management Inc. and Morgan Stanley; Managing Director, Chief Administrative Officer and Director of the Investment Adviser and the Administrator; Director of the Transfer Agent; Managing Director and Director of the Distributor; Executive Vice President and Principal Executive Officer of the Institutional Funds (since July 2003) and the Retail Funds (since April 2003); Director of Morgan Stanley SICAV (since May 2004); previously President and Director of the Retail Funds (March 2001-July 2003) and Chief Global Operations Officer and Managing Director of Morgan Stanley Investment Management Inc.

Joseph J. McAlinden (61) 1221 Avenue of the Americas New York, NY 10020

Vice President

Since July 1995

Managing Director and Chief Investment Officer of the Investment Adviser and Morgan Stanley Investment Management Inc.; Director of the Transfer Agent, Chief Investment Officer of the Van Kampen Funds; Vice President of the Institutional Funds (since July 2003) and the Retail Funds (since July 1995).

Barry Fink (49) 1221 Avenue of the Americas New York, NY 10020

Vice President

Since February 1997

General Counsel (since May 2000) and Managing Director (since December 2000) of Morgan Stanley Investment Management; Managing Director (since December 2000), Secretary (since February 1997) and Director of the Investment Adviser and the Administrator; Vice President of the Retail Funds; Assistant Secretary of Morgan Stanley DW; Vice President of the Institutional Funds (since July 2003); Managing Director, Secretary and Director of the Distributor; previously Secretary (February 1997-July 2003) and General Counsel (February 1997-April 2004) of the Retail Funds; Vice President and Assistant General Counsel of the Investment Adviser and the Administrator (February 1997-December 2001).

Amy R. Doberman (42) 1221 Avenue of Americas New York, NY 10020

Vice President

Since July 2004

Managing Director and General Counsel, U.S. Investment Management; Managing Director of Morgan Stanley Investment Management Inc. and the Investment Adviser, Vice President of the Institutional and Retail Funds (since July 2004); Vice President of the Van Kampen Funds (since August 2004); previously, Managing Director and General Counsel — Americas, UBS Global Asset Management (July 2000 – July 2004) and General Counsel, Aeltus Investment Management Inc. (January 1997 – July 2000).

Carsten Otto (41) 1221 Avenue of the Americas New York, NY 10020

Chief Compliance Officer

Since October 2004

Executive Director and U.S. Director of Compliance for Morgan Stanley Investment Management (since October 2004); Executive Director of the Investment Adviser and Morgan Stanley Investment Management Inc.; formerly Assistant Secretary and Assistant General Counsel of the Morgan Stanley Retail Funds.

38

Morgan Stanley Tax Exempt Securities Trust

Trustee and Officer Information continued

Name, Age and Address of Executive Officer

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Stefanie V. Chang (38) 1221 Avenue of the Americas New York, NY 10020

Vice President

Since July 2003

Executive Director of Morgan Stanley & Co. Incorporated, Morgan Stanley Investment Management Inc. and the Investment Adviser; Vice President of the Institutional Funds and the Retail Funds (since July 2003); formerly practiced law with the New York law firm of Rogers & Wells (now Clifford Chance US LLP).

Francis J. Smith (39) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ 07311

Treasurer and Chief Financial Officer

Treasurer since July 2003 and Chief Financial Officer since September 2002

Executive Director of the Investment Adviser and Morgan Stanley Services (since December 2001); previously, Vice President of the Retail Funds (September 2002-July 2003), Vice President of the Investment Adviser and the Administrator (August 2000-November 2001) and Senior Manager at PricewaterhouseCoopers LLP (January 1998-August 2000).

Thomas F. Caloia (58) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ 07311

Vice President

Since July 2003

Executive Director (since December 2002) and Assistant Treasurer of the Investment Adviser, the Distributor and the Administrator; previously Treasurer of the Retail Funds (April 1989-July 2003); formerly First Vice President of the Investment Adviser, the Distributor and the Administrator.

Mary E. Mullin (37) 1221 Avenue of the Americas New York, NY 10020

Secretary

Since July 2003

Executive Director of Morgan Stanley & Co. Incorporated, Morgan Stanley Investment Management Inc. and the Investment Adviser; Secretary of the Institutional Funds and the Retail Funds (since July 2003); formerly practiced law with the New York law firms of McDermott, Will & Emery and Skadden, Arps, Slate, Meagher & Flom LLP.

    * This is the earliest date the Officer began serving the Retail Funds. Each Officer serves an indefinite term, until his or her successor is elected.

  ** The dates referenced below indicating commencement of service as an Officer for the Retail and Institutional Funds reflect the earliest date the Officer began serving the Retail or Institutional Funds, as applicable.

2004 Federal Tax Notice (unaudited)

During the year ended December 31, 2004, the Fund paid to its shareholders the following per share amounts from the sources indicated below:

					CLASS A				CLASS B				CLASS C				CLASS D
	Tax-Exempt Income				$	0.53			$	0.48			$	0.46			$	0.55
	Long-Term Capital Gains				$	0.06			$	0.06			$	0.06			$	0.06

39

Trustees Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien James F. Higgins Dr. Manuel H. Johnson Joseph J. Kearns Michael E. Nugent Fergus Reid Officers Charles A. Fiumefreddo Chairman of the Board Mitchell M. Merin President Ronald E. Robison Executive Vice President and Principal Executive Officer Joseph J. McAlinden Vice President Barry Fink Vice President Amy R. Doberman Vice President Carsten Otto Chief Compliance Officer Stefanie V. Chang Vice President Francis J. Smith Treasurer and Chief Financial Officer Thomas F. Caloia Vice President Mary E. Mullin Secretary Transfer Agent Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311 Independent Registered Public Accounting Firm Deloitte & Touche LLP Two World Financial Center New York, New York 10281 Investment Adviser Morgan Stanley Investment Advisors Inc. 1221 Avenue of the Americas New York, New York 10020 This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing. Investments and services offered through Morgan Stanley DW Inc., member SIPC. Morgan Stanley Distributors Inc., member NASD. © 2004 Morgan Stanley 37950RPT-RA05-00108P-Y12/04		MORGAN STANLEY FUNDS
		Morgan Stanley Tax-Exempt Securities Trust Annual Report December 31, 2004

Item 2. Code of Ethics.

(a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies to
its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Fund or a third
party.

(b) No information need be disclosed pursuant to this paragraph.

(c) The Fund has amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto to delete from the end of the
following paragraph on page 2 of the Code the phrase "to the detriment of the
Fund.":

"Each Covered Officer must not use his personal influence or personal
relationship improperly to influence investment decisions or financial reporting
by the Fund whereby the Covered Officer would benefit personally (directly or
indirectly)."

(d)  Not applicable.

(e)  Not applicable.

(f)

     (1)  The Fund's Code of Ethics is attached hereto as Exhibit A.

     (2)  Not applicable.

     (3)  Not applicable.

Item 3.  Audit Committee Financial Expert.

The Fund's Board of Trustees has determined that it has two "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees: Dr. Manuel H. Johnson and Joseph J. Kearns. Under
applicable securities laws, a person who is determined to be an audit committee
financial expert will not be deemed an "expert" for any purpose, including
without limitation for the purposes of Section 11 of the Securities Act of 1933,
as a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
n the absence of such designation or identification.



Item 4.  Principal Accountant Fees and Services.

(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:



           2004
                                                     REGISTRANT         COVERED ENTITIES(1)

              AUDIT FEES.......................      $  45,712                 N/A

              NON-AUDIT FEES
                        AUDIT-RELATED FEES.....      $     452 (2)        $ 3,746,495 (2)
                        TAX FEES...............      $   5,627 (3)        $    79,800 (4)
                        ALL OTHER FEES.........      $       -            $         -
              TOTAL NON-AUDIT FEES.............      $   6,079            $ 3,826,295

              TOTAL............................      $  51,791            $ 3,826,295

           2003
                                                     REGISTRANT         COVERED ENTITIES(1)
              AUDIT FEES.......................      $  43,830              N/A

              NON-AUDIT FEES
                        AUDIT-RELATED FEES.....      $     684 (2)        $ 2,847,161 (2)
                        TAX FEES...............      $   4,134 (3)        $   736,810 (4)
                        ALL OTHER FEES.........      $       -            $         - (5)
              TOTAL NON-AUDIT FEES.............      $   4,818            $ 3,583,971

              TOTAL............................      $  48,648            $ 3,583,971


              N/A- Not applicable, as not required by Item 4.

              (1)   Covered Entities include the Adviser (excluding
                    sub-advisors) and any entity controlling, controlled by or
                    under common control with the Adviser that provides ongoing
                    services to the Registrant.
              (2)   Audit-Related Fees represent assurance and related services
                    provided that are reasonably related to the performance of
                    the audit of the financial statements of the Covered
                    Entities' and funds advised by the Adviser or its
                    affiliates, specifically data verification and agreed-upon
                    procedures related to asset securitizations and agreed-upon
                    procedures engagements.
              (3)   Tax Fees represent tax compliance, tax planning and tax
                    advice services provided in connection with the preparation
                    and review of the Registrant's tax returns.
              (4)   Tax Fees represent tax compliance, tax planning and tax
                    advice services provided in connection with the review of
                    Covered Entities' tax returns.
              (5)   All other fees represent project management for future
                    business applications and improving business and operational
                    processes.



                                       2


(e)(1) The audit committee's pre-approval policies and procedures are as
follows:

                                                                      APPENDIX A

                                 AUDIT COMMITTEE
                          AUDIT AND NON-AUDIT SERVICES
                       PRE-APPROVAL POLICY AND PROCEDURES
                                     OF THE
                  MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS

                    AS ADOPTED AND AMENDED JULY 23, 2004,(1)


     1. STATEMENT OF PRINCIPLES

The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.

The SEC has issued rules specifying the types of services that an independent
auditor may not provide to its audit client, as well as the audit committee's
administration of the engagement of the independent auditor. The SEC's rules
establish two different approaches to pre-approving services, which the SEC
considers to be equally valid. Proposed services either: may be pre-approved
without consideration of specific case-by-case services by the Audit Committee
("general pre-approval"); or require the specific pre-approval of the Audit
Committee or its delegate ("specific pre-approval"). The Audit Committee
believes that the combination of these two approaches in this Policy will result
in an effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.

The appendices to this Policy describe the Audit, Audit-related, Tax and All
Other services that have the general pre-approval of the Audit Committee. The
term of any general pre-approval is 12 months from the date of pre-approval,
unless the Audit Committee considers and provides a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the Independent Auditors without obtaining specific
pre-approval from the Audit Committee. The Audit Committee will add to or
subtract from the list of general pre-approved services from time to time, based
on subsequent determinations.

- --------------
(1)  This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and
     Procedures (the "Policy"), adopted as of the date above, supersedes and
     replaces all prior versions that may have been adopted from time to time.

                                       3


The purpose of this Policy is to set forth the policy and procedures by which
the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.

The Fund's Independent Auditors have reviewed this Policy and believes that
implementation of the Policy will not adversely affect the Independent Auditors'
independence.

     2. DELEGATION

As provided in the Act and the SEC's rules, the Audit Committee may delegate
either type of pre-approval authority to one or more of its members. The member
to whom such authority is delegated must report, for informational purposes
only, any pre-approval decisions to the Audit Committee at its next scheduled
meeting.

     3. AUDIT SERVICES

The annual Audit services engagement terms and fees are subject to the specific
pre-approval of the Audit Committee. Audit services include the annual financial
statement audit and other procedures required to be performed by the Independent
Auditors to be able to form an opinion on the Fund's financial statements. These
other procedures include information systems and procedural reviews and testing
performed in order to understand and place reliance on the systems of internal
control, and consultations relating to the audit. The Audit Committee will
approve, if necessary, any changes in terms, conditions and fees resulting from
changes in audit scope, Fund structure or other items.

In addition to the annual Audit services engagement approved by the Audit
Committee, the Audit Committee may grant general pre-approval to other Audit
services, which are those services that only the Independent Auditors reasonably
can provide. Other Audit services may include statutory audits and services
associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4,
etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.

The Audit Committee has pre-approved the Audit services in Appendix B.1. All
other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).

     4. AUDIT-RELATED SERVICES

Audit-related services are assurance and related services that are reasonably
related to the performance of the audit or review of the Fund's financial
statements and, to the extent they are Covered Services, the Covered Entities or
that are traditionally performed by the Independent Auditors. Because the Audit
Committee believes that the provision of Audit-related services does not impair
the independence of the auditor and is consistent with the SEC's rules on
auditor independence, the Audit Committee may grant general pre-approval to
Audit-related services. Audit-related services include, among others, accounting
consultations related to accounting, financial reporting or disclosure matters

                                       4


not classified as "Audit services"; assistance with understanding and
implementing new accounting and financial reporting guidance from rulemaking
authorities; agreed-upon or expanded audit procedures related to accounting
and/or billing records required to respond to or comply with financial,
accounting or regulatory reporting matters; and assistance with internal control
reporting requirements under Forms N-SAR and/or N-CSR.

The Audit Committee has pre-approved the Audit-related services in Appendix B.2.
All other Audit-related services not listed in Appendix B.2 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).

     5. TAX SERVICES

The Audit Committee believes that the Independent Auditors can provide Tax
services to the Fund and, to the extent they are Covered Services, the Covered
Entities, such as tax compliance, tax planning and tax advice without impairing
the auditor's independence, and the SEC has stated that the Independent Auditors
may provide such services.

Pursuant to the preceding paragraph, the Audit Committee has pre-approved the
Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).

     6. ALL OTHER SERVICES

The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.

The Audit Committee has pre-approved the All Other services in Appendix B.4.
Permissible All Other services not listed in Appendix B.4 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).

     7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS

Pre-approval fee levels or budgeted amounts for all services to be provided by
the Independent Auditors will be established annually by the Audit Committee.
Any proposed services exceeding these levels or amounts will require specific
pre-approval by the Audit Committee. The Audit Committee is mindful of the
overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services.

     8. PROCEDURES

All requests or applications for services to be provided by the Independent
Auditors that do not require specific approval by the Audit Committee will be
submitted to the Fund's Chief Financial Officer and must include a detailed
description of the services to be

                                       5


rendered. The Fund's Chief Financial Officer will determine whether such
services are included within the list of services that have received the general
pre-approval of the Audit Committee. The Audit Committee will be informed on a
timely basis of any such services rendered by the Independent Auditors. Requests
or applications to provide services that require specific approval by the Audit
Committee will be submitted to the Audit Committee by both the Independent
Auditors and the Fund's Chief Financial Officer, and must include a joint
statement as to whether, in their view, the request or application is consistent
with the SEC's rules on auditor independence.

The Audit Committee has designated the Fund's Chief Financial Officer to monitor
the performance of all services provided by the Independent Auditors and to
determine whether such services are in compliance with this Policy. The Fund's
Chief Financial Officer will report to the Audit Committee on a periodic basis
on the results of its monitoring. Both the Fund's Chief Financial Officer and
management will immediately report to the chairman of the Audit Committee any
breach of this Policy that comes to the attention of the Fund's Chief Financial
Officer or any member of management.

     9. ADDITIONAL REQUIREMENTS

The Audit Committee has determined to take additional measures on an annual
basis to meet its responsibility to oversee the work of the Independent Auditors
and to assure the auditor's independence from the Fund, such as reviewing a
formal written statement from the Independent Auditors delineating all
relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.

     10. COVERED ENTITIES

Covered Entities include the Fund's investment adviser(s) and any entity
controlling, controlled by or under common control with the Fund's investment
adviser(s) that provides ongoing services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the Fund's
audit committee must pre-approve non-audit services provided not only to the
Fund but also to the Covered Entities if the engagements relate directly to the
operations and financial reporting of the Fund. This list of Covered Entities
would include:

         Morgan Stanley Retail Funds
         ---------------------------
         Morgan Stanley Investment Advisors Inc.
         Morgan Stanley & Co. Incorporated
         Morgan Stanley DW Inc.
         Morgan Stanley Investment Management Inc.
         Morgan Stanley Investment Management Limited
         Morgan Stanley Investment Management Private Limited
         Morgan Stanley Asset & Investment Trust Management Co., Limited
         Morgan Stanley Investment Management Company
         Van Kampen Asset Management
         Morgan Stanley Services Company, Inc.
         Morgan Stanley Distributors Inc.
         Morgan Stanley Trust FSB


                                       6


         Morgan Stanley Institutional Funds
         ----------------------------------
         Morgan Stanley Investment Management Inc.
         Morgan Stanley Investment Advisors Inc.
         Morgan Stanley Investment Management Limited
         Morgan Stanley Investment Management Private Limited
         Morgan Stanley Asset & Investment Trust Management Co., Limited
         Morgan Stanley Investment Management Company
         Morgan Stanley & Co. Incorporated
         Morgan Stanley Distribution, Inc.
         Morgan Stanley AIP GP LP
         Morgan Stanley Alternative Investment Partners LP


(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Registrant. 100% of such
services were pre-approved by the audit committee pursuant to the Audit
Committee's pre-approval policies and procedures (attached hereto).

(f) Not applicable.

(g) See table above.

(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.

Item 5. Audit Committee of Listed Registrants.

(a) The Fund has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:
Michael Bozic, Edwin J. Garn, Wayne E. Hedien, Manual H. Johnson, Joseph J.
Kearns, Michael Nugent and Fergus Reid.

(b) Not applicable.

Item 6. Schedule of Investments

Refer to Item 1.


                                       7


Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.

Item 8. Closed-End Fund Repurchases

Applicable to reports filed by closed-end funds.

Item 9. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 10 - Controls and Procedures

(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.

(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

Item 11 Exhibits

(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.

(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.

                                       8


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Tax-Exempt Securities Trust

/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
February 17, 2005

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.

/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
February 17, 2005

/s/ Francis Smith
Francis Smith
Principal Financial Officer
February 17, 2005



                                       9


                                                                    EXHIBIT 11 A


      CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
      --------------------------------------------------------------------
                           ADOPTED SEPTEMBER 28, 2004
                           --------------------------



I.   This Code of Ethics (the "Code") for the investment companies within the
     Morgan Stanley complex identified in Exhibit A (collectively, "Funds" and
     each, a "Fund") applies to each Fund's Principal Executive Officer,
     President, Principal Financial Officer and Treasurer (or persons performing
     similar functions) ("Covered Officers" each of whom are set forth in
     Exhibit B) for the purpose of promoting:

     o   honest and ethical conduct, including the ethical handling of actual or
         apparent conflicts of interest between personal and professional
         relationships.

     o   full, fair, accurate, timely and understandable disclosure in reports
         and documents that a company files with, or submits to, the Securities
         and Exchange Commission ("SEC") and in other public communications made
         by the Fund;

     o   compliance with applicable laws and governmental rules and regulations;

     o   prompt internal reporting of violations of the Code to an appropriate
         person or persons identified in the Code; and

     o   accountability for adherence to the Code.

         Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest. Any question about the application of
the Code should be referred to the General Counsel or his/her designee (who is
set forth in Exhibit C).

II.  COVERED OFFICERS SHOULD HANDLE ETHICALLY ACTUAL AND APPARENT CONFLICTS OF
     INTEREST

     OVERVIEW. A "conflict of interest" occurs when a Covered Officer's private
interest interferes, or appears to interfere, with the interests of, or his
service to, the Fund. For example, a conflict of interest would arise if a
Covered Officer, or a member of his family, receives improper personal benefits
as a result of his position with the Fund.

     Certain conflicts of interest arise out of the relationships between
Covered Officers and the Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 ("Investment Company Act") and
the Investment

                                       10


Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers
may not individually engage in certain transactions (such as the purchase or
sale of securities or other property) with the Fund because of their status as
"affiliated persons" (as defined in the Investment Company Act) of the Fund. The
Fund's and its investment adviser's compliance programs and procedures are
designed to prevent, or identify and correct, violations of these provisions.
This Code does not, and is not intended to, repeat or replace these programs and
procedures, and such conflicts fall outside the parameters of this Code, unless
or until the General Counsel determines that any violation of such programs and
procedures is also a violation of this Code.

     Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Fund and its investment adviser of which the Covered
Officers are also officers or employees. As a result, this Code recognizes that
the Covered Officers will, in the normal course of their duties (whether
formally for the Fund or for the investment adviser, or for both), be involved
in establishing policies and implementing decisions that will have different
effects on the Fund and its investment adviser. The participation of the Covered
Officers in such activities is inherent in the contractual relationship between
the Fund and the investment adviser and is consistent with the performance by
the Covered Officers of their duties as officers of the Fund. Thus, if performed
in conformity with the provisions of the Investment Company Act and the
Investment Advisers Act, such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Funds' Boards of
Directors/Trustees ("Boards") that the Covered Officers may also be officers or
employees of one or more other investment companies covered by this or other
codes.

     Other conflicts of interest are covered by the Code, even if such conflicts
of interest are not subject to provisions in the Investment Company Act and the
Investment Advisers Act. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should keep in mind that these
examples are not exhaustive. The overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the Fund.

     Each Covered Officer must not:

     o   use his personal influence or personal relationships improperly to
         influence investment decisions or financial reporting by the Fund
         whereby the Covered Officer would benefit personally (directly or
         indirectly);

     o   cause the Fund to take action, or fail to take action, for the
         individual personal benefit of the Covered Officer rather than the
         benefit of the Fund; or

     o   use material non-public knowledge of portfolio transactions made or
         contemplated for, or actions proposed to be taken by, the Fund to trade
         personally or cause others to trade personally in contemplation of the
         market effect of such transactions.


                                       11


     Each Covered Officer must, at the time of signing this Code, report to the
General Counsel all affiliations or significant business relationships outside
the Morgan Stanley complex and must update the report annually.

     Conflict of interest situations should always be approved by the General
Counsel and communicated to the relevant Fund or Fund's Board. Any activity or
relationship that would present such a conflict for a Covered Officer would
likely also present a conflict for the Covered Officer if an immediate member of
the Covered Officer's family living in the same household engages in such an
activity or has such a relationship. Examples of these include:

     o   service or significant business relationships as a director on the
         board of any public or private company;

     o   accepting directly or indirectly, anything of value, including gifts
         and gratuities in excess of $100 per year from any person or entity
         with which the Fund has current or prospective business dealings, not
         including occasional meals or tickets for theatre or sporting events or
         other similar entertainment; provided it is business-related,
         reasonable in cost, appropriate as to time and place, and not so
         frequent as to raise any question of impropriety;

     o   any ownership interest in, or any consulting or employment relationship
         with, any of the Fund's service providers, other than its investment
         adviser, principal underwriter, or any affiliated person thereof; and

     o   a direct or indirect financial interest in commissions, transaction
         charges or spreads paid by the Fund for effecting portfolio
         transactions or for selling or redeeming shares other than an interest
         arising from the Covered Officer's employment, such as compensation or
         equity ownership.

III. DISCLOSURE AND COMPLIANCE

     o   Each Covered Officer should familiarize himself/herself with the
         disclosure and compliance requirements generally applicable to the
         Funds;

     o   each Covered Officer must not knowingly misrepresent, or cause others
         to misrepresent, facts about the Fund to others, whether within or
         outside the Fund, including to the Fund's Directors/Trustees and
         auditors, or to governmental regulators and self-regulatory
         organizations;

     o   each Covered Officer should, to the extent appropriate within his area
         of responsibility, consult with other officers and employees of the
         Funds and their investment advisers with the goal of promoting full,
         fair, accurate, timely and understandable disclosure in the reports and
         documents the Funds file with, or submit to, the SEC and in other
         public communications made by the Funds; and

                                       12


     o   it is the responsibility of each Covered Officer to promote compliance
         with the standards and restrictions imposed by applicable laws, rules
         and regulations.

IV. REPORTING AND ACCOUNTABILITY

     Each Covered Officer must:

     o   upon adoption of the Code (thereafter as applicable, upon becoming a
         Covered Officer), affirm in writing to the Boards that he has received,
         read and understands the Code;

     o   annually thereafter affirm to the Boards that he has complied with the
         requirements of the Code;

     o   not retaliate against any other Covered Officer, other officer or any
         employee of the Funds or their affiliated persons for reports of
         potential violations that are made in good faith; and

     o   notify the General Counsel promptly if he/she knows or suspects of any
         violation of this Code. Failure to do so is itself a violation of this
         Code.

     The General Counsel is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority to
interpret this Code in any particular situation. However, any waivers(2) sought
by a Covered Officer must be considered by the Board of the relevant Fund or
Funds.

     The Funds will follow these procedures in investigating and enforcing this
Code:

     o   the General Counsel will take all appropriate action to investigate any
         potential violations reported to him;

     o   if, after such investigation, the General Counsel believes that no
         violation has occurred, the General Counsel is not required to take any
         further action;

     o   any matter that the General Counsel believes is a violation will be
         reported to the relevant Fund's Audit Committee;

     o   if the directors/trustees/managing general partners who are not
         "interested persons" as defined by the Investment Company Act (the
         "Independent Directors/Trustees/Managing General Partners") of the
         relevant Fund concur that a violation has occurred, they will consider
         appropriate action, which may include review of, and appropriate
         modifications to, applicable

- ------------------

(2)  Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of
     a material departure from a provision of the code of ethics."

                                       13


         policies and procedures; notification to appropriate personnel of the
         investment adviser or its board; or a recommendation to dismiss the
         Covered Officer or other appropriate disciplinary actions;

     o   the Independent Directors/Trustees/Managing General Partners of the
         relevant Fund will be responsible for granting waivers of this Code, as
         appropriate; and

     o   any changes to or waivers of this Code will, to the extent required, be
         disclosed as provided by SEC rules.

V. OTHER POLICIES AND PROCEDURES

     This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and
forms applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds, the Funds' investment advisers, principal
underwriters, or other service providers govern or purport to govern the
behavior or activities of the Covered Officers who are subject to this Code,
they are superseded by this Code to the extent that they overlap or conflict
with the provisions of this Code unless any provision of this Code conflicts
with any applicable federal or state law, in which case the requirements of such
law will govern. The Funds' and their investment advisers' and principal
underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act
and Morgan Stanley's Code of Ethics are separate requirements applying to the
Covered Officers and others, and are not part of this Code.

VI. AMENDMENTS

     Any amendments to this Code, other than amendments to Exhibits A, B or C,
must be approved or ratified by a majority vote of the Board of each Fund,
including a majority of Independent Directors/Trustees/Managing General
Partners.

VII. CONFIDENTIALITY

     All reports and records prepared or maintained pursuant to this Code will
be considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the Independent Directors/Trustees/Managing
General Partners of the relevant Fund or Funds and their counsel, the relevant
Fund or Funds and their counsel and the relevant investment adviser and its
counsel.


                                       14


VIII. INTERNAL USE

     The Code is intended solely for the internal use by the Funds and does not
constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion


I have read and understand the terms of the above Code. I recognize the
responsibilities and obligations incurred by me as a result of my being subject
to the Code. I hereby agree to abide by the above Code.


- -------------------------

Date:
     --------------------




                                       15


                                    EXHIBIT B
                                    ---------

                               INSTITUTIONAL FUNDS
                                COVERED OFFICERS
                                ----------------

                          Mitchell M. Merin - President
  Ronald E. Robison - Executive Vice President and Principal Executive Officer
            James W. Garrett - Chief Financial Officer and Treasurer

                                  RETAIL FUNDS
                                COVERED OFFICERS
                                ----------------

                          Mitchell M. Merin - President
  Ronald E. Robison - Executive Vice President and Principal Executive Officer
               Frank Smith - Chief Financial Officer and Treasurer




                                       16


                                    EXHIBIT C
                                    ---------

                                 GENERAL COUNSEL
                                 ---------------

                                   Barry Fink






                                       17


                                                                   EXHIBIT 11 B1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

                                 CERTIFICATIONS
                                 --------------

I, Ronald E. Robison, certify that:

1.   I have reviewed this report on Form N-CSR of Morgan Stanley Tax-Exempt
     Securities Trust;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods
     presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
     control over financial reporting (as defined in Rule 30a-3(d) under the
     Investment Company Act of 1940) for the registrant and have:

a)   designed such disclosure controls and procedures, or caused such disclosure
     controls and procedures to be designed under our supervision, to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

b)   designed such internal control over financial reporting, or caused such
     internal control over financial reporting to be designed under our
     supervision, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles;

c)   evaluated the effectiveness of the registrant's disclosure controls and
     procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of a date
     within 90 days prior to the filing date of this report based on such
     evaluation; and

d)   disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal half-year (the registrant's second fiscal half-year in the case of
     an annual report) that has materially affected, or is reasonably likely to
     materially affect, the registrant's internal control over financial
     reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):


                                       18


a)   all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize, and report financial information; and

b)   any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.

Date: February 17, 2005
                                                     /s/ Ronald E. Robison
                                                     Ronald E. Robison
                                                     Principal Executive Officer


                                       19


                                                                   EXHIBIT 11 B2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

                                 CERTIFICATIONS
                                 --------------

I, Francis Smith, certify that:

1.   I have reviewed this report on Form N-CSR of Morgan Stanley Tax-Exempt
     Securities Trust;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods
     presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) and internal
     control over financial reporting (as defined in Rule 30a-3(d) under the
     Investment Company Act of 1940) for the registrant and have:

a)   designed such disclosure controls and procedures, or caused such disclosure
     controls and procedures to be designed under our supervision, to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

b)   designed such internal control over financial reporting, or caused such
     internal control over financial reporting to be designed under our
     supervision, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles;

c)   evaluated the effectiveness of the registrant's disclosure controls and
     procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of a date
     within 90 days prior to the filing date of this report based on such
     evaluation; and

d)   disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal half-year (the registrant's second fiscal half-year in the case of
     an annual report) that has materially affected, or is reasonably likely to
     materially affect, the registrant's internal control over financial
     reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):


                                       20


a)   all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize, and report financial information; and

b)   any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.

Date: February 17, 2005
                                                  /s/ Francis Smith
                                                  Francis Smith
                                                  Principal Financial Officer


                                       21


                            SECTION 906 CERTIFICATION

                Certification Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Tax-Exempt Securities Trust

     In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended December 31, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Issuer.



Date: February 17, 2005                              /s/ Ronald E. Robison
                                                     ---------------------------
                                                     Ronald E. Robison
                                                     Principal Executive Officer


A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley Tax-Exempt Securities Trust and will be retained by
Morgan Stanley Tax-Exempt Securities Trust and furnished to the Securities and
Exchange Commission or its staff upon request.


                                       22


                            SECTION 906 CERTIFICATION

                Certification Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Tax-Exempt Securities Trust

     In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended December 31, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Issuer.



Date: February 17, 2005                              /s/ Francis Smith
                                                     ---------------------------
                                                     Francis Smith
                                                     Principal Financial Officer


A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley Tax-Exempt Securities Trust and will be retained by
Morgan Stanley Tax-Exempt Securities Trust and furnished to the Securities and
Exchange Commission or its staff upon request.


                                       23