UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number: 811-07560 Morgan Stanley Quality Municipal Securities (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: October 31, 2006 Date of reporting period: January 31, 2006 ITEM 1. SCHEDULE OF INVESTMENTS. The Trust's schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows: MORGAN STANLEY QUALITY MUNICIPAL SECURITIES PORTFOLIO OF INVESTMENTS JANUARY 31, 2006 (unaudited) PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE --------- ------ -------- ------------ TAX-EXEMPT MUNICIPAL BONDS (136.5%) General Obligation (13.4%) California, $2,000 Various Purpose dtd 12/01/05 5.00% 03/01/27 $2,088,020 3,000 Various Purpose dtd 05/01/03 5.00 02/01/32 3,083,430 4,000 City & County of San Francisco, Laguna Honda Hospital 5.00 06/15/30 4,139,440 Ser 2005 I (FSA) 4,000 Honolulu City & County, Hawaii, ROLS RRII R 237-1 (MBIA) 7.356## 03/01/24 4,613,320 3,600 Chicago Park District, Illinois, Harbor Ser A (Ambac) 5.00 01/01/27 3,751,704 New York City, New York, 2,000 2006 Ser F 5.00 09/01/23 2,093,740 1,000 2005 Ser G 5.00 12/01/23 1,043,840 Pennsylvania, 1,000 RITES PA - 1112 A (MBIA) 6.203## 01/01/18 1,130,580 1,000 RITES PA - 1112 B (MBIA) 6.203## 01/01/19 1,163,040 2,000 Charleston County School District, South Carolina, Ser 2004 A 5.00 02/01/22 2,111,240 5,000 Metropolitan Government of Nashville & Davidson County, 5.125 05/15/25 5,132,350 ----- Tennessee, Refg Ser 1997 --------- 28,600 30,350,704 ------ ---------- Educational Facilities Revenue (5.5%) 4,000 Los Angeles, Community College District, California, 5.00 08/01/27 4,171,360 2003 Ser B (FSA) 2,000 New Jersey Educational Facilities Authority, Montclair State University 5.00 07/01/34 2,077,160 Ser 2003 L (MBIA) 4,000 North Carolina Capital Facilities Finance Agency, Duke University 5.00 10/01/41 4,144,040 Ser 2005 A 2,000 Charleston Educational Excellence Financing Corporation, South Carolina, 5.25 12/01/29 2,108,240 ----- Ser 2005 --------- 12,000 12,500,800 ------ ---------- Electric Revenue (13.1%) 3,890 Salt River Project Agricultural Improvement & Power District, 5.00 01/01/22 4,095,742 Arizona, 2002 Ser B 2,000 Orlando Utilities Commission, Florida, Ser 2001 A 5.25 10/01/19 2,162,120 2,500 Wyandotte County/Kansas City, Kansas, Ser 2004 B (FSA) 5.00 09/01/28 2,612,550 Nebraska Public Power District, 5,000 2003 Ser A (Ambac) 5.00 01/01/35 5,176,700 3,000 Ser 2005 C (FGIC) 5.00 01/01/41 3,107,880 2,000 North Carolina Municipal Power Agency #1, Catawba Ser 1993 5.25 01/01/20 2,157,840 (MBIA) 1,500 Puerto Rico Electric Power Authority, Ser NN 5.125 07/01/29 1,548,960 4,000 South Carolina Public Service Authority, Ser 2003 A (Ambac) 5.00 01/01/27 4,167,040 2,500 Intermountain Power Agency, Utah, 2003 Ser A (FSA) 5.00 07/01/21 2,641,075 1,755 Grant County Public Utility District #2, Washington, Wanapum 5.00 01/01/34 1,811,634 ----- Hydroelectric 2005 Ser A (FGIC) --------- 28,145 29,481,541 ------ ---------- Hospital Revenue (15.2%) 3,000 California Health Facilities Financing Authority, Cedars-Sinai Medical 5.00 11/15/34 3,038,970 Center Ser 2005 5,000 Colorado Health Facilities Authority, Catholic Health Initiatives 5.25 09/01/24 5,203,150 Ser 2001 A 3,000 Indiana Health & Educational Facilities Financing Authority, Clarian 5.25 02/15/40 3,082,650 Health Obligation Ser A 60 Maine Health & Higher Educational Facilities Authority, 5.50 07/01/18 60,473 Ser 1993 D (FSA) 2,000 Maryland Health & Higher Educational Facilities Authority, 5.25 07/01/34 2,056,500 University of Maryland Medical Ser 2001 4,000 Missouri Health & Educational Facilities Authority, 5.25 05/15/14 4,318,800 Barnes-Jewish /Christian Health Ser 1993 A 5,000 Cuyahoga County, Ohio, Cleveland Clinic Health Ser 2003 A 6.00 01/01/32 5,504,700 10,000 Fairfax County Industrial Development Authority, Virginia, Inova Health 5.25 08/15/19 10,961,800 ------ Refg Ser 1993 A ---------- 32,060 34,227,043 ------ ---------- Industrial Development/Pollution Control Revenue (13.6%) 10,000 Hawaii Department of Budget & Finance, Hawaiian Electric Co Inc 5.45 11/01/23 10,045,200 Ser 1993 (AMT) (MBIA) 4,000 Calvert County, Maryland, Baltimore Gas & Electric Co 5.55 07/15/14 4,050,800 Refg Ser 1993 2,000 Brazos River Authority, Texas, TXU Electric Co Ser 1999 C (AMT) 7.70 03/01/32 2,370,420 3,000 Sabine River Authority, Texas, TXU Electric Co Refg Ser 2001 B 5.75 05/01/30 3,177,000 (AMT) (Mandatory Tender 11/01/11) 1,000 Tobacco Settlement Financing Corporation, Virginia, Ser 2005 5.625 06/01/37 1,017,340 10,000 Weston, Wisconsin, Wisconsin Public Service Co Refg Ser 1993 A 6.90 02/01/13 10,126,400 ------ ---------- 30,000 30,787,160 ------ ---------- Mortgage Revenue - Single Family (1.0%) 2,120 Alaska Housing Finance Corporation, 1997 Ser A (MBIA) 6.00 06/01/27 2,191,847 ----- --------- Public Facilities Revenue (8.8%) 2,000 Jefferson County, Alabama, School Ser 2004 A 5.50 01/01/22 2,162,300 5,000 California Public Works Board, Mental Health 2004 Ser A 5.00 06/01/24 5,191,200 1,995 Miami-Dade County, Florida, Ser 2005 A (MBIA) 0.00++ 10/01/30 1,393,687 3,000 Miami-Dade County School Board, Florida, 2003 Ser D (FGIC) 5.00 08/01/29 3,109,080 1,500 Baltimore Convention Center, Maryland, Ser A (XLCA) (WI) 5.25 09/01/39 1,604,925 3,300 Newark Housing Authority, New Jersey, Port Authority-Port Newark 5.00 01/01/34 3,412,068 Marine Terminal Ser 2004 (MBIA) 3,000 Pennsylvania Public School Building Authority, Philadelphia School 5.00 06/01/33 3,095,460 ----- District Ser 2003 (FSA) --------- 19,795 19,968,720 ------ ---------- Recreational Facilities Revenue (2.3%) 8,480 Metropolitan Pier & Exposition Authority, Illinois, McCormick Place 0.00+++ 06/15/26 5,222,323 Ser 2002 A (MBIA) ---------- Resource Recovery Revenue (1.4%) 3,000 Northeast Maryland Waste Disposal Authority, Montgomery County 5.50 04/01/16 3,241,920 ----- Ser 2003 (AMT) (Ambac) --------- Tax Allocation Revenue (1.4%) 3,040 Milpitas Redevelopment Agency, California, Area #1 Ser 2003 5.00 09/01/22 3,185,373 ----- (MBIA) --------- Transportation Facilities Revenue (24.7%) Arizona Transportation Board, 1,000 Ser 2003 5.00 07/01/21 1,056,430 1,000 Ser 2003 5.00 07/01/22 1,054,080 3,150 Orange County Transportation Authority, California, Toll Road 5.00 08/15/18 3,367,602 Refg Ser 2003 A (Ambac) 5,000 Miami-Dade County, Florida, Miami Int'l Airport Ser 2000 A (AMT) 6.00 10/01/24 5,446,400 (FGIC) 5,000 Atlanta, Georgia, Airport Ser 2004 C (FSA) 5.00 01/01/33 5,153,900 Georgia Road & Tollway Authority, 2,000 Ser 2001 5.375 03/01/17 2,172,420 2,000 Ser 2004 5.00 10/01/22 2,118,900 3,000 Ser 2004 5.00 10/01/23 3,177,750 3,000 Hawaii, Airports Refg Ser 2000 B (AMT) (FGIC) 6.625 07/01/18 3,331,350 Chicago, Illinois, O'Hare Int'l Airport 3,000 Third Lien, Ser A 5.25 01/01/26 3,226,770 3,000 Passenger Fee Ser 2001 A (AMT) (Ambac) 5.375 01/01/32 3,097,800 3,000 Illinois Toll Highway Authority, Priority Refg 1998 Ser A (FSA) 5.50 01/01/15 3,364,470 4,000 Missouri Highways & Transportation Commission, Ser A 2001 5.125 02/01/18 4,269,800 3,000 Clark County, Nevada, Airport SubLien Ser 2004 A (AMT) (FGIC) 5.50 07/01/20 3,257,370 5,000 Metropolitan Transportation Authority, New York, Transportation 5.25 11/15/22 5,412,700 Ser 2003 B (MBIA) Triborough Bridge & Tunnel Authority, New York, 3,000 Refg Ser 2002 B 5.25 11/15/19 3,259,110 390 Ser 2001 A 5.00 01/01/32 399,508 1,500 Rhode Island Economic Development Corporation, Airport 5.00 07/01/21 1,549,350 Refg Ser 2004 A (AMT) (FSA) 1,000 Harris County, Texas, Toll Road Sr Lien Ser 2005 A (FSA) 5.25 08/15/35 1,039,190 ----- --------- 52,040 55,754,900 ------ ---------- Water & Sewer Revenue (25.8%) 5,000 Los Angeles Department of Water & Power, California, Water 5.00 07/01/23 5,264,650 2004 Ser C (MBIA) 4,240 San Diego County Water Authority, California, Ser 2004 A COPs 5.00 05/01/29 4,426,433 (FSA) De Kalb County, Georgia, 1,000 Water & Sewer Ser A 5.00 10/01/21 1,058,300 1,200 Water & Sewer Ser A 5.00 10/01/23 1,262,700 3,000 Fulton County, Georgia, Water & Sewerage Ser 2004 (FGIC) 5.25 01/01/35 3,192,510 4,000 Truckee Meadows Water Authority, Nevada, Ser 2001 A (FSA) 5.50 07/01/19 4,339,120 3,000 Manchester, New Hampshire, Water Works Ser 2003 (FGIC) 5.00 12/01/34 3,094,920 3,000 New York City Municipal Water Finance Authority, New York, 5.00 06/15/28 3,138,750 2005 Ser B (Ambac) 4,565 Grand Strand Water & Sewer Authority, South Carolina, 5.375 06/01/19 4,954,075 Refg Ser 2002 (FSA) Houston, Texas, 5,000 Water & Sewer Jr Lien Refg Ser 2001 A (FSA) 5.50 12/01/16 5,468,350 5,000 Combined Utility First Lien Refg 2004 Ser A (MBIA) 5.25 05/15/25 5,340,500 4,000 Tarrant County Regional Water District, Texas, Refg & Impr 5.25 03/01/17 4,317,160 Ser 2002 (FSA) 3,000 West Harris County Regional Water Authority, Texas, Water 5.00 12/15/24 3,143,250 Ser 2005 (FSA) 4,000 Norfolk, Virginia, Water Ser 1993 (Ambac) 5.375 11/01/23 4,006,080 Prince William County Service Authority, Virginia, 3,000 Water & Sewer Refg Ser 2003 5.00 07/01/19 3,216,330 2,000 Water & Sewer Refg Ser 2003 5.00 07/01/21 2,136,960 ----- --------- 55,005 58,360,088 ------ ---------- Other Revenue (6.7%) 5,000 California, Economic Recovery, Ser 2004 A 5.00 07/01/16 5,359,350 3,000 New Jersey Economic Development Authority, Cigarette Tax Ser 2004 # 5.75 06/15/29 3,167,940 6,000 Tobacco Settlement Financing Corporation, New York, State 5.50 06/01/21 6,584,760 Contingency Ser 2003 C-1 ------ ---------- 14,000 15,112,050 ------ ---------- Refunded (3.6%) 2,000 California Department of Water Resources, Power Supply 5.375 05/01/12+ 2,220,700 Ser 2002 A (XLCA) 5,000 South Carolina Jobs - Economic Development Authority, Palmetto 6.875 08/01/13+ 5,932,943 Health Alliance Refg Ser 2003 C ----- --------- 7,000 8,153,643 ----- --------- 295,285 TOTAL TAX-EXEMPT MUNICIPAL BONDS (Cost $295,359,362) 308,538,112 ------- ----------- SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (5.6%) 3,500 Indiana Health Facility Financing Authority, Clarian Health 3.09* 03/01/30 3,500,000 Ser 2000 B (Demand 02/01/06) New York City Municipal Water Finance Authority, 6,400 2000 Ser C (Demand 02/01/06) 3.05* 06/15/33 6,400,000 1,375 2000 Ser F, Subser F-2 (Demand 02/01/06) 3.05* 06/15/35 1,375,000 1,400 Philadelphia Hospitals & Higher Education Facilities Authority, 3.05* 07/01/22 1,400,000 ----- Pennsylvania, Children's Hospital of Philadelphia Ser 2002 A --------- (Demand 02/01/06) 12,675 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (Cost $12,675,000) 12,675,000 ------ ---------- $307,960 TOTAL INVESTMENTS (Cost $308,034,362) (a) (b) 142.1% 321,213,112 ======== OTHER ASSETS IN EXCESS OF LIABILITIES 0.9 1,933,134 PREFERRED SHARES OF BENEFICIAL INTEREST (43.0) (97,073,187) ------ ------------ NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 100.0% $226,073,059 ====== ============ ------------- Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders. AMT Alternative Minimum Tax. COPs Certificates of Participation. RITES Residual Interest Tax-Exempt Securities (Illiquid securities). ROLS Reset Option Longs (Illiquid securities). WI Security purchased on a when-issued basis. # A portion of this security has been physically segregated in connection with open futures contracts in the amount of $53,000. ## 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 total value of $6,906,940 which represents 3.1% of net assets applicable to common shareholders. + Prerefunded to call date shown. ++ Currently a zero coupon security; will convert to 5.00% on October 1, 2013. +++ Currently a zero coupon security; will convert to 5.75% on June 15, 2017. * Current coupon of variable rate demand obligation. (a) Securities have been designated as collateral in an amount equal to $14,329,666 in connection with open futures contracts and the purchase of a when-issued security. (b) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $13,384,086 and the aggregate gross unrealized depreciation is $205,336, resulting in net unrealized appreciation of $13,178,750. Bond Insurance: ---------------- Ambac Ambac Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation. XLCA XL Capital Assurance Inc. FUTURES CONTRACTS OPEN AT JANUARY 31, 2006: DESCRIPTION, UNDERLYING NUMBER OF DELIVERY MONTH FACE AMOUNT UNREALIZED CONTRACTS LONG/SHORT AND YEAR AT VALUE APPRECIATION --------- ---------- --------------------------- ------------- ------------ 100 Short U.S. Treasury Notes 5 Year, March 2006 $(10,573,438) $36,443 20 Short U.S. Treasury Notes 10 Year, March 2006 (2,168,750) 8,695 ------------ Total unrealized appreciation....... $45,138 ============ GEOGRAPHIC SUMMARY OF INVESTMENTS BASED ON MARKET VALUE AS A PERCENT OF TOTAL INVESTMENTS Alabama 0.7% Alaska 0.7 Arizona 1.9 California 14.2 Colorado 1.6 Florida 3.8 Georgia 5.6 Hawaii 5.6 Illinois 5.8 Indiana 2.1 Kansas 0.8 Maine 0.1 Maryland 3.4 Missouri 2.7 Nebraska 2.6 Nevada 2.4 New Hampshire 1.0 New Jersey 2.7 New York 9.2 North Carolina 1.9 Ohio 1.7 Pennsylvania 2.1 Puerto Rico 0.5 Rhode Island 0.5 South Carolina 6.0 Tennessee 1.6 Texas 7.7 Utah 0.8 Virginia 6.6 Washington 0.6 Wisconsin 3.1 --- Total+ 100.0% ====== ---------- + Does not include open short futures contracts with an underlying face amount of $12,742,188 with unrealized appreciation of $45,138. ITEM 2. CONTROLS AND PROCEDURES. (a) The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust in this Form N-Q 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 Trust's internal control over financial reporting that occurred during the registrant's fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting. ITEM 3. EXHIBITS. (a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto. 2 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 Quality Municipal Securities /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer March 23, 2006 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 March 23, 2006 /s/ Francis Smith Francis Smith Principal Financial Officer March 23, 2006 3 EXHIBIT 3 A1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Securities; 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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) 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) 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) Omitted; (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 quarter 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): (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 control over financial reporting. Date: March 23, 2006 /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer 4 EXHIBIT 3 A2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Francis Smith, certify that: 1. I have reviewed this report on Form N-Q of Morgan Stanley Quality Municipal Securities; 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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) 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) 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) Omitted; (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 quarter 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): (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 control over financial reporting. 5 Date: March 23, 2006 /s/ Francis Smith Francis Smith Principal Financial Officer