[ by Melanie Gretchen ] Morgan Stanley's takeover of Morgan Stanley Smith Barney (MMSB) will get 14% closer this summer, people familiar with the situation said.  However, don't expect any progress beyond that, amid volatile markets, sagging stock prices, heightened regulatory scrutiny, and a pending credit-rating downgrade by Moody's Investors Service. Progress Report. Currently, Morgan Stanley owns 51% of the brokerage unit, while Citi owns 49%.  According to the brokerage joint venture agreement in 2009, Morgan Stanley has the right to take full control of the unit in increments between 2012 and 2014.  Yet, although Morgan Stanley formally gains the right to boost its stake to 65% on June 1, the two companies haven't begun discussions of the next stage of Morgan Stanley's gradual takeover, these people said.  In April, Morgan Stanley CEO James Gorman told analysts that "we feel no particular compulsion or anxiety to accelerate" a timetable that gives Morgan Stanley "a pretty clear path over…two years to buy the remaining pieces." For further details, go to [WSJ, 5/14/12].