September 2017
Preliminary
Terms No. 1,877
Registration
Statement Nos. 333-200365; 333-200365-12
Dated
September 22, 2017
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 S&P
500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
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, do not guarantee any return of principal at maturity and have the terms described in the accompanying product
supplement for PLUS, index supplement and prospectus, as supplemented or modified by this document. At maturity, if the underlying
index has appreciated in value, investors will receive the stated principal amount of their investment plus leveraged upside performance
of the underlying index, subject to the maximum payment at maturity. If the underlying index has depreciated in value, but the
underlying index has not declined by more than the specified buffer amount, the Buffered PLUS will redeem for par. However, if
the underlying index has declined by more than the buffer amount, investors will lose 1.2121% for every 1% decline beyond the specified
buffer amount.
There is no minimum payment at maturity on the Buffered PLUS. Accordingly, you could lose your entire initial
investment in the Buffered PLUS.
The Buffered PLUS are for investors who seek an equity index-based return and who are willing
to risk their principal and forgo current income and upside above the maximum payment at maturity in exchange for the leverage
and buffer features that in each case apply to a limited range of performance of the underlying index. 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
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Issuer:
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Morgan Stanley Finance LLC
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Guarantor:
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Morgan Stanley
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Maturity date:
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September 20, 2019
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Underlying index:
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S&P 500
®
Index
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Aggregate principal amount:
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$
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Payment at maturity:
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·
If
the final index value is
greater than
the initial index value:
$1,000 + the leveraged upside payment
In no event will the payment at maturity exceed
the maximum payment at maturity.
·
If
the final index value is
less than or equal to
the initial index value but has decreased from the initial index value by
an amount
less than or equal to
the buffer amount of 17.50%:
$1,000
·
If
the final index value is
less than
the initial index value and has decreased from the initial index value by an amount
greater
than
the buffer amount of 17.50%:
$1,000 + [$1,000 x (index return + 17.50%) x downside
factor]
Under these circumstances, the payment
at maturity will be less than the stated principal amount of $1,000 and could be zero.
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Leveraged upside payment:
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$1,000 x leverage factor x index return
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Leverage factor:
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125%
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Downside factor:
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1.2121
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Index return:
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(final index value – initial index value) / initial index value
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Initial index value:
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2,500.60, which is the index closing value on September 21, 2017
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Final index value:
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The index closing value on the valuation date
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Valuation date:
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September 18, 2019, subject to adjustment for non-index business days and certain market disruption events
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Buffer amount:
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17.50%. As a result of the buffer amount of 17.50%, the value at or above which the underlying index must close on the valuation date so that investors do not suffer a loss on their initial investment in the Buffered PLUS is 2,062.995, which is 82.50% of the initial index value.
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Minimum payment at maturity:
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None
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Maximum payment at maturity:
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$1,201.00 per Buffered PLUS (120.10% of the stated principal amount)
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Stated principal amount:
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$1,000 per Buffered PLUS
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Issue price:
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$1,000 per Buffered PLUS (see “Commissions and issue price” below)
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Pricing date:
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September 22, 2017
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Original issue date:
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September 27, 2017 (3 business days after the pricing date)
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CUSIP / ISIN:
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61768CRG4 / US61768CRG41
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Listing:
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The Buffered PLUS will not be listed on any securities exchange.
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Agent:
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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.”
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Estimated value on the pricing date:
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Approximately $996.90 per Buffered PLUS, or within $10.00 of that estimate. See “Investment Summary” beginning on page 2.
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Commissions and issue price:
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Price to public
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Agent’s commissions
(1)
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Proceeds to us
(2)
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Per Buffered PLUS
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$1,000
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$0
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$1,000
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Total
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$
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$
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$
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(1)
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MS & Co. will act
as the agent for this offering and will not receive a sales commission in connection with sales of the securities. 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.
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(2)
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See “Use of proceeds
and hedging” on page 12.
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The Buffered PLUS involve risks not associated
with an investment in ordinary debt securities. See “Risk Factors” beginning on page 5
.
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 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 February 29, 2016
Index Supplement dated January 30, 2017
Prospectus dated February 16, 2016
Morgan Stanley Finance LLC
Buffered
PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered
Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
Investment Summary
Buffered Performance Leveraged Upside Securities
with Downside Factor
Principal at Risk Securities
The Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019 (the “Buffered PLUS”) can be used:
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§
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As an alternative to direct exposure to the underlying index that enhances returns for a certain
range of potential positive performance of the underlying index, subject to the maximum payment at maturity
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§
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To enhance returns and potentially outperform the underlying index in a moderately bullish scenario
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§
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To achieve similar levels of upside exposure to the underlying index as a direct investment while
using fewer dollars by taking advantage of the leverage factor
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§
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To obtain a buffer against a specified level of negative performance in the underlying index
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Maturity:
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Approximately 2 years
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Leverage factor:
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125%
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Buffer amount:
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17.50%
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Downside factor:
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1.2121
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Maximum payment at maturity:
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$1,201.00 per Buffered PLUS (120.10% of the stated principal amount)
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Minimum payment at maturity:
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None. You may lose your entire initial investment in the Buffered PLUS.
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Interest:
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None
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The original issue price of each Buffered PLUS
is $1,000. 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 $1,000. We estimate that
the value of each Buffered PLUS on the pricing date will be approximately $996.90, or within $10.00 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 index. The estimated value of the Buffered PLUS is determined using our own pricing and valuation models, market inputs
and assumptions relating to the underlying index, instruments based on the underlying index, 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 leverage factor, the buffer amount, the downside factor and the maximum payment at maturity, 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 index, 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 secondary market, absent changes in market conditions, including those related to
the underlying index, 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 the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
Key Investment Rationale
The Buffered PLUS offer leveraged upside exposure to the underlying
index, subject to the maximum payment at maturity, while providing limited protection against negative performance of the underlying
index. Once the underlying index has decreased in value by more than the specified buffer amount, investors are exposed to the
negative performance of the underlying index on a leveraged basis. At maturity, if the underlying index has appreciated, investors
will receive the stated principal amount of their investment
plus
leveraged upside performance of the underlying index,
subject to the maximum payment at maturity. At maturity, if the underlying index has depreciated and (i) if the final index value
of the underlying index has not declined from the initial index value by more than the specified buffer amount, the Buffered PLUS
will redeem for par, or (ii) if the final index value of the underlying index has declined by more than the buffer amount, the
investor will lose 1.2121% for every 1% decline beyond the specified buffer amount.
There is no minimum payment at maturity
on the Buffered PLUS. Accordingly, you could lose your entire initial investment in the Buffered PLUS.
Leveraged Performance Up to a Cap
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The Buffered PLUS offer investors an opportunity to capture enhanced returns for a certain range of positive performance relative to a direct investment in the underlying index, subject to the maximum payment at maturity.
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Upside Scenario
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The underlying index increases in value, and, at maturity, the Buffered PLUS redeem for the stated principal amount of $1,000
plus
125% of the index return, subject to the maximum payment at maturity of $1,201.00 per Buffered PLUS (120.10% of the stated principal amount).
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Par Scenario
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The underlying index declines in value by no more than 17.50%, and, at maturity, the Buffered PLUS redeem for the stated principal amount of $1,000.
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Downside Scenario
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The underlying index declines in value by more than 17.50%, and, at maturity, the Buffered PLUS redeem for less than the stated principal amount by an amount that is proportionate to the percentage decrease beyond the buffer amount of 17.50%
times
the downside factor of 1.2121. (Example: if the underlying index decreases in value by 30%, the Buffered PLUS will redeem for $848.49, or 84.849% of the stated principal amount.) There is no minimum payment at maturity on the Buffered PLUS, and you could lose your entire investment.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
How the Buffered PLUS Work
Payoff Diagram
The payoff diagram below illustrates the payment at maturity
on the Buffered PLUS based on the following terms:
Stated principal amount:
|
$1,000 per Buffered PLUS
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Leverage factor:
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125%
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Buffer amount:
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17.50%
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Downside factor:
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1.2121
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Maximum payment at maturity:
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$1,201.00 per Buffered PLUS (120.10% of the stated principal amount)
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Minimum payment at maturity:
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None
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Buffered PLUS Payoff Diagram
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How it works
|
§
|
Upside Scenario.
If the final index
value is greater than the initial index value, investors will receive the $1,000 stated principal amount plus 125% of the appreciation
of the underlying index over the term of the Buffered PLUS, subject to the maximum payment at maturity. Under the terms of the
Buffered PLUS, an investor will realize the maximum payment at maturity of $1,201.00 per Buffered PLUS (120.10% of the stated principal
amount) at a final index value of 116.08% of the initial index value.
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§
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Par Scenario.
If the final index
value is less than or equal to the initial index value but has decreased from the initial index value by an amount less than or
equal to the buffer amount of 17.50%, investors will receive the stated principal amount of $1,000 per Buffered PLUS.
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§
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Downside Scenario.
If the final index
value is less than the initial index value and has decreased from the initial index value by an amount greater than the buffer
amount of 17.50%, investors will receive an amount that is less than the stated principal amount by an amount that is proportionate
to the percentage decrease beyond the buffer amount of 17.50%
times
the downside factor of 1.2121.
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|
o
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For example, if the underlying index depreciates 30%, investors will lose 15.151% of their principal
and receive only $848.49 per Buffered PLUS at maturity, or 84.849% of the stated principal amount.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
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. You should also consult
with your investment, legal, tax, accounting and other advisers in connection with your investment in the Buffered PLUS.
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§
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The Buffered PLUS do not pay interest or guarantee the return of any 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 do not guarantee any return of
principal at maturity. If the final index value has declined by an amount greater than the buffer amount of 17.50% from the initial
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 value of the underlying index below 82.50% of the
initial index value
times
the downside factor of 1.2121.
As there is no minimum payment at maturity on the Buffered PLUS,
you could lose your entire initial investment.
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§
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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 $1,201.00 per Buffered PLUS, or 120.10% of the stated principal
amount. Although the leverage factor provides 125% exposure to any increase in the final index value over the initial index value,
because the payment at maturity will be limited to 120.10% of the stated principal amount for the Buffered PLUS, any increase in
the final index value over the initial index value by more than 16.08% of the initial index value will not further increase the
return on the Buffered PLUS.
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§
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The market price will be influenced by many unpredictable factors.
Several factors, many of which are beyond our control,
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 (frequency and magnitude of changes in value)
and dividend yield of the underlying index, interest and yield rates, time remaining to maturity, geopolitical conditions and economic,
financial, political and regulatory or judicial events that affect the underlying index or equities markets generally and which
may affect the final index value of the underlying index and any actual or anticipated changes in our credit ratings or credit
spreads.The value of the underlying index may be, and has recently been, volatile, and we can give you no assurance that the volatility
will lessen. See “S&P 500
®
Index Overview” below. You may receive less, and possibly significantly
less, than the stated principal amount per Buffered PLUS if you try to sell your Buffered PLUS prior to maturity.
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§
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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.
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§
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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.
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§
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The amount payable on the Buffered PLUS is not linked to the value of the underlying index at any time other than the valuation
date.
The final index value will be the index closing value on the valuation date, subject to adjustment for non-index business
days and certain market disruption events. Even if the value of the underlying index appreciates prior to the valuation date but
then drops by the valuation date, the payment at maturity may be less, and may be significantly less, than it would have been had
the payment at maturity been linked to the value of the
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
underlying
index prior to such drop. Although the actual value of the underlying index on the stated maturity date or at other times during
the term of the Buffered PLUS may be higher than the final index value, the payment at maturity will be based solely on the index
closing value on the valuation date.
|
§
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Investing in the Buffered PLUS is not equivalent to investing in the underlying index.
Investing in the Buffered PLUS
is not equivalent to investing in the underlying index or its component stocks. 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 the underlying
index.
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§
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Adjustments to the underlying index could adversely affect the value of the Buffered PLUS.
The underlying index publisher
may add, delete or substitute the stocks constituting the underlying index or make other methodological changes that could change
the value of the underlying index. The underlying index publisher may discontinue or suspend calculation or publication of the
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 is permitted to consider indices that are calculated and published
by the calculation agent or any of its affiliates. If the calculation agent determines that there is no appropriate successor index,
the payment at maturity on the Buffered PLUS will be an amount based on the closing prices at maturity of the securities composing
the underlying index at the time of such discontinuance, without rebalancing or substitution, computed by the calculation agent
in accordance with the formula for calculating the underlying index last in effect prior to discontinuance of the underlying index.
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§
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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 index, 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 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 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.
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|
§
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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 and, if it once chooses to make a market, may cease
doing so at any time. When it does make a market, it will generally do so for transactions
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
of
routine secondary market size at prices based on its estimate of the current value of the Buffered PLUS, taking into account its
bid/offer spread, our credit spreads, market volatility, the notional size of the proposed sale, the cost of unwinding any related
hedging positions, the time remaining to maturity and the likelihood that it will be able to resell 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. Since
other broker-dealers may not 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 to cease making 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.
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§
|
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. has determined the initial index value, will determine the final index
value and will calculate the amount of cash you receive at maturity, if any. 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
index value in the event of a market disruption event or discontinuance of the underlying index. These potentially subjective determinations
may adversely affect the payout to you at maturity, if any.For further information regarding these types of determinations, see
“Description of PLUS—Postponement of Valuation Date(s)” and “—Calculation Agent and Calculations”
in the accompanying product supplement.In addition, MS & Co. has determined the estimated value of the Buffered PLUS on the
pricing date.
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|
§
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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 have carried out, and will continue to carry out, hedging activities related
to the Buffered PLUS (and possibly to other instruments linked to the underlying index or its component stocks), including trading
in the stocks that constitute the underlying index as well as in other instruments related to the underlying index. 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 valuation date approaches. Some of our affiliates also
trade the stocks that constitute the underlying index and other financial instruments related to the underlying index 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 September
21, 2017 could have increased the initial index value, and, therefore, could have increased the value at or above which the underlying
index must close on the valuation date so that investors do not suffer a loss on their initial investment in the Buffered PLUS.
Additionally, such hedging or trading activities during the term of the Buffered PLUS, including on the valuation date, could adversely
affect the value of the underlying index on the valuation date, and, accordingly, the amount of cash an investor will receive at
maturity, if any.
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§
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The U.S. federal income tax consequences of an investment in the Buffered PLUS are uncertain.
Please read the discussion
under “Additional provisions—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 Legislation” 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. 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. We
do not plan to request a ruling from the IRS regarding the 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
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
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 the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
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 September 21, 2017:
Bloomberg Ticker Symbol:
|
SPX
|
Current Index Value:
|
2,500.60
|
52 Weeks Ago:
|
2,163.12
|
52 Week High (on 9/20/2017):
|
2,508.24
|
52 Week Low (on 11/4/2016):
|
2,085.18
|
The following graph sets forth the daily index closing values
of the underlying index for each quarter in the period from January 1, 2012 through September 21, 2017. The related table sets
forth the published high and low closing values, as well as end-of-quarter closing values, of the underlying index for each quarter
in the same period. The index closing value of the underlying index on September 21, 2017 was 2,500.60. We obtained the information
in the table and graph below from Bloomberg Financial Markets, without independent verification. The underlying index has at times
experienced periods of high volatility. You should not take the historical values of the underlying index as an indication of its
future performance, and no assurance can be given as to the closing level of the index on the valuation date.
S&P 500
®
Index
Daily Index Closing
Values
January 1, 2012
to September 21, 2017
|
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
S&P 500
®
Index
|
High
|
Low
|
Period End
|
2012
|
|
|
|
First Quarter
|
1,416.51
|
1,277.06
|
1,408.47
|
Second Quarter
|
1,419.04
|
1,278.04
|
1,362.16
|
Third Quarter
|
1,465.77
|
1,334.76
|
1,440.67
|
Fourth Quarter
|
1,461.40
|
1,353.33
|
1,426.19
|
2013
|
|
|
|
First Quarter
|
1,569.19
|
1,457.15
|
1,569.19
|
Second Quarter
|
1,669.16
|
1,541.61
|
1,606.28
|
Third Quarter
|
1,725.52
|
1,614.08
|
1,681.55
|
Fourth Quarter
|
1,848.36
|
1,655.45
|
1,848.36
|
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 (through September 21, 2017)
|
2,508.24
|
2,409.75
|
2,500.60
|
“Standard
& Poor’s
®
,” “S&P
®
,” “S&P 500
®
,” “Standard
& Poor’s 500” and “500” are trademarks of Standard and Poor’s Financial Services LLC. See “S&P
500
®
Index” in the accompanying index supplement.
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
Additional Information About the Buffered PLUS
Please read this information in conjunction with the summary
terms on the front cover of this document.
Additional
provisions:
|
|
|
Denominations:
|
|
$1,000 and integral multiples thereof
|
Underlying
index publisher:
|
|
S&P Dow Jones Indices LLC
|
Postponement
of maturity date:
|
|
If the scheduled valuation date is not an index
business day or if a market disruption event occurs on that day so that the valuation date as postponed falls less than two
business days prior to the scheduled maturity date, the maturity date of the Buffered PLUS will be postponed to the second
business day following that valuation date as postponed.
|
Minimum
ticketing size:
|
|
$1,000 / 1 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.
|
|
|
|
|
|
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:
|
|
|
|
|
|
§
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.
|
|
|
|
|
|
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.
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, the regulations exempt securities issued before January 1, 2018 that do not have a delta of
one with respect to any Underlying Security. The determination of delta will be made on the pricing date.
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.
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
|
|
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.
|
Trustee:
|
|
The Bank of New York Mellon
|
Calculation
agent:
|
|
Morgan Stanley & Co. LLC (“MS
& Co.”)
|
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, $1,000 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 September
21, 2017, we hedged our anticipated exposure in connection with the Buffered PLUS, by entering into hedging transactions with
our affiliates and/or third party dealers. We expect our hedging counterparties to take positions in stocks of the underlying
index, futures and options contracts on the underlying index. Such purchase activity could have increased the value of the underlying
index on September 21, 2017, and therefore could have increased the value at or above which the underlying index must close on
the valuation date so that investors do not suffer a loss on their initial investment in the Buffered PLUS. In addition, through
our affiliates, we are likely to modify our hedge position throughout the term of the Buffered PLUS, including on the valuation
date, by purchasing and selling the stocks constituting the underlying index, futures or options contracts on the underlying index
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 dynamic adjustments
to the hedge as the valuation date approaches. We cannot give any assurance that our hedging activities will not affect the value
of the underlying index, and, therefore, adversely affect the value of the Buffered PLUS or the payment you will receive at maturity,
if any. 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 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 (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 such 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 may 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
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
|
|
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 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 are eligible for exemptive relief or
such purchase, holding and disposition are not prohibited by ERISA or Section 4975 of the Code or 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.
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.
|
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
;
|
|
We expect to deliver the
Buffered PLUS against payment therefor in New York, New York on September 27, 2017, which will be the third scheduled business
day following the date of the pricing of
|
Morgan Stanley Finance LLC
Buffered PLUS Based on the Value of the S&P 500
®
Index due September 20, 2019
Buffered Performance Leveraged Upside Securities
SM
with Downside Factor
Principal at Risk Securities
conflicts
of interest:
|
|
the Buffered PLUS. Under
Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in two business days,
unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade Buffered PLUS
on the date of pricing or on or prior to the second business day prior to the original issue date will be required to
specify alternative settlement arrangements to prevent a failed settlement.
MS & Co. will act as
the agent for this offering and will not receive a sales commission in connection with sales of the securities.
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 securities 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.
|
Contact:
|
|
Morgan Stanley clients may contact their local Morgan Stanley
branch office or our principal executive offices at 1585 Broadway, New York, New York 10036 (telephone number (866) 477-4776). All
other clients may contact their local brokerage representative. Third-party distributors may contact Morgan Stanley
Structured Investment Sales at (800) 233-1087.
|
Where
you can find more information:
|
|
Morgan Stanley and MSFL
have filed a registration statement (including a prospectus, as supplemented by the product supplement for PLUS and the
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 Morgan Stanley and MSFL have filed with the SEC for more complete information
about Morgan Stanley, MSFL and this offering. You may get these documents without cost by visiting EDGAR on the SEC web
site at.www.sec.gov. Alternatively, Morgan Stanley, MSFL, any underwriter or any dealer participating in the offering
will arrange to send you the product supplement for PLUS, index supplement and prospectus if you so request by calling
toll-free 1-(800)-584-6837.
You may access these documents
on the SEC web site at.www.sec.gov as follows:
Product Supplement for PLUS dated February 29, 2016
Index Supplement dated January 30, 2017
Prospectus dated February 16, 2016
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.
|
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