No they wouldn't. It is not an lending trade. There is no credit risk in the transaction apart from failed settlement and these trades are usually only done on a deliver versus payment basis. Morgan Stanley don't care if Davy's want to buy shares for their own account or Joe Bloggs Account. The trade will still be between Davy and Morgan Stanley. All ISDA's and all other documention that allows these entities to trade will be in those names or related entites. Morgan Stanley doesn't care who the final beneficial owner of the shares are. It has no impact on the transaction at a street level.I do not agree with this 100%, in the trade flow example Sunny --> Davy --> Morgan Stanley, Davy would be acting on an Agent basis i.e. transacting on behalf of their client. Morgan Stanley would look at this differently to if Davy was doing a trade for themselves i.e to hedge their own risk. Ultimately though Morgan Stanley would view the risk differently 1 on an agent basis and 2 direct Davy exposure.