July
2019
Preliminary
Terms No. 2,268
Registration Statement Nos. 333-221595; 333-221595-01
Dated July 17, 2019
Filed pursuant to Rule 433
M
organ
S
tanley
F
inance
LLC
STRUCTURED INVESTMENTS
Opportunities in U.S. Equities
Buffered PLUS Based on the Value of the Worst
Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Fully
and Unconditionally Guaranteed by Morgan Stanley
Principal
at Risk Securities
The Buffered PLUS offered are unsecured
obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley.
The Buffered PLUS will pay no interest, provide a minimum payment at maturity of only 12% of the stated principal amount and have
the terms described in the accompanying product supplement for PLUS, index supplement and prospectus, as supplemented or modified
by this document. The payment at maturity on the Buffered PLUS will be based on the value of the worst performing of the S&P
500
®
Index and the Russell 2000
®
Index, which we refer to as the underlying indices. The initial
average index value for each underlying index will be equal to the arithmetic average of the respective index closing value on
each of the initial averaging dates. The final average index value for each underlying index, which will be used to determine
the worst performing underlying index and to calculate the payment at maturity, will be equal to the arithmetic average of the
respective index closing value on each of the final averaging dates, as further described below. At maturity, if the final average
index values of
both
underlying indices are
greater than or equal to
98% of their respective initial average index
values, which we refer to as the respective upside threshold values, investors will receive a payment at maturity equal to $10.85
per $10 stated principal amount plus an additional return of 1.6375% for each 1.00% by which the final average index value of
the worst performing underlying index exceeds its respective upside threshold value, subject to the maximum payment at maturity.
If the final average index value of
either
underlying index is less than its respective upside threshold value but the
final average index values of
both
underlying indices are
greater than or equal to
their respective downside threshold
values, each of which is equal to 88% of the respective initial average index value, investors will receive a payment at maturity
equal to the stated principal amount of their investment plus a return of 0.85% for each 1.00% of the initial average index value
by which the final average index value of the worst performing underlying index exceeds its respective downside threshold value.
However, if
either
underlying index has declined to below its respective downside threshold value, investors will lose
1% for every 1% decline beyond the specified buffer amount, subject to the minimum payment at maturity of 12% of the stated principal
amount. Investors may lose up to 88% of the stated principal amount of the Buffered PLUS. Because the payment at maturity of the
Buffered PLUS is based on the worst performing of the underlying indices, a decline in
either
underlying index below its
respective downside threshold value will result in a loss of some or a significant portion of your investment, even if the other
underlying index has appreciated or has not declined as much. The Buffered PLUS are for investors who seek an equity index-based
return and who are willing to risk their principal, risk exposure to the worst performing of two underlying indices and forgo
current income and upside above the maximum payment at maturity in exchange for the upside leverage and buffer features that in
each case apply to a limited range of performance of the underlying indices. The Buffered PLUS are notes issued as part of MSFL’s
Series A Global Medium-Term Notes program.
All payments are subject to
our credit risk. If we default on our obligations, you could lose some or all of your investment. These Buffered PLUS are not
secured obligations and you will not have any security interest in, or otherwise have any access to, any underlying reference
asset or assets.
SUMMARY TERMS
|
Issuer:
|
Morgan Stanley Finance LLC
|
Guarantor:
|
Morgan Stanley
|
Maturity date:
|
June 11, 2024
|
Underlying indices:
|
S&P 500
®
Index (the “SPX Index”) and Russell 2000
®
Index (the “RTY Index”)
|
Aggregate principal amount:
|
$
|
Payment at maturity per Buffered
PLUS:
|
If the final average index
value of
each underlying index
is
greater than or equal to
its respective upside threshold value,
$10.85 + [$10
x (index upside strike return of the worst performing underlying index x 163.75%)]
In no event
will the payment at maturity exceed the maximum payment at maturity.
If the final average index
value of
either
underlying index is less than its respective upside threshold value but the final average index
value of
each underlying index
is
greater than or equal to
its respective downside threshold value,
$10 + [$10 ×
(index strike return of the worst performing underlying index × 85%)]
If the final average index
value of
either underlying index
is
less than
its respective downside threshold value, meaning the value
of
either
underlying index has declined by more than the buffer amount of 12% from its respective initial average
index value to its respective final average index value:
$10 x (index
performance factor of the worst performing underlying index + 12%)
Because the index performance
factor of the worst performing underlying index will be less than -12% in this scenario, the payment at maturity will
be less, and potentially significantly less, than the stated principal amount of $10, subject to the minimum payment at
maturity of $1.20 per Buffered PLUS.
|
Maximum payment at maturity:
|
$17.40 per Buffered PLUS (174% of the stated principal amount)
|
Index upside strike return:
|
With respect to each underlying index, (final average index value – upside
threshold value) / initial average index value
|
Index strike return:
|
With respect to each underlying index, (final average index value – downside
threshold value) / initial average index value
|
Worst performing underlying index:
|
The underlying index with the lesser index performance
factor
|
Index performance factor
|
With respect to each underlying index, final average index value / initial average
index value
|
Initial average index value:
|
With respect to the SPX
Index, the arithmetic average of the index closing value of such index on each of the initial averaging dates
With respect to the RTY
Index, the arithmetic average of the index closing value of such index on each of the initial averaging dates
|
Initial averaging dates:
|
With respect to each underlying index, each index business day on which there
is no market disruption event with respect to such underlying index during the approximately 3-month period from and including
July 22, 2019 to and including October 21, 2019.
|
Final average index value:
|
With respect to each underlying index, the arithmetic average of the index closing
value of such index on each of the final averaging dates
|
Final averaging dates:
|
With respect to each underlying index, each index business day on which there
is no market disruption event with respect to such underlying index during the approximately 3-month period from and including
March 8, 2024 to and including June 6, 2024.
|
Buffer amount:
|
12%
|
Minimum payment at maturity
|
$1.20 per Buffered PLUS
|
Upside threshold value:
|
With respect to the SPX
Index, 98% of the initial average index value of such index
With respect to the RTY
Index, 98% of the initial average index value of such index
|
Downside threshold value:
|
With respect to the SPX
Index, 88% of the initial average index value of such index
With respect to the RTY
Index, 88% of the initial average index value of such index
|
Stated principal amount /
Issue price:
|
$10 per Buffered PLUS (see “Commissions and issue price” below)
|
Pricing date:
|
July 22, 2019
|
Original issue date:
|
July 25, 2019 (3 business days after the pricing date)
|
CUSIP / ISIN:
|
61769Q345 / US61769Q3450
|
Listing:
|
The Buffered PLUS will not be listed on any securities exchange.
|
Agent:
|
Morgan Stanley & Co. LLC (“MS & Co.”), an affiliate of MSFL
and a wholly owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution;
conflicts of interest.”
|
Estimated value on the pricing date:
|
Approximately $9.763 per Buffered PLUS, or within $0.20 of that estimate. See
“Investment Summary” beginning on page 2.
|
Commissions and
issue price:
|
Price to public
|
Agent’s commissions
and fees
|
Proceeds to us
(3)
|
Per
Buffered PLUS
|
$10
|
$0.05
(1)
|
|
|
|
$0.05
(2)
|
$9.90
|
Total
|
$
|
$
|
$
|
|
(1)
|
Selected dealers, including
Morgan Stanley Wealth Management (an affiliate of the agent), and their financial advisors
will collectively receive from the agent, MS & Co., a fixed sales commission of $0.05
for each Buffered PLUS they sell. See "Supplemental information regarding plan of
distribution; conflicts of interest." For additional information, see "Plan
of Distribution (Conflicts of Interest)" in the accompanying product supplement
for PLUS.
|
|
(2)
|
Reflects a structuring fee
payable to Morgan Stanley Wealth Management by the agent or its affiliates of $0.05 for each Buffered PLUS.
|
|
(3)
|
See “Use of proceeds
and hedging” on page 19.
|
The Buffered PLUS involve
risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 8.
The Securities and Exchange
Commission and state securities regulators have not approved or disapproved these securities, or determined if this document or
the accompanying product supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The Buffered PLUS are not
deposits or savings accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency
or instrumentality, nor are they obligations of, or guaranteed by, a bank.
You should read this document
together with the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks
below. Please also see “Additional Terms of the Buffered PLUS” and “Additional Information About the Buffered
PLUS” at the end of this document.
As used in
this document, “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and
MSFL collectively, as the context requires.
Product Supplement for PLUS dated November 16, 2017
Index Supplement dated November 16, 2017
Prospectus dated November 16, 2017
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Investment Summary
The Buffered PLUS Based on the Value of the Worst Performing
of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024 (the “Buffered PLUS”)
can be used:
|
§
|
As an alternative to direct exposure to the underlying indices that enhances returns for a certain
range of performance of the worst performing underlying index if the final average index value of each underlying index is greater
than or equal to its respective upside threshold value value or its respective downside threshold value, as applicable, subject
to the maximum payment at maturity
|
|
§
|
To potentially obtain upside exposure to the worst performing of the S&P 500
®
Index and the Russell 2000
®
Index in a moderately bullish or moderately bearish environment
|
|
§
|
To obtain a buffer against a specified level of negative performance in the worst performing
underlying index.
|
Maturity:
|
Approximately 4 years and 11 months
|
Maximum payment at maturity:
|
$17.40 per Buffered PLUS (174% of the stated principal amount)
|
Buffer amount:
|
12%, with 1-to-1 downside exposure below the buffer
|
Minimum payment at maturity:
|
$1.20 per Buffered PLUS (12% of the stated principal amount). Investors may lose up to 88% of the stated principal amount of the Buffered PLUS.
|
Coupon:
|
None
|
The original issue price of each Buffered PLUS
is $10. This price includes costs associated with issuing, selling, structuring and hedging the Buffered PLUS, which are borne
by you, and, consequently, the estimated value of the Buffered PLUS on the pricing date will be less than $10. We estimate that
the value of each Buffered PLUS on the pricing date will be approximately $9.763, or within $0.20 of that estimate. Our estimate
of the value of the Buffered PLUS as determined on the pricing date will be set forth in the final pricing supplement.
What goes into the estimated value on the pricing date?
In valuing the Buffered PLUS on the pricing
date, we take into account that the Buffered PLUS comprise both a debt component and a performance-based component linked to the
underlying indices. The estimated value of the Buffered PLUS is determined using our own pricing and valuation models, market inputs
and assumptions relating to the underlying indices, instruments based on the underlying indices, volatility and other factors including
current and expected interest rates, as well as an interest rate related to our secondary market credit spread, which is the implied
interest rate at which our conventional fixed rate debt trades in the secondary market.
What determines the economic terms of the Buffered PLUS?
In determining the economic terms of the Buffered
PLUS, including the maximum payment at maturity, the upside threshold values and the downside threshold values, we use an internal
funding rate, which is likely to be lower than our secondary market credit spreads and therefore advantageous to us. If the issuing,
selling, structuring and hedging costs borne by you were lower or if the internal funding rate were higher, one or more of the
economic terms of the Buffered PLUS would be more favorable to you.
What is the relationship between the estimated value on the
pricing date and the secondary market price of the Buffered PLUS?
The price at which MS & Co. purchases the
Buffered PLUS in the secondary market, absent changes in market conditions, including those related to the underlying indices,
may vary from, and be lower than, the estimated value on the pricing date, because the secondary market price takes into account
our secondary market credit spread as well as the bid-offer spread that MS & Co. would charge in a secondary market transaction
of this type and other factors. However, because the costs associated with issuing, selling, structuring and hedging the Buffered
PLUS are not fully deducted upon issuance, for a period of up to 6 months following the issue date, to the extent that MS &
Co. may buy or sell the Buffered PLUS in the
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
secondary market, absent changes in market
conditions, including those related to the underlying indices, and to our secondary market credit spreads, it would do so based
on values higher than the estimated value. We expect that those higher values will also be reflected in your brokerage account
statements.
MS & Co. may, but is not obligated to,
make a market in the Buffered PLUS, and, if it once chooses to make a market, may cease doing so at any time.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Key Investment Rationale
The Buffered PLUS offer upside exposure to the worst performing
of the S&P 500
®
Index and the Russell 2000
®
Index to the extent that the final average index
value of such index is greater than its respective upside threshold value or its respective downside threshold value, as applicable,
subject to the maximum payment at maturity. The initial average index value for each underlying index will be equal to the arithmetic
average of the respective index closing value on each of the initial averaging dates. The final average index value for each underlying
index, which will be used to determine the worst performing underlying index and to calculate the payment at maturity, will be
equal to the arithmetic average of the index closing value on each of the final averaging dates. At maturity, if the final average
index values of both underlying indices are greater than or equal to their respective upside threshold values, investors will receive
a payment at maturity equal to $10.85 per $10 stated principal amount plus an additional return of 1.6375% for each 1.00% by which
the final average index value of the worst performing underlying index exceeds its respective upside threshold value, subject to
the maximum payment at maturity. If the final average index value of
either
underlying index is less than its respective
upside threshold value but the final average index values of
both
underlying indices are
greater than or equal to
their respective downside threshold values, each of which is equal to 88% of the respective initial average index value, investors
will receive a payment at maturity equal to the stated principal amount of their investment plus a return of 0.85% for each 1.00%
of the initial average index value by which the final average index value of the worst performing underlying index exceeds its
respective downside threshold value. However, if either of the underlying indices depreciates in value beyond its respective downside
threshold value, the investor will lose 1% for every 1% decline beyond the specified buffer amount, subject to the minimum payment
at maturity.
Investors may lose up to 88% of the stated principal amount of the Buffered PLUS.
Upside Scenario 1:
Leveraged Performance Up to a Cap
|
The final average index values of
both
underlying indices are
greater than
their respective
upside threshold values
and, at maturity, the Buffered PLUS redeem for $10.85 per $10 stated principal amount plus an additional return of 1.6375% for each 1.00% by which the final average index value of the worst performing underlying index exceeds its respective upside threshold value, subject to the maximum payment at maturity of $17.40 per Buffered PLUS (174% of the stated principal amount).
|
Upside Scenario 2:
Upside Performance Within a Specified Range
|
The final average index values of
both
underlying indices are
less than
their respective
upside threshold values
but
greater than
their respective
downside threshold values
and, at maturity, the Buffered PLUS redeem for the stated principal amount of $10 plus a return of 0.85% for each 1.00% of the initial average index value by which the final average index value of the worst performing underlying index exceeds its respective downside threshold value.
|
Downside Scenario
|
Either
underlying index
declines in value by more than 12%, and the Buffered PLUS redeem for less than the stated principal amount, by an amount that is
proprotionate to the percentage decrease of the worst performing underlying index from its respective initial
average
index
value, plus the buffer amount of 12%. (Example: if the worst performing underlying index decreases in value by 35%, the Buffered
PLUS will redeem for $7.70, or 77% of the stated principal amount.) The minimum payment at maturity is $1.20 per Buffered PLUS.
Because the payment at maturity of the Buffered PLUS is based
on the worst performing of the underlying indices, a decline in
either
underlying index below its respective downside threshold
value will result in a loss of some or a significant portion of your investment, even if the other underlying index has appreciated
or has not declined as much. You could lose up to 88% of your investment.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Hypothetical Examples
The following hypothetical examples illustrate how to calculate
the payment at maturity on the Buffered PLUS. The following examples are for illustrative purposes only. The actual initial average
index value, upside threshold value and downside threshold value for each underlying index will be determined after the last initial
averaging date. The payment at maturity on the Buffered PLUS is subject to our credit risk. The below examples are based on the
following terms:
Stated principal amount:
|
$10 per Buffered PLUS
|
Maximum payment at maturity:
|
$17.40 per Buffered PLUS (174% of the stated principal amount)
|
Hypothetical initial average index value:
|
With respect to the SPX Index: 2,500
With respect to the RTY Index: 1,200
|
Hypothetical upside threshold value:
|
With respect to the SPX Index: 2,450, 98% of the respective hypothetical
initial average index value
With respect to the RTY Index: 1,176, 98% of the respective hypothetical
initial average index value
|
Hypothetical downside threshold value:
|
With respect to the SPX Index: 2,200, 88% of the respective hypothetical
initial average index value
With respect to the RTY Index: 1,056, 88% of the respective hypothetical
initial average index value
|
Buffer amount:
|
12%
|
Minimum payment at maturity:
|
$1.20 per Buffered PLUS
|
EXAMPLE 1: Both underlying indices appreciate significantly
and so investors receive only the maximum payment at maturity.
Final average index value
|
|
SPX Index: 4,750
|
|
|
|
RTY Index: 2,160
|
Index upside strike return
|
|
SPX Index: (4,750 – 2,450) / 2,500 = 92%
RTY Index: (2,160 – 1,176) / 1,200 = 82%
|
Payment at maturity
|
=
|
$10.85 + [$10 x (index upside strike return of the worst performing underlying index x 163.75%)], subject to the maximum payment at maturity
|
|
=
|
$10.85 + [$10 × (82% × 163.75%)], subject to the maximum payment at maturity
|
|
=
|
maximum payment at maturity of $17.40 per Buffered PLUS
|
In example 1, the final average index values of both the SPX
Index and the RTY Index are significantly greater than their respective upside threshold values. The SPX Index has an index upside
strike return of 92%, while the RTY Index has an index upside strike return of 82%. Therefore, investors receive at maturity $10.85
per $10 stated principal amount
plus
an additional return of 163.75% of the index upside strike return of the worst performing
underlying index, subject to the maximum payment at maturity of $17.40 per Buffered PLUS. Under the terms of the Buffered PLUS,
investors will realize the maximum payment at maturity at a final average index value of the worst performing underlying index
of 138% of its respective initial average index value. Therefore, in this example, investors receive only the maximum payment at
maturity of $17.40 per stated principal amount, even though both underlying indices have appreciated significantly.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
EXAMPLE 2
:
The final average index values of both underlying
indices are greater than or equal to their respective upside threshold values, and investors receive $10.85 per $10 stated principal
amount
plus
an additional return of 1.6375% for each 1.00% by which the final average index value of the worst performing
underlying index exceeds its respective upside threshold value, calculated based on the index upside strike return of the worst
performing underlying index.
Final average index value
|
|
SPX Index: 2,700
|
|
|
RTY Index: 1,680
|
Index upside strike return
|
|
SPX Index: (2,700 – 2,450) / 2,500 = 10%
RTY Index: (1,680 – 1,176) / 1,200 = 42%
|
Payment at maturity
|
=
|
$10.85 + [$10 x (index upside strike return of the worst performing underlying index x 163.75%)], subject to the maximum payment at maturity
|
|
=
|
$10.85 + [$10 × (10% × 163.75%)], subject to the maximum payment at maturity
|
|
=
|
$12.4875
|
In example 2, the final average index values of both the SPX
Index and the RTY Index are greater than their respective upside threshold values. The SPX Index has an index upside strike return
of 10%, while the RTY Index has an index upside strike return of 42%. Therefore, investors receive at maturity $10.85 per $10 stated
principal amount plus an additional return of 163.75% of the index upside strike return of the worst performing underlying index,
which is the SPX Index in this example. Investors receive $12.4875 per Buffered PLUS at maturity.
EXAMPLE 3: The final average index value of either underlying
index is less than its respective upside threshold value but the final average index values of both underlying indices are greater
than or equal to their respective downside threshold values, and investors receive the stated principal amount of their investment
plus a return of 0.85% for each 1.00% of the initial average index value by which the final average index value of the worst performing
underlying index exceeds its respective downside threshold value, calculated based on the index strike return of the worst performing
underlying index.
Final average index value
|
|
SPX Index: 2,375
|
|
|
RTY Index: 1,080
|
Index upside strike return
|
|
SPX Index: (2,375 – 2,450) / 2,500 = -3%
RTY Index: (1,080 – 1,176) / 1,200 = -8%
|
Index strike return
|
|
SPX Index: (2,375 – 2,200) / 2,500 = 7%
RTY Index: (1,080 – 1,056) / 1,200 = 2%
|
Payment at maturity
|
=
|
$10 + [$10 × (index strike return of the worst performing underlying index × 85%)]
|
|
=
|
$10 + [$10 × (2% × 85%)]
|
|
=
|
$10.17
|
In example 3, the final average index values of both the SPX
Index and the RTY Index are less than their respective upside threshold values but greater than their respective downside threshold
values. The SPX Index has an index strike return of 7%, while the RTY Index has an index strike return of 2%. Therefore, investors
receive at maturity the stated principal amount plus a return of 85% of the index strike return of the worst performing underlying
index, which is the RTY Index in this example. Investors receive $10.17 per Buffered PLUS at maturity.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
EXAMPLE 4: One underlying index appreciates while the other
declines over the term of the Buffered PLUS, and the final average index value of the worst performing underlying index is less
than its respective downside threshold value. Investors are therefore exposed to the negative performance of the worst performing
underlying index, and will lose 1% for every 1% decline beyond the buffer amount of 12%.
Final average index value
|
|
SPX Index: 3,000
|
|
|
RTY Index: 480
|
Index performance factor
|
|
SPX Index: 3,000 / 2,500 = 120%
RTY Index: 480 / 1,200 = 40%
|
Payment at maturity
|
=
|
$10 × (index performance factor of the worst performing index + 12%)
|
|
=
|
$10 x (40% + 12%)
|
|
=
|
$5.20
|
In example 4, the final average index value of the SPX Index
is greater than its downside threshold value, while the final average index value of the RTY Index has declined below its downside
threshold value. The SPX Index has appreciated while the RTY Index has depreciated by 60%. Under these circumstances, investors
will receive an amount that is less than the stated principal amount by an amount that is proportionate to the percentage decrease
of the value of the worst performing underlying index from its initial average index value,
plus
the buffer amount of 12%.
In this example, investors receive a payment at maturity equal to $5.20 per Buffered PLUS, resulting in a loss of 48%.
EXAMPLE 5
:
Both underlying indices decline below their
respective downside threshold values, and investors are therefore exposed to the negative performance of the worst performing underlying
index, and will lose 1% for every 1% decline beyond the buffer amount of 12%.
Final average index value
|
|
SPX Index: 750
|
|
|
RTY Index: 480
|
Index performance factor
|
|
SPX Index: 750 / 2,500 = 30%
RTY Index: 480 / 1,200 = 40%
|
Payment at maturity
|
=
|
$10 × (index performance factor of the worst performing index + 12%)
|
|
=
|
$10 × (30% + 12%)
|
|
=
|
$4.20
|
In example 5, the final average index values of both the SPX
Index and the RTY Index are less than their respective downside threshold values. The SPX Index has declined by 70% while the RTY
Index has declined by 60%. Therefore, investors are exposed to the negative performance of the SPX Index, which is the worst performing
underlying index in this example. Investors receive a payment at maturity of $4.20 per Buffered PLUS, resulting in a loss of 58%.
Because the payment at maturity of the Buffered PLUS is based
on the worst performing of the underlying indices, a decline in either underlying index below its respective downside threshold
value will result in a loss of some or a significant portion of your investment, even if the other underlying index has appreciated
or has not declined as much
.
You could lose up to 88% of your investment in the Buffered PLUS.
In addition, the initial average index value for each underlying
index will be equal to the arithmetic average of the respective index closing value on each of the initial averaging dates, and
the final average index value for each underlying index, which will be used to determine the worst performing underlying index
and to calculate the payment at maturity, will be equal to the arithmetic average of the index closing value on each of the final
averaging dates. See “Risk Factors—“
You will not know the initial average
index value for either underlying index on the pricing date; the value of either underlying index on one or more initial averaging
dates may adversely affect the relevant initial average index value” and “
The amount payable on the Buffered
PLUS is based on the arithmetic average of the closing values of the underlying indices on each of the final averaging dates during
the approximately 3-month period from and including March 8, 2024 to and including June 6, 2024, and therefore the payment at maturity
may be less than if it were based solely on the closing values on the last final averaging date.”
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Risk Factors
The following is a non-exhaustive list of certain key risk
factors for investors in the Buffered PLUS. For further discussion of these and other risks, you should read the section entitled
“Risk Factors” in the accompanying product supplement for PLUS, index supplement and prospectus. We also urge you to
consult your investment, legal, tax, accounting and other advisers in connection with your investment in the Buffered PLUS.
|
§
|
The Buffered PLUS do not pay interest and provide a minimum payment
at maturity of only 12% of your principal.
The terms of the Buffered PLUS differ from those of ordinary debt securities
in that the Buffered PLUS do not pay interest, and provide a minimum payment at maturity of only 12% of the principal amount at
maturity. At maturity, you will receive for each $10 stated principal amount of Buffered PLUS that you hold an amount in cash based
upon the final average index value of each underlying index. The initial average index value for each underlying index will be
equal to the arithmetic average of the respective index closing value on each of the initial averaging dates. The final average
index value for each underlying index, which will be used to determine the worst performing underlying index and to calculate the
payment at maturity, will be equal to the arithmetic average of the index closing value on each of the final averaging dates. If
the final average index value of
either
underlying index is less than 88% of its respective initial average index value,
you will receive for each Buffered PLUS that you hold a payment at maturity that is less than the stated principal amount of each
Buffered PLUS by an amount proportionate to the decline in the closing value of the worst performing underlying index from its
initial average index value, plus $1.20 per Buffered PLUS.
Accordingly, investors may lose up to 88% of the stated principal
amount of the Buffered PLUS.
|
|
§
|
The appreciation potential of the Buffered PLUS is limited by the maximum payment at maturity.
The appreciation potential
of the Buffered PLUS is limited by the maximum payment at maturity of $17.40 per Buffered PLUS, or 174% of the stated principal
amount. Although the Buffered PLUS provide leveraged upside returns if the final average index value of each underlying index is
above its respective upside threshold value, because the payment at maturity will be limited to 174% of the stated principal amount
for the Buffered PLUS, any increase in the final average index value of the worst performing underlying index over its initial
average index value by more than 38% of its initial average index value will not further increase the return on the Buffered PLUS.
|
|
§
|
You are exposed to the price risk of both underlying indices.
Your return on the Buffered PLUS is not linked to a basket
consisting of both underlying indices. Rather, it will be based upon the independent performance of each underlying index. Unlike
an instrument with a return linked to a basket of underlying assets, in which risk is mitigated and diversified among all the components
of the basket, you will be exposed to the risks related to both underlying indices. Poor performance by either underlying index
over the term of the Buffered PLUS will negatively affect your return and will not be offset or mitigated by any positive performance
by the other underlying index. If the final average index value of either underlying index declines to below 88% of its respective
initial average index value, you will be exposed to the negative performance of the worst performing underlying index at maturity,
even if the other underlying index has appreciated or has not declined as much. Accordingly, your investment is subject to the
price risk of both underlying indices.
|
|
§
|
Because the Buffered PLUS are linked to the performance of the worst performing underlying index, you are exposed to greater
risk of sustaining a significant loss on your investment than if the Buffered PLUS were linked to just one underlying index.
The risk that you will suffer a loss on your investment is greater if you invest in the Buffered PLUS as opposed to substantially
similar Buffered PLUS that are linked to the performance of just one underlying index. With two underlying indices, it is more
likely that the final average index value of either underlying index will decline to below its respective downside threshold value
than if the Buffered PLUS were linked to only one underlying index. Therefore, it is more likely that you will suffer a loss on
your investment.
|
|
§
|
The market price will be influenced by many unpredictable factors.
Several factors will influence the value of the Buffered
PLUS in the secondary market and the price at which MS & Co. may be willing to purchase or sell the Buffered PLUS in the secondary
market, including the value, volatility and dividend yield of the underlying indices, interest and yield rates, time remaining
to maturity, geopolitical conditions and economic, financial, political and regulatory or judicial events and any actual or anticipated
changes in our credit ratings or credit spreads. The levels of the underlying indices may be, and have recently been, extremely
volatile, and we can give you no assurance that the volatility will lessen. See “S&P 500
®
Index
Overview” and “Russell 2000
®
Index Overview” below. You may receive less, and
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
possibly significantly less, than
the stated principal amount per Buffered PLUS if you try to sell your Buffered PLUS prior to maturity.
|
§
|
The Buffered PLUS are subject to our credit risk, and any actual or anticipated changes to our credit ratings or credit
spreads may adversely affect the market value of the Buffered PLUS.
You are dependent on our ability to pay all amounts due
on the Buffered PLUS at maturity and therefore you are subject to our credit risk. If we default on our obligations under the Buffered
PLUS, your investment would be at risk and you could lose some or all of your investment. As a result, the market value of the
Buffered PLUS prior to maturity will be affected by changes in the market’s view of our creditworthiness. Any actual or anticipated
decline in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely
affect the market value of the Buffered PLUS.
|
|
§
|
As a finance subsidiary, MSFL has no independent operations and will have no independent assets.
As a finance subsidiary,
MSFL has no independent operations beyond the issuance and administration of its securities and will have no independent assets
available for distributions to holders of MSFL securities if they make claims in respect of such securities in a bankruptcy, resolution
or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee
by Morgan Stanley and that guarantee will rank
pari passu
with all other unsecured, unsubordinated obligations of Morgan
Stanley. Holders will have recourse only to a single claim against Morgan Stanley and its assets under the guarantee. Holders of
securities issued by MSFL should accordingly assume that in any such proceedings they would not have any priority over and should
be treated
pari passu
with the claims of other unsecured, unsubordinated creditors of Morgan Stanley, including holders
of Morgan Stanley-issued securities.
|
|
§
|
The Buffered PLUS are linked to the Russell 2000
®
Index and are subject to risks associated with small-capitalization companies.
As the Russell 2000
®
Index is
one of the underlying indices, and the Russell 2000
®
Index consists of stocks issued by companies with relatively
small market capitalization, the Buffered PLUS are linked to the value of small-capitalization companies. These companies often
have greater stock price volatility, lower trading volume and less liquidity than large-capitalization companies and therefore
the Russell 2000
®
Index may be more volatile than indices that consist of stocks issued by large-capitalization
companies. Stock prices of small-capitalization companies are also more vulnerable than those of large-capitalization companies
to adverse business and economic developments, and the stocks of small-capitalization companies may be thinly traded. In addition,
small capitalization companies are typically less well-established and less stable financially than large-capitalization companies
and may depend on a small number of key personnel, making them more vulnerable to loss of personnel. Such companies tend to have
smaller revenues, less diverse product lines, smaller shares of their product or service markets, fewer financial resources and
less competitive strengths than large-capitalization companies and are more susceptible to adverse developments related to their
products.
|
|
§
|
You will not know the initial average index value for either underlying index on the
pricing date; the value of either underlying index on one or more initial averaging dates may adversely affect the relevant initial
average index value.
Because the initial average index value for each underlying index is calculated
over
daily initial averaging dates during an approximately 3-month period from and including the pricing date
,
the initial average index values will not be determined until the last initial averaging date, and, accordingly, you will not know
the initial average index value for either underlying index on the pricing date. It is possible that either underlying index may
increase in value over the initial averaging dates, which will increase the initial average index value of such underlying index.
The initial average index value of either underlying index may be higher than if it were based on the closing value of such underlying
index on the pricing date or on other dates. Investing in the Buffered PLUS in not the same as investing in securities that offer
1-to-1 upside exposure to the performance of the underlying indices.
|
|
§
|
The amount payable on the Buffered PLUS is based on the arithmetic average of the closing values of the underlying indices
on each of the final averaging dates during the approximately 3-month period from and including March 8, 2024 to and including
June 6, 2024, and therefore the payment at maturity may be less than if it were based solely on the closing values on the last
final averaging date.
The amount payable at maturity will be calculated by reference to the average of the closing values of
the underlying indices on the averaging dates during the period from and including March 8, 2024 to and including June 6, 2024.
Therefore, in calculating the final average index value of each underlying index, positive performance of such underlying index
as of some averaging dates may
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
be moderated, or wholly offset,
by lesser or negative performance as of other averaging dates. Similarly, the final average index value of each underlying index,
calculated based on the closing values of such underlying index on each of the final averaging dates, may be less than the closing
values of such underlying index on the last final averaging date, and as a result, the payment at maturity you receive may be less
than if it were based solely on the closing values of the underlying indices on the last final averaging date. Investing in the
Buffered PLUS is not the same as investing in securities that offer 1-to-1 upside exposure to the performance of the underlying
indices.
|
§
|
Investing in the Buffered PLUS is not equivalent to investing in either underlying index.
Investing in the Buffered
PLUS is not equivalent to investing in either underlying index or the component stocks of either underlying index. Investors in
the Buffered PLUS will not have voting rights or rights to receive dividends or other distributions or any other rights with respect
to stocks that constitute either underlying index.
|
|
§
|
Adjustments to the underlying indices could adversely affect the value of the Buffered PLUS.
The publisher of either
underlying index may add, delete or substitute the stocks constituting such underlying index or make other methodological changes
that could change the value of such underlying index. The publisher of either underlying index may discontinue or suspend calculation
or publication of such underlying index at any time. In these circumstances, the calculation agent will have the sole discretion
to substitute a successor index that is comparable to the discontinued underlying index and will be permitted to consider indices
that are calculated and published by the calculation agent or any of its affiliates.
|
|
§
|
The rate we are willing to pay for securities of this type, maturity and issuance size is likely to be lower than the rate
implied by our secondary market credit spreads and advantageous to us. Both the lower rate and the inclusion of costs associated
with issuing, selling, structuring and hedging the Buffered PLUS in the original issue price reduce the economic terms of the Buffered
PLUS, cause the estimated value of the Buffered PLUS to be less than the original issue price and will adversely affect secondary
market prices.
Assuming no change in market conditions or any other relevant factors, the prices, if any, at which dealers,
including MS & Co., may be willing to purchase the Buffered PLUS in secondary market transactions will likely be significantly
lower than the original issue price, because secondary market prices will exclude the issuing, selling, structuring and hedging-related
costs that are included in the original issue price and borne by you and because the secondary market prices will reflect our secondary
market credit spreads and the bid-offer spread that any dealer would charge in a secondary market transaction of this type as well
as other factors.
|
The inclusion of the costs of issuing,
selling, structuring and hedging the Buffered PLUS in the original issue price and the lower rate we are willing to pay as issuer
make the economic terms of the Buffered PLUS less favorable to you than they otherwise would be.
However, because the costs associated
with issuing, selling, structuring and hedging the Buffered PLUS are not fully deducted upon issuance, for a period of up to 6
months following the issue date, to the extent that MS & Co. may buy or sell the Buffered PLUS in the secondary market, absent
changes in market conditions, including those related to the underlying indices, and to our secondary market credit spreads, it
would do so based on values higher than the estimated value, and we expect that those higher values will also be reflected in your
brokerage account statements.
|
§
|
The Buffered PLUS will not be listed on any securities exchange and secondary trading may be limited.
The Buffered PLUS
will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the Buffered PLUS. MS
& Co. may, but is not obligated to, make a market in the Buffered PLUS. Even if there is a secondary market, it may not provide
enough liquidity to allow you to trade or sell the Buffered PLUS easily. Because we do not expect that other broker-dealers will
participate significantly in the secondary market for the Buffered PLUS, the price at which you may be able to trade your Buffered
PLUS is likely to depend on the price, if any, at which MS & Co. is willing to transact. If, at any time, MS & Co. were
not to make a market in the Buffered PLUS, it is likely that there would be no secondary market for the Buffered PLUS. Accordingly,
you should be willing to hold your Buffered PLUS to maturity.
|
|
§
|
The estimated value of the Buffered PLUS is determined by reference to our pricing and valuation models, which may differ
from those of other dealers and is not a maximum or minimum secondary market price.
These pricing and valuation models are
proprietary and rely in part on subjective views of certain market inputs and certain assumptions about future events, which may
prove to be incorrect. As a result, because there is no market-standard way to value these types of securities, our models may
yield a higher estimated value of the Buffered PLUS
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
than those generated by others,
including other dealers in the market, if they attempted to value the Buffered PLUS. In addition, the estimated value on the pricing
date does not represent a minimum or maximum price at which dealers, including MS & Co., would be willing to purchase your
Buffered PLUS in the secondary market (if any exists) at any time. The value of your Buffered PLUS at any time after the date of
this document will vary based on many factors that cannot be predicted with accuracy, including our creditworthiness and changes
in market conditions. See also “The market price will be influenced by many unpredictable factors” above.
|
§
|
Hedging and trading activity by our affiliates could potentially adversely affect the value of the Buffered PLUS.
One
or more of our affiliates and/or third-party dealers expect to carry out hedging activities related to the Buffered PLUS (and to
other instruments linked to the underlying indices or its component stocks), including trading in the stocks that constitute the
underlying indices as well as in other instruments related to the underlying indices. As a result, these entities may be unwinding
or adjusting hedge positions during the term of the Buffered PLUS, and the hedging strategy may involve greater and more frequent
dynamic adjustments to the hedge as the averaging dates approach. MS & Co. and some of our other affiliates also trade the
stocks that constitute the underlying indices and other financial instruments related to the underlying indices on a regular basis
as part of their general broker-dealer and other businesses. Any of these hedging or trading activities on or prior to the initial
averaging dates could potentially increase the initial average index value of an underlying index, and, therefore, could increase
the level at or above which such underlying index must close on the final averaging dates so that investors do not suffer a loss
on their initial investment in the Buffered PLUS (depending also on the performance of the other underlying index). Additionally,
such hedging or trading activities during the term of the Buffered PLUS, including on the final averaging dates, could adversely
affect the closing value of underlying index on the final averaging dates, and, accordingly, the amount of cash an investor will
receive at maturity (depending also on the performance of the other underlying index).
|
|
§
|
The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect
to the Buffered PLUS
. As calculation agent, MS & Co. will determine the initial average index values, the downside threshold
values and the final average index values, and will calculate the amount of cash you will receive at maturity. Moreover, certain
determinations made by MS & Co., in its capacity as calculation agent, may require it to exercise discretion and make subjective
judgments, such as with respect to the occurrence or non-occurrence of market disruption events and the selection of a successor
index or calculation of the final average index value in the event of a market disruption event or discontinuance of the underlying
indices. These potentially subjective determinations may adversely affect the payout to you at maturity. For further information
regarding these types of determinations, see “Description of PLUS—Postponement of Valuation Date(s)” and “—Calculation
Agent and Calculations” and related definitions in the accompanying product supplement. In addition, MS & Co. has determined
the estimated value of the Buffered PLUS on the pricing date.
|
|
§
|
The U.S. federal income tax consequences of an investment in the Buffered PLUS are uncertain.
Please read the discussion
under “Additional Information—Tax considerations” in this document and the discussion under “United States
Federal Taxation” in the accompanying product supplement for PLUS (together, the “Tax Disclosure Sections”) concerning
the U.S. federal income tax consequences of an investment in the Buffered PLUS. If the Internal Revenue Service (the “IRS”)
were successful in asserting an alternative treatment, the timing and character of income on the Buffered PLUS might differ significantly
from the tax treatment described in the Tax Disclosure Sections. For example, under one possible treatment, the IRS could seek
to recharacterize the Buffered PLUS as debt instruments. In that event, U.S. Holders would be required to accrue into income original
issue discount on the Buffered PLUS every year at a “comparable yield” determined at the time of issuance and recognize
all income and gain in respect of the Buffered PLUS as ordinary income. Additionally, as discussed under “United States Federal
Taxation—FATCA” in the accompanying product supplement for PLUS, the withholding rules commonly referred to as “FATCA”
would apply to the Buffered PLUS if they were recharacterized as debt instruments. However, recently proposed regulations (the
preamble to which specifies that taxpayers are permitted to rely on them pending finalization) eliminate the withholding requirement
on payments of gross proceeds of a taxable disposition (other than amounts treated as “FDAP income,” as defined in
the accompanying product supplement for PLUS). The risk that financial instruments providing for buffers, triggers or similar downside
protection features, such as the Buffered PLUS, would be recharacterized as debt is greater than the risk of recharacterization
for comparable financial instruments that do not have such features. In addition, if an Early Fixing Event (as defined in this
document) occurs, it is possible that a U.S. Holder would be treated as exchanging the Buffered PLUS for debt instruments. We do
not plan to request a ruling from the IRS regarding the
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
tax treatment of the Buffered PLUS,
and the IRS or a court may not agree with the tax treatment described in the Tax Disclosure Sections.
In 2007, the U.S. Treasury Department
and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward contracts”
and similar instruments. The notice focuses in particular on whether to require holders of these instruments to accrue income over
the term of their investment. It also asks for comments on a number of related topics, including the character of income or loss
with respect to these instruments; whether short-term instruments should be subject to any such accrual regime; the relevance of
factors such as the exchange-traded status of the instruments and the nature of the underlying property to which the instruments
are linked; the degree, if any, to which income (including any mandated accruals) realized by non-U.S. investors should be subject
to withholding tax; and whether these instruments are or should be subject to the “constructive ownership” rule, which
very generally can operate to recharacterize certain long-term capital gain as ordinary income and impose an interest charge. While
the notice requests comments on appropriate transition rules and effective dates, any Treasury regulations or other guidance promulgated
after consideration of these issues could materially and adversely affect the tax consequences of an investment in the Buffered
PLUS, possibly with retroactive effect. Both U.S. and Non-U.S. Holders should consult their tax advisers regarding the U.S. federal
income tax consequences of an investment in the Buffered PLUS, including possible alternative treatments, the issues presented
by this notice and any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
S&P 500
®
Index Overview
The S&P 500
®
Index, which is calculated, maintained
and published by S&P Dow Jones Indices LLC (“S&P”), consists of stocks of 500 component companies selected
to provide a performance benchmark for the U.S. equity markets. The calculation of the S&P 500
®
Index is based
on the relative value of the float adjusted aggregate market capitalization of the 500 component companies as of a particular time
as compared to the aggregate average market capitalization of 500 similar companies during the base period of the years 1941 through
1943. For additional information about the S&P 500
®
Index, see the information set forth under “S&P
500
®
Index” in the accompanying index supplement.
Information as of market close on July 12, 2019:
Bloomberg Ticker Symbol:
|
SPX
|
Current Index Value:
|
3,013.77
|
52 Weeks Ago:
|
2,798.29
|
52 Week High (on 7/12/2019):
|
3,013.77
|
52 Week Low (on 12/24/2018):
|
2,351.10
|
The following graph sets forth the daily closing values of the
SPX Index for the period from January 1, 2014 through July 12, 2019. The related table sets forth the published high and low closing
values, as well as end-of-quarter closing values, of the SPX Index for each quarter in the same period. The closing value of the
SPX Index on July 12, 2019 was 3,013.77. We obtained the information in the table and graph below from Bloomberg Financial Markets,
without independent verification. The SPX Index has at times experienced periods of high volatility, and you should not take the
historical values of the SPX Index as an indication of its future performance.
SPX Index Daily Closing Values
January 1, 2014 to July 12, 2019
|
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
S&P 500
®
Index
|
High
|
Low
|
Period End
|
2014
|
|
|
|
First Quarter
|
1,878.04
|
1,741.89
|
1,872.34
|
Second Quarter
|
1,962.87
|
1,815.69
|
1,960.23
|
Third Quarter
|
2,011.36
|
1,909.57
|
1,972.29
|
Fourth Quarter
|
2,090.57
|
1,862.49
|
2,058.90
|
2015
|
|
|
|
First Quarter
|
2,117.39
|
1,992.67
|
2,067.89
|
Second Quarter
|
2,130.82
|
2,057.64
|
2,063.11
|
Third Quarter
|
2,128.28
|
1,867.61
|
1,920.03
|
Fourth Quarter
|
2,109.79
|
1,923.82
|
2,043.94
|
2016
|
|
|
|
First Quarter
|
2,063.95
|
1,829.08
|
2,059.74
|
Second Quarter
|
2,119.12
|
2,000.54
|
2,098.86
|
Third Quarter
|
2,190.15
|
2,088.55
|
2,168.27
|
Fourth Quarter
|
2,271.72
|
2,085.18
|
2,238.83
|
2017
|
|
|
|
First Quarter
|
2,395.96
|
2,257.83
|
2,362.72
|
Second Quarter
|
2,453.46
|
2,328.95
|
2,423.41
|
Third Quarter
|
2,519.36
|
2,409.75
|
2,519.36
|
Fourth Quarter
|
2,690.16
|
2,529.12
|
2,673.61
|
2018
|
|
|
|
First Quarter
|
2,872.87
|
2,581.00
|
2,640.87
|
Second Quarter
|
2,786.85
|
2,581.88
|
2,718.37
|
Third Quarter
|
2,930.75
|
2,713.22
|
2,913.98
|
Fourth Quarter
|
2,925.51
|
2,351.10
|
2,506.85
|
2019
|
|
|
|
First Quarter
|
2,854.88
|
2,447.89
|
2,834.40
|
Second Quarter
|
2,954.18
|
2,744.45
|
2,941.76
|
Third Quarter (through July 12, 2019)
|
3,013.77
|
2,964.33
|
3,013.77
|
“Standard & Poor’s
®
,” “S&P
®
,”
“S&P 500
®
,” “Standard & Poor’s 500” and “500” are trademarks of
S&P Dow Jones LLC. See “S&P 500
®
Index” in the accompanying index supplement.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Russell 2000
®
Index Overview
The Russell 2000
®
Index is an index calculated,
published and disseminated by FTSE Russell, and measures the composite price performance of stocks of 2,000 companies incorporated
in the U.S. and its territories. All 2,000 stocks are traded on a major U.S. exchange and are the 2,000 smallest securities that
form the Russell 3000
®
Index. The Russell 3000
®
Index is composed of the 3,000 largest U.S.
companies as determined by market capitalization and represents approximately 98% of the U.S. equity market. The Russell 2000
®
Index consists of the smallest 2,000 companies included in the Russell 3000
®
Index and represents a small
portion of the total market capitalization of the Russell 3000
®
Index. The Russell 2000
®
Index is designed to track the performance of the small capitalization segment of the U.S. equity market. For additional information
about the Russell 2000
®
Index, see the information set forth under “Russell 2000
®
Index”
in the accompanying index supplement.
Information as of market close on July 12, 2019:
Bloomberg Ticker Symbol:
|
RTY
|
Current Index Value:
|
1,569.998
|
52 Weeks Ago:
|
1,690.277
|
52 Week High (on 8/31/2018):
|
1,740.753
|
52 Week Low (on 12/24/2018):
|
1,266.925
|
The following graph sets forth the daily closing values of the
RTY Index for the period from January 1, 2014 through July 12, 2019. The related table sets forth the published high and low closing
values, as well as end-of-quarter closing values, of the RTY Index for each quarter in the same period. The closing value of the
RTY Index on July 12, 2019 was 1,569.998. We obtained the information in the table and graph below from Bloomberg Financial Markets,
without independent verification. The RTY Index has at times experienced periods of high volatility, and you should not take the
historical values of the RTY Index as an indication of its future performance.
RTY Index Daily Closing Values
January 1, 2014 to July 12, 2019
|
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Russell 2000
®
Index
|
High
|
Low
|
Period End
|
2014
|
|
|
|
First Quarter
|
1,208.651
|
1,093.594
|
1,173.038
|
Second Quarter
|
1,192.960
|
1,095.986
|
1,192.960
|
Third Quarter
|
1,208.150
|
1,101.676
|
1,101.676
|
Fourth Quarter
|
1,219.109
|
1,049.303
|
1,204.696
|
2015
|
|
|
|
First Quarter
|
1,266.373
|
1,154.709
|
1,252.772
|
Second Quarter
|
1,295.799
|
1,215.417
|
1,253.947
|
Third Quarter
|
1,273.328
|
1,083.907
|
1,100.688
|
Fourth Quarter
|
1,204.159
|
1,097.552
|
1,135.889
|
2016
|
|
|
|
First Quarter
|
1,114.028
|
953.715
|
1,114.028
|
Second Quarter
|
1,188.954
|
1,089.646
|
1,151.923
|
Third Quarter
|
1,263.438
|
1,139.453
|
1,251.646
|
Fourth Quarter
|
1,388.073
|
1,156.885
|
1,357.130
|
2017
|
|
|
|
First Quarter
|
1,413.635
|
1,345.598
|
1,385.920
|
Second Quarter
|
1,425.985
|
1,345.244
|
1,415.359
|
Third Quarter
|
1,490.861
|
1,356.905
|
1,490.861
|
Fourth Quarter
|
1,548.926
|
1,464.095
|
1,535.511
|
2018
|
|
|
|
First Quarter
|
1,610.706
|
1,463.793
|
1,529.427
|
Second Quarter
|
1,706.985
|
1,492.531
|
1,643.069
|
Third Quarter
|
1,740.753
|
1,653.132
|
1,696.571
|
Fourth Quarter
|
1,672.992
|
1,266.925
|
1,348.559
|
2019
|
|
|
|
First Quarter
|
1,590.062
|
1,330.831
|
1,539.739
|
Second Quarter
|
1,614.976
|
1,465.487
|
1,566.572
|
Third Quarter (through July 12, 2019)
|
1,575.625
|
1,557.921
|
1,569.998
|
The “Russell 2000
®
Index” is a trademark
of FTSE Russell. For more information, see “Russell 2000
®
Index” in the accompanying index supplement.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Additional Terms of the Buffered PLUS
Please read this information in conjunction with the summary
terms on the front cover of this document.
Additional Terms:
|
|
If the terms described herein are inconsistent with those described in the accompanying product supplement, index supplement or prospectus, the terms described herein shall control.
|
Underlying index publishers:
|
With respect to the SPX Index, S&P Dow Jones Indices LLC,
or any successor thereof.
With respect to the RTY Index, FTSE Russell, or any successor
thereof.
|
Denominations:
|
$10 per Buffered PLUS and integral multiples thereof
|
Index closing value:
|
With respect to the SPX Index, the index closing value on any
index business day shall be determined by the calculation agent and shall equal the official closing value of the SPX Index, or
any successor index as defined under “Discontinuance of Any Underlying Index or Basket Index; Alteration of Method of Calculation”
in the accompanying product supplement, published at the regular official weekday close of trading on such index business day by
the underlying index publisher for the SPX Index, as determined by the calculation agent. In certain circumstances, the index closing
value for the SPX Index will be based on the alternate calculation of the SPX Index as described under “Discontinuance of
Any Underlying Index or Basket Index; Alteration of Method of Calculation” in the accompanying product supplement.
With respect to the RTY Index, the index closing value
on any index business day shall be determined by the calculation agent and shall equal the closing value of the RTY Index or any
successor index reported by Bloomberg Financial Services, or any successor reporting service the calculation agent may select,
on such index business day. In certain circumstances, the index closing value for the RTY Index will be based on the alternate
calculation of the RTY Index as described under “Discontinuance of Any Underlying Index or Basket Index; Alteration of Method
of Calculation” in the accompanying product supplement. The closing value of the RTY Index reported by Bloomberg Financial
Services may be lower or higher than the official closing value of the RTY Index published by the underlying index publisher for
the RTY Index.
|
Interest:
|
None
|
Trustee:
|
The Bank of New York Mellon
|
Calculation agent:
|
MS & Co.
|
Bull market or bear market PLUS:
|
Bull market PLUS
|
Initial averaging dates:
|
If any scheduled initial averaging date, including October 21, 2019, is not an index business day with respect to either underlying index or if a market disruption event occurs on any initial averaging date with respect to either underlying index, such day will not be counted for the purposes of calculating the initial average index value solely for such affected underlying index.
|
Final averaging dates:
|
If any scheduled final averaging date, including June 6, 2024, is not an index business day with respect to either underlying index or if a market disruption event occurs on any final averaging date with respect to either underlying index, such day will not be counted for the purposes of calculating the final average index value solely for such affected underlying index.
|
Issuer notice to registered security holders, the trustee and the depositary:
|
The issuer shall, or shall cause the calculation agent to, (i) provide written notice to the trustee and to the depositary of the amount of cash to be delivered with respect to each Buffered PLUS on or prior to 10:30 a.m. (New York City time) on the business day preceding the maturity date, and (ii) deliver the aggregate cash amount due with respect to the Buffered PLUS to the trustee for delivery to the depositary, as holder of the Buffered PLUS, on the maturity date.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Additional Information About the Buffered PLUS
Additional Information:
|
|
Minimum ticketing size:
|
$1,000 / 100 Buffered PLUS
|
Tax considerations:
|
Although there is uncertainty regarding
the U.S. federal income tax consequences of an investment in the Buffered PLUS due to the lack of governing authority, in the opinion
of our counsel, Davis Polk & Wardwell LLP, under current law, and based on current market conditions, a Buffered PLUS should
be treated as a single financial contract that is an “open transaction” for U.S. federal income tax purposes. However,
because our counsel’s opinion is based in part on market conditions as of the date of this document, it is subject to confirmation
on the pricing date.
Assuming this treatment of the Buffered
PLUS is respected and subject to the discussion in “United States Federal Taxation” in the accompanying product supplement
for PLUS, the following U.S. federal income tax consequences should result based on current law:
§
Subject
to the discussion concerning an “Early Fixing Event” (as defined below), a U.S. Holder should not be required to recognize
taxable income over the term of the Buffered PLUS prior to settlement, other than pursuant to a sale or exchange.
§
Upon
sale, exchange or settlement of the Buffered PLUS, a U.S. Holder should recognize gain or loss equal to the difference between
the amount realized and the U.S. Holder’s tax basis in the Buffered PLUS. Such gain or loss should be long-term capital gain
or loss if the investor has held the Buffered PLUS for more than one year, and short-term capital gain or loss otherwise.
Because
the payment at maturity is determined by reference to the value of the worst performing underlying index on the final averaging
dates, it is possible that the payment at maturity could become fixed, or subject to a minimum level that equals or exceeds the
issue price, prior to the final valuation date (an “Early Fixing Event”). Upon an Early Fixing Event, it is
possible that a holder would be treated as exchanging each of its Buffered PLUS for instruments treated as debt for U.S. federal
income tax purposes. If this treatment applied, a U.S. Holder might be required to recognize any gain on the Buffered PLUS, and
the U.S. Holder’s tax consequences of holding the Buffered PLUS after the Early Fixing Event would likely be significantly
affected. In particular, a U.S. Holder would likely be required to recognize ordinary interest income on the Buffered PLUS in
advance of their retirement or earlier disposition, and any gain upon disposition thereafter would likely be treated as ordinary
income. A Non-U.S. Holder might be required to fulfill certain certification requirements in order to avoid being subject to U.S.
federal withholding tax in respect of the Buffered PLUS. Notwithstanding the foregoing, our counsel believes that it is more likely
than not that such treatment will not apply and that you will instead recognize any gain at maturity or an earlier disposition
of the Buffered PLUS. You should consult your tax advisor regarding the consequences of an Early Fixing Event.
In 2007,
the U.S. Treasury Department and the Internal Revenue Service (the “IRS”) released a notice requesting comments on
the U.S. federal income tax treatment of “prepaid forward contracts” and similar instruments. The notice focuses in
particular on whether to require holders of these instruments to accrue income over the term of their investment. It also asks
for comments on a number of related topics, including the character of income or loss with respect to these instruments; whether
short-term instruments should be subject to any such accrual regime; the relevance of factors such as the exchange-traded status
of the instruments and the nature of the underlying property to which the instruments are linked; the degree, if any, to which
income (including any mandated accruals) realized by non-U.S. investors should be subject to withholding tax; and whether these
instruments are or should be subject to the “constructive ownership” rule, which very generally can operate to recharacterize
certain long-term capital gain as ordinary income and impose an interest charge. While the notice requests comments on appropriate
transition rules and effective dates, any Treasury regulations or other guidance promulgated after consideration of these issues
could materially and adversely affect the tax consequences of an investment in the Buffered PLUS, possibly with retroactive effect.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
|
As discussed
in the accompanying product supplement for PLUS, Section 871(m) of the Internal Revenue Code of 1986, as amended, and Treasury
regulations promulgated thereunder (“Section 871(m)”) generally impose a 30% (or a lower applicable treaty rate) withholding
tax on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to certain financial instruments linked to U.S.
equities or indices that include U.S. equities (each, an “Underlying Security”). Subject to certain exceptions, Section
871(m) generally applies to securities that substantially replicate the economic performance of one or more Underlying Securities,
as determined based on tests set forth in the applicable Treasury regulations (a “Specified Security”). However, pursuant
to an IRS notice, Section 871(m) will not apply to securities issued before January 1, 2021 that do not have a delta of one with
respect to any Underlying Security. Based on the terms of the Buffered PLUS and current market conditions, we expect that the Buffered
PLUS will not have a delta of one with respect to any Underlying Security on the pricing date. However, we will provide an updated
determination in the final pricing supplement. Assuming that the Buffered PLUS do not have a delta of one with respect to any Underlying
Security, our counsel is of the opinion that the Buffered PLUS should not be Specified Securities and, therefore, should not be
subject to Section 871(m).
Our determination
is not binding on the IRS, and the IRS may disagree with this determination. Section 871(m) is complex and its application may
depend on your particular circumstances, including whether you enter into other transactions with respect to an Underlying Security.
If withholding is required, we will not be required to pay any additional amounts with respect to the amounts so withheld. You
should consult your tax adviser regarding the potential application of Section 871(m) to the Buffered PLUS.
Both U.S.
and non-U.S. investors considering an investment in the Buffered PLUS should read the discussion under “Risk Factors”
in this document and the discussion under “United States Federal Taxation” in the accompanying product supplement for
PLUS and consult their tax advisers regarding all aspects of the U.S. federal income tax consequences of an investment in the Buffered
PLUS, including possible alternative treatments, the issues presented by the aforementioned notice and any tax consequences arising
under the laws of any state, local or non-U.S. taxing jurisdiction.
The discussion
in the preceding paragraphs under “Tax considerations” and the discussion contained in the section entitled “United
States Federal Taxation” in the accompanying product supplement for PLUS, insofar as they purport to describe provisions
of U.S. federal income tax laws or legal conclusions with respect thereto, constitute the full opinion of Davis Polk & Wardwell
LLP regarding the material U.S. federal tax consequences of an investment in the Buffered PLUS.
|
Use of proceeds and hedging:
|
The proceeds from the sale of the Buffered PLUS will be used
by us for general corporate purposes. We will receive, in aggregate, $10 per Buffered PLUS issued, because, when we enter into
hedging transactions in order to meet our obligations under the Buffered PLUS, our hedging counterparty will reimburse the cost
of the agent’s commissions. The costs of the Buffered PLUS borne by you and described beginning on page 2 above comprise
the agent’s commissions and the cost of issuing, structuring and hedging the Buffered PLUS.
On or prior to the initial averaging dates, we, through our affiliates
or others, will hedge our anticipated exposure in connection with the Buffered PLUS by taking positions in stocks of the underlying
indices, futures and/or options contracts on the underlying indices, any component stocks of the underlying indices listed on major
securities markets or positions in any other available securities or instruments that we may wish to use in connection with such
hedging. Such purchase activity could potentially increase the initial average index value of either underlying index, and therefore
could increase the value at or above which such underlying index must close on the final averaging dates so that investors do not
suffer a loss on their initial investment in the Buffered PLUS (depending also on the performance of the other underlying index).
In addition,
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
|
through our affiliates, we are likely to modify our hedge position throughout the term of the Buffered PLUS, including on the averaging dates, by purchasing and selling the stocks constituting the underlying indices, futures or options contracts on the underlying indices or its component stocks listed on major securities markets or positions in any other available securities or instruments that we may wish to use in connection with such hedging activities. As a result, these entities may be unwinding or adjusting hedge positions during the term of the Buffered PLUS, and the hedging strategy may involve greater and more frequent adjustments to the hedge as the final averaging dates approach. We cannot give any assurance that our hedging activities will not affect the value of either underlying index and, therefore, adversely affect the value of the Buffered PLUS or the payment you will receive at maturity (depending also on the performance of the other underlying index). For further information on our use of proceeds and hedging, see “Use of Proceeds and Hedging” in the accompanying product supplement for PLUS.
|
Benefit plan investor considerations:
|
Each fiduciary of a pension, profit-sharing or other employee
benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (a “Plan”),
should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances before authorizing
an investment in the Buffered PLUS. Accordingly, among other factors, the fiduciary should consider whether the investment would
satisfy the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing
the Plan.
In addition, we and certain of our affiliates, including MS &
Co., may each be considered a “party in interest” within the meaning of ERISA, or a “disqualified person”
within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), with respect to many Plans, as well
as many individual retirement accounts and Keogh plans (such accounts and plans, together with other plans, accounts and arrangements
subject to Section 4975 of the Code, also “Plans”). ERISA Section 406 and Code Section 4975 generally prohibit transactions
between Plans and parties in interest or disqualified persons. Prohibited transactions within the meaning of ERISA or the Code
would likely arise, for example, if the Buffered PLUS are acquired by or with the assets of a Plan with respect to which MS &
Co. or any of its affiliates is a service provider or other party in interest, unless the Buffered PLUS are acquired pursuant to
an exemption from the “prohibited transaction” rules. A violation of these “prohibited transaction” rules
could result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for those persons, unless exemptive
relief is available under an applicable statutory or administrative exemption.
The U.S. Department of Labor has issued five prohibited transaction
class exemptions (“PTCEs”) that may provide exemptive relief for direct or indirect prohibited transactions resulting
from the purchase or holding of the Buffered PLUS. Those class exemptions are PTCE 96-23 (for certain transactions determined by
in-house asset managers), PTCE 95-60 (for certain transactions involving insurance company general accounts), PTCE 91-38 (for certain
transactions involving bank collective investment funds), PTCE 90-1 (for certain transactions involving insurance company separate
accounts) and PTCE 84-14 (for certain transactions determined by independent qualified professional asset managers). In addition,
ERISA Section 408(b)(17) and Section 4975(d)(20) of the Code provide an exemption for the purchase and sale of securities and the
related lending transactions, provided that neither the issuer of the securities nor any of its affiliates has or exercises any
discretionary authority or control or renders any investment advice with respect to the assets of the Plan involved in the transaction
and provided further that the Plan pays no more, and receives no less, than “adequate consideration” in connection
with the transaction (the so-called “service provider” exemption). There can be no assurance that any of these class
or statutory exemptions will be available with respect to transactions involving the Buffered PLUS.
Because we may be considered a party in interest with respect
to many Plans, the Buffered PLUS may not be purchased, held or disposed of by any Plan, any entity whose underlying assets include
“plan assets” by reason of any Plan’s investment in the entity (a “Plan Asset Entity”) or any person
investing “plan assets” of any Plan, unless such purchase, holding or disposition is eligible for exemptive relief,
including relief available under PTCEs 96-23, 95-60, 91-38, 90-1, 84-14 or the service provider exemption or such purchase, holding
or disposition is otherwise not prohibited. Any
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
|
purchaser, including any fiduciary purchasing on behalf of a
Plan, transferee or holder of the Buffered PLUS will be deemed to have represented, in its corporate and its fiduciary capacity,
by its purchase and holding of the Buffered PLUS that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing
such Buffered PLUS on behalf of or with “plan assets” of any Plan or with any assets of a governmental, non-U.S. or
church plan that is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions of Section
406 of ERISA or Section 4975 of the Code (“Similar Law”) or (b) its purchase, holding and disposition of these Buffered
PLUS will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
or violate any Similar Law.
Due to the complexity of these rules and the penalties that may
be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other
persons considering purchasing the Buffered PLUS on behalf of or with “plan assets” of any Plan consult with their
counsel regarding the availability of exemptive relief.
The Buffered PLUS are contractual financial instruments. The
financial exposure provided by the Buffered PLUS is not a substitute or proxy for, and is not intended as a substitute or proxy
for, individualized investment management or advice for the benefit of any purchaser or holder of the Buffered PLUS. The Buffered
PLUS have not been designed and will not be administered in a manner intended to reflect the individualized needs and objectives
of any purchaser or holder of the Buffered PLUS.
Each purchaser or holder of any Buffered PLUS acknowledges and
agrees that:
(i) the
purchaser or holder or its fiduciary has made and shall make all investment decisions for the purchaser or holder and the purchaser
or holder has not relied and shall not rely in any way upon us or our affiliates to act as a fiduciary or adviser of the purchaser
or holder with respect to (A) the design and terms of the Buffered PLUS, (B) the purchaser or holder’s investment in the
Buffered PLUS, or (C) the exercise of or failure to exercise any rights we have under or with respect to the Buffered PLUS;
(ii) we
and our affiliates have acted and will act solely for our own account in connection with (A) all transactions relating to the Buffered
PLUS and (B) all hedging transactions in connection with our obligations under the Buffered PLUS;
(iii) any
and all assets and positions relating to hedging transactions by us or our affiliates are assets and positions of those entities
and are not assets and positions held for the benefit of the purchaser or holder;
(iv) our
interests are adverse to the interests of the purchaser or holder; and
(v) neither
we nor any of our affiliates is a fiduciary or adviser of the purchaser or holder in connection with any such assets, positions
or transactions, and any information that we or any of our affiliates may provide is not intended to be impartial investment advice.
Each purchaser and holder of the Buffered PLUS has exclusive
responsibility for ensuring that its purchase, holding and disposition of the Buffered PLUS do not violate the prohibited transaction
rules of ERISA or the Code or any Similar Law. The sale of any Buffered PLUS to any Plan or plan subject to Similar Law is in no
respect a representation by us or any of our affiliates or representatives that such an investment meets all relevant legal requirements
with respect to investments by plans generally or any particular plan, or that such an investment is appropriate for plans generally
or any particular plan. In this regard, neither this discussion nor anything provided in this document is or is intended to be
investment advice directed at any potential Plan purchaser or at Plan purchasers generally and such purchasers of the Buffered
PLUS should consult and rely on their own counsel and advisers as to whether an investment in the Buffered PLUS is suitable.
However, individual retirement accounts, individual retirement
annuities and Keogh plans, as well as employee benefit plans that permit participants to direct the investment of their accounts,
will not be permitted to purchase or hold the Buffered PLUS if the account, plan or annuity is for the benefit of an employee of
Morgan Stanley or Morgan Stanley Wealth Management or a family member and the employee receives any compensation (such as, for
example, an addition to bonus) based on the purchase of the Buffered PLUS by the account, plan or annuity.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of Worst Performing of the S&P 500
®
Index and the Russell 2000
®
Index due June 11, 2024
Principal at Risk Securities
Additional considerations:
|
Client accounts over which Morgan Stanley, Morgan Stanley Wealth Management or any of their respective subsidiaries have investment discretion are not permitted to purchase the Buffered PLUS, either directly or indirectly.
|
Supplemental information regarding plan of distribution; conflicts of interest:
|
The agent may distribute the Buffered PLUS through Morgan Stanley
Smith Barney LLC (“Morgan Stanley Wealth Management”), as selected dealer, or other dealers, which may include Morgan
Stanley & Co. International plc (“MSIP”) and Bank Morgan Stanley AG. Morgan Stanley Wealth Management, MSIP and
Bank Morgan Stanley AG are affiliates of ours. Selected dealers, including Morgan Stanley Wealth Management, and their financial
advisors will collectively receive from the agent, Morgan Stanley & Co. LLC, a fixed sales commission of $0.05 for each Buffered
PLUS they sell. In addition, Morgan Stanley Wealth Management will receive a structuring fee of $0.05 for each Buffered PLUS.
MS & Co. is an affiliate of MSFL and a wholly owned subsidiary
of Morgan Stanley, and it and other affiliates of ours expect to make a profit by selling, structuring and, when applicable, hedging
the Buffered PLUS. When MS & Co. prices this offering of Buffered PLUS, it will determine the economic terms of the Buffered
PLUS such that for each Buffered PLUS the estimated value on the pricing date will be no lower than the minimum level described
in “Investment Summary” beginning on page 2.
MS & Co. will conduct this offering in compliance with the
requirements of FINRA Rule 5121 of the Financial Industry Regulatory Authority, Inc., which is commonly referred to as FINRA, regarding
a FINRA member firm’s distribution of the Buffered PLUS of an affiliate and related conflicts of interest. MS & Co. or
any of our other affiliates may not make sales in this offering to any discretionary account. See “Plan of Distribution (Conflicts
of Interest)” and “Use of Proceeds and Hedging” in the accompanying product supplement for PLUS.
|
Where you can find more information:
|
MSFL and Morgan Stanley have filed a registration statement (including
a prospectus, as supplemented by the product supplement for PLUS and index supplement) with the Securities and Exchange Commission,
or SEC, for the offering to which this communication relates. You should read the prospectus in that registration statement, the
product supplement for PLUS, the index supplement and any other documents relating to this offering that MSFL and Morgan Stanley
have filed with the SEC for more complete information about MSFL and Morgan Stanley and this offering. You may get these documents
without cost by visiting EDGAR on the SEC web site at
.
www.sec.gov. Alternatively, MSFL, Morgan
Stanley, any underwriter or any dealer participating in this offering will arrange to send you the product supplement for PLUS,
index supplement and prospectus if you so request by calling toll-free 800-584-6837.
You may access these documents on the SEC web site at
.
www.sec.gov
.
as
follows:
Product Supplement for PLUS dated November 16, 2017
Index Supplement dated November 16, 2017
Prospectus dated November 16, 2017
Terms used but not defined in this document are defined in the
product supplement for PLUS, in the index supplement or in the prospectus.
“Performance Leveraged Upside Securities
SM
”
and “PLUS
SM
” are our service marks.
|
Morgan Stanley Depository Shares Representing 1/1000TH Preferred Series 1 Fixed TO Floating Non (Cum) (NYSE:MSPI)
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