October 2020
Preliminary Terms No. 5,131
Registration Statement Nos. 333-221595; 333-221595-01
Dated October 23, 2020
Filed pursuant to Rule 433
Morgan
Stanley Finance LLC
STRUCTURED INVESTMENTS
Opportunities in U.S. Equities
Lookback Entry PLUS Based on the Value of the
S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Fully and Unconditionally Guaranteed by Morgan
Stanley
Principal at
Risk Securities
The Lookback Entry PLUS, which we refer to as the PLUS, are unsecured
obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley.
The 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. The payment at maturity
on the PLUS is based on whether the final index value is greater than, equal to or less than the initial index value, which will
be the lowest index closing value during the initial observation period. If the underlying index has appreciated in value
from the initial index value determined during the initial observation period, 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. However,
if the underlying index has depreciated in value, investors will lose 1% for every 1% decline in the underlying index from
the initial index value. The 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 lookback feature used in determining
the initial index value and the leverage feature, which applies to a limited range of positive performance of the underlying index.
Investors may lose their entire initial investment in the PLUS. The PLUS are notes issued as part of MSFL’s Series
A Global Medium-Term Notes program.
All payments on the PLUS are subject to our credit risk.
If we default on our obligations, you could lose some or all of your investment. These 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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November 12, 2021
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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 final index value is greater than initial index value,
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$1,000 + leveraged upside payment
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In no event will the payment at maturity exceed the maximum payment at maturity.
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If final index value is less than or equal to initial index value,
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$1,000 × index performance factor
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Under these circumstances, the payment at maturity will be less than or equal to the stated principal amount of $1,000.
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Leveraged upside payment:
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$1,000 × leverage factor × index percent increase
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Index percent increase:
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(final index value – initial index value) / initial index value
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Initial index value:
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The lowest index closing value during the initial observation period. In no event will the initial index value be greater than , which is the index closing value on the pricing date.
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Initial observation period:
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Each index business day on which there is no market disruption event with respect to the underlying index during the approximately 1-month period from and including the pricing date to and including November 30, 2020.
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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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November 8, 2021, subject to adjustment for non-index business days and certain market disruption events
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Leverage factor:
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200%
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Index performance factor:
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final index value / initial index value
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Maximum payment at maturity:
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$1,080 per PLUS (108% of the stated principal amount).
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Stated principal amount:
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$1,000 per PLUS
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Issue price:
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$1,000 per PLUS (see “Commissions and issue price” below)
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Pricing date:
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October 30, 2020
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Original issue date:
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November 4, 2020 (3 business days after the pricing date)
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CUSIP / ISIN:
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61771EEL8 / US61771EEL83
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Listing:
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The 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
$968.00 per PLUS, or within $25.00 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(1)
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Agent’s commissions and fees(2)
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Proceeds to us(3)
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Per PLUS
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$1,000
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$
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$
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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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The PLUS will be sold only to investors purchasing
the PLUS in fee-based advisory accounts.
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(2)
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MS & Co. expects to sell all of the PLUS that
it purchases from us to an unaffiliated dealer at a price of $ per PLUS, for further sale to certain fee-based advisory accounts
at the price to public of $1,000 per PLUS. MS & Co. will not receive a sales commission with respect to the PLUS. 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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(3)
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See “Use of proceeds and hedging” on page
15.
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The PLUS
involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page
7.
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 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 PLUS” and “Additional Information About the 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
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Investment Summary
Performance Leveraged Upside Securities
The Lookback Entry PLUS Based on the Value of the S&P 500®
Index due November 12, 2021 (the “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 positive performance
of the underlying index relative to the lowest closing value of the underlying index during the initial observation period.
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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, subject to the maximum payment
at maturity, while using fewer dollars by taking advantage of the leverage factor.
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The PLUS are exposed on a 1:1 basis to the negative performance
of the underlying index.
Maturity:
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Approximately 1 year
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Leverage factor:
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200%
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Maximum payment at maturity:
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$1,080 per PLUS (108% of the stated principal amount).
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Minimum payment at maturity:
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None. Investors may lose their entire initial investment in the PLUS.
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Limited lookback feature:
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The initial index value will be the lowest index value during the approximately 1-month initial observation period.
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Coupon:
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None
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The original issue price of each PLUS is $1,000.
This price includes costs associated with issuing, selling, structuring and hedging the PLUS, which are borne by you, and, consequently,
the estimated value of the PLUS on the pricing date will be less than $1,000. We estimate that the value of each PLUS on the pricing
date will be approximately $968.00, or within $25.00 of that estimate. Our estimate of the value of the 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 PLUS on the pricing date, we
take into account that the PLUS comprise both a debt component and a performance-based component linked to the underlying index.
The estimated value of the 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 PLUS?
In determining the economic terms of the PLUS,
including the leverage 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 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 PLUS?
The price at which MS & Co. purchases the
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 PLUS are not fully
deducted upon issuance, for a period of up to 6 months
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
following the issue date, to the extent that
MS & Co. may buy or sell the 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 PLUS, and, if it once chooses to make a market, may cease doing so at any time.
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Key Investment Rationale
The PLUS offer investors exposure to the performance of the S&P
500® Index. In exchange for enhanced performance of 200% of the appreciation of the underlying index, investors
forgo performance above the maximum payment at maturity of $1,080 per PLUS. The payment at maturity on the PLUS is based on whether
the final index value is greater than, equal to or less than the initial index value, which will be lowest index closing value
during the initial observation period. If the underlying index has appreciated in value, investors will receive the stated
principal amount of their investment plus upside performance of the underlying index, subject to the maximum payment at maturity
of $1,080 per PLUS. However, if the underlying index has depreciated in value from the initial index value, investors will
lose 1% for every 1% decline. Investors may lose their entire initial investment in the PLUS.
Leveraged Performance
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The PLUS offer investors an opportunity to capture enhanced returns relative to a direct investment in the underlying index within a certain range of positive performance.
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Initial Observation Period
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The payment at maturity on the PLUS is based on whether the final index value is greater than, equal to or less than the initial index value, which will be lowest index closing value during the initial observation period. If the index closing value declines from the index closing value on the pricing date during the initial observation period, which consists of each index business day on which there is no market disruption event with respect to the underlying index during the approximately 1-month period from and including the pricing date to and including November 30, 2020, the payment at maturity will be determined by reference to the lowest index closing value during this period.
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Upside Scenario
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The underlying index increases in value from the initial index value determined during the initial observation period, and, at maturity, the PLUS redeem for the stated principal amount of $1,000 plus 200% of the index percent increase, subject to the maximum payment at maturity of $1,080 per PLUS (108% of the stated principal amount).
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Downside Scenario
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The underlying index declines in value from the initial index value determined during the initial observation period, and, at maturity, the PLUS redeem for less than the stated principal amount by an amount that is proportionate to the percentage decrease of the underlying index from the initial index value.
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
How PLUS Work
Payoff Diagram
The payoff diagram below illustrates the payment at maturity
on the PLUS based on the following terms:
Stated principal amount:
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$1,000 per PLUS
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Leverage factor:
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200%
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Maximum payment at maturity:
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$1,080 per PLUS (108% of the stated principal amount).
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PLUS Payoff Diagram
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How it works
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§
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Upside Scenario. If the final index value is greater than the initial index value,
then investors would receive the $1,000 stated principal amount plus 200% of the appreciation of the underlying index from the
initial index value, subject to the maximum payment at maturity. Under the terms of the PLUS, an investor would realize the maximum
payment at maturity at a final index value of 104% of the initial index value.
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§
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If the underlying index appreciates 2%, the investor would receive a 4% return, or $1,040 per PLUS.
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§
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If the underlying index appreciates 40%, the investor would receive only the maximum payment at maturity of $1,080 per PLUS,
or 108% of the stated principal amount.
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§
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Downside Scenario. If the final index value is less than or equal to the initial
index value, the investor would receive an amount less than or equal to the $1,000 stated principal amount, based on a 1% loss
of principal for each 1% decline in the underlying index from the initial index value.
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§
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If the underlying index depreciates 30% from the initial index value, the investor would lose 30% of the investor’s principal
and receive only $700 per PLUS at maturity, or 70% of the stated principal amount.
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
How the initial index value is determined
The following hypothetical examples are for illustrative purposes
only, and demonstrate how the initial index value is determined, depending on the value of the underlying index during the initial
observation period.
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§
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Appreciation in value. The underlying index appreciates in value during the initial
observation period so that the closing value of the underlying index on each day during the initial observation period is greater
than the index closing value on the pricing date. In this scenario, the initial index value will be the index closing value on
the pricing date, regardless of the appreciation in the value of the underlying index during the initial observation period.
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§
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Depreciation in value by 10%. The underlying index depreciates in value during
the initial observation period and its lowest closing value during that period is 90% of the index closing value on the pricing
date. In this scenario, the initial index value will be equal to 90% of the index closing value on the pricing date.
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Risk Factors
The following is a non-exhaustive list of certain key risk
factors for investors in the 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 PLUS.
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§
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The PLUS do not pay interest or guarantee return of any principal. The terms of the PLUS differ from those of ordinary
debt securities in that the PLUS do not pay interest or guarantee payment of any portion of the principal amount at maturity. If
the final index value is less than the initial index value, the payout at maturity will be an amount in cash that is less than
the $1,000 stated principal amount of each PLUS by an amount proportionate to the decrease in the value of the underlying index
from the initial index value, and may be zero. You could lose your entire investment in the PLUS.
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§
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The appreciation potential of the PLUS is limited by the maximum payment at maturity. The appreciation potential of
the PLUS is limited by the maximum payment at maturity of $1,080 per PLUS, or 108% of the stated principal amount. Although the
leverage factor provides 200% exposure to any increase in the value of the underlying index as of the valuation date above the
initial index value, because the payment at maturity will be limited to 108% of the stated principal amount for the PLUS, any increase
in the final index value over the initial index value by more than 4% of the initial index value will not further increase the
return on the PLUS.
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The initial index value will not be determined until the end of the initial observation period. Because the initial
index value will be the lowest index closing value during the initial observation period, the initial index value will not be determined
until the end of the initial observation period. The initial observation period is each index business day on which there is no
market disruption event with respect to the underlying index during the approximately 1-month period from and including the pricing
date to and including November 30, 2020. Accordingly, you will not know the initial index value for a significant period of time
after the pricing date. There can be no assurance that the index closing value will decline during the initial observation period
below the index closing value on the pricing date. Furthermore, even if the index closing value declines during the initial observation
period below its index closing value on the pricing date, there can be no assurance that the final index value will be greater
than the initial index value so that you earn a positive return on the PLUS at maturity, or that you will not lose some or all
of your investment.
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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 PLUS in the secondary market and the price at which MS & Co. may be willing to purchase or
sell the PLUS in the secondary market, including the value of the underlying index (in particular, during the initial observation
period), volatility 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 and any actual or anticipated changes in our credit
ratings or credit spreads. The level 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 PLUS if you try to sell your PLUS prior
to maturity.
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§
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The 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 PLUS. You are dependent on our ability to pay all amounts due on the PLUS at maturity
and therefore you are subject to our credit risk. If we default on our obligations under the 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 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 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
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
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 final index value is not based on the value of the underlying index at any time other than the valuation date. The
final index value will be based on 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 to below the initial index value, the payment at maturity will be less, and may be significantly
less, than it would have been had the payment at maturity been linked to the value of the 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 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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§
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Investing in the PLUS is not equivalent to investing in the underlying index. Investing in the PLUS is not equivalent
to investing in the underlying index or its component stocks. Investors in the 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 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 will be permitted to consider indices that are calculated and published
by the calculation agent or any of its affiliates.
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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 PLUS in the original issue price reduce the economic terms of the PLUS, cause
the estimated value of the 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 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.
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The inclusion of the costs of issuing,
selling, structuring and hedging the PLUS in the original issue price and the lower rate we are willing to pay as issuer make the
economic terms of the PLUS less favorable to you than they otherwise would be.
However, because the costs associated
with issuing, selling, structuring and hedging the 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 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.
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§
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The estimated value of the 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 PLUS than those generated by others, including other dealers in the market, if they attempted to value the
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 PLUS in the secondary market (if any exists) at any time. The value of your 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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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
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§
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The PLUS will not be listed on any securities exchange and secondary trading may be limited. The PLUS will not be listed
on any securities exchange. Therefore, there may be little or no secondary market for the PLUS. MS & Co. may, but is not obligated
to, make a market in the PLUS. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or
sell the PLUS easily. Because we do not expect that other broker-dealers will participate significantly in the secondary market
for the PLUS, the price at which you may be able to trade your 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 PLUS, it is likely that there would
be no secondary market for the PLUS. Accordingly, you should be willing to hold your PLUS to maturity.
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§
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Hedging and trading activity by our affiliates could potentially adversely affect the value of the PLUS. One or more
of our affiliates and/or third-party dealers expect to carry out hedging activities related to the 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 PLUS, and the hedging strategy may involve greater and more frequent dynamic adjustments
to the hedge as the valuation date approaches. MS & Co. and 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 prior to or during the initial observation period could potentially
increase the initial index value and, therefore, could increase 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 PLUS. Additionally, such hedging or
trading activities during the term of the 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 calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect
to the PLUS. As calculation agent, MS & Co. will determine the initial index value and 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 initial index value or 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”
and related definitions in the accompanying product supplement.
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The U.S. federal income tax consequences of an investment in the 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 PLUS. If the Internal Revenue Service (the “IRS”)
were successful in asserting an alternative treatment, the timing and character of income on the 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 PLUS as debt instruments. In that event, U.S. Holders would be required to accrue into income original issue
discount on the PLUS every year at a “comparable yield” determined at the time of issuance and recognize all income
and gain in respect of the 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 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). We do not plan to request a ruling from the IRS regarding the tax treatment of the PLUS, and the IRS or a court may
not agree with the tax treatment described in the Tax Disclosure Sections.
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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-
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
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 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 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
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
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 October 21, 2020:
Bloomberg Ticker Symbol:
|
SPX
|
Current Index Value:
|
3,435.56
|
52 Weeks Ago:
|
3,006.72
|
52 Week High (on 9/2/2020):
|
3,580.84
|
52 Week Low (on 3/23/2020):
|
2,237.40
|
|
|
The following graph sets forth the daily closing values of the
underlying index for the period from January 1, 2015 through October 21, 2020. 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 closing value of the underlying index on October 21, 2020 was 3,435.56. 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, and you should not take the historical values of the underlying index as an indication of its future performance.
Underlying Index Historical
Performance
Daily Closing Values
January 1, 2015 to October 21, 2020
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
S&P 500® Index
|
High
|
Low
|
Period End
|
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
|
3,025.86
|
2,840.60
|
2,976.74
|
Fourth Quarter
|
3,240.02
|
2,887.61
|
3,230.78
|
2020
|
|
|
|
First Quarter
|
3,386.15
|
2,237.40
|
2,584.59
|
Second Quarter
|
3,232.39
|
2,470.50
|
3,100.29
|
Third Quarter
|
3,580.84
|
3,115.86
|
3,363.00
|
Fourth Quarter (through October 21, 2020)
|
3,534.22
|
3,348.44
|
3,435.56
|
|
|
|
|
“Standard & Poor’s®,” “S&P®,”
“S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of
Standard and Poor’s Financial Services LLC. For more information, see “S&P 500® Index” in
the accompanying index supplement.
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Additional Terms of the 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 publisher:
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S&P Dow Jones Indices LLC or any successor thereof
|
Denominations:
|
$1,000 per PLUS and integral multiples thereof
|
Trustee:
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The Bank of New York Mellon
|
Calculation agent:
|
MS & Co.
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Interest:
|
None
|
Bull market or bear market PLUS:
|
Bull market PLUS
|
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 is postponed and falls less than two business days prior to the scheduled maturity date, the maturity date of the PLUS will be postponed to the second business day following that valuation date as postponed.
|
Discontinuance of the underlying index during the initial observation period:
|
If the underlying index publisher discontinues publication of the underlying index during the initial observation period and the calculation agent determines, in its sole discretion, that no successor index is available at such time, the calculation agent will determine the initial index value based on the index closing value(s) of the underlying index during the initial observation period prior to such discontinuance.
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Issuer notice to registered security holders, the trustee and the depositary
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In the event that the maturity date is postponed due to postponement
of the valuation date, the issuer shall give notice of such postponement and, once it has been determined, of the date to which
the maturity date has been rescheduled (i) to each registered holder of the PLUS by mailing notice of such postponement by first
class mail, postage prepaid, to such registered holder’s last address as it shall appear upon the registry books, (ii) to
the trustee by facsimile confirmed by mailing such notice to the trustee by first class mail, postage prepaid, at its New York
office and (iii) to The Depository Trust Company (the “depositary”) by telephone or facsimile, confirmed by mailing
such notice to the depositary by first class mail, postage prepaid. Any notice that is mailed to a registered holder of the PLUS
in the manner herein provided shall be conclusively presumed to have been duly given to such registered holder, whether or not
such registered holder receives the notice. The issuer shall give such notice as promptly as possible, and in no case later than
(i) with respect to notice of postponement of the maturity date, the business day immediately preceding the scheduled maturity
date and (ii) with respect to notice of the date to which the maturity date has been rescheduled, the business day immediately
following the actual valuation date for determining the final index value.
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 stated principal
amount of the 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 PLUS to the trustee for delivery to the depositary, as holder of the PLUS, on
the maturity date.
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Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
Additional Information About the PLUS
Additional Information:
|
|
Minimum ticketing size:
|
$1,000 / 1 PLUS
|
Tax considerations:
|
Although there is uncertainty
regarding the U.S. federal income tax consequences of an investment in the 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 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 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 PLUS prior to settlement, other than pursuant
to a sale or exchange.
§ Upon
sale, exchange or settlement of the 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 PLUS. Such gain or loss should be long-term capital gain or loss if the investor
has held the 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 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, pursuant
to an IRS notice, Section 871(m) will not apply to securities issued before January 1, 2023 that do not have a delta of one with
respect to any Underlying Security. Based on the terms of the
|
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
|
PLUS and
current market conditions, we expect that the 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 PLUS do not
have a delta of one with respect to any Underlying Security, our counsel is of the opinion that the 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 PLUS.
Both U.S.
and non-U.S. investors considering an investment in the 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 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 PLUS.
|
Use of proceeds and hedging:
|
The proceeds from the sale of the PLUS will be used by us for
general corporate purposes. We will receive, in aggregate, $1,000 per PLUS issued, because, when we enter into hedging transactions
in order to meet our obligations under the PLUS, our hedging counterparty will reimburse the cost of the agent’s commissions.
The costs of the 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 PLUS.
Prior to or during the initial observation period, we will hedge
our anticipated exposure in connection with the 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 or options contracts
on the underlying index or any other securities or instruments they may wish to use in connection with such hedging. Such purchase
activity could potentially increase the initial index value, and therefore could increase 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 PLUS. In addition,
through our affiliates, we are likely to modify our hedge position throughout the term of the 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 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
|
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
|
affect the value of the underlying index, and, therefore, adversely affect the value of the 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 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 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 Section
4975 of the Code 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 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 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 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 PLUS.
Because we may be considered
a party in interest with respect to many Plans, the 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 PLUS will be deemed to have represented, in its
|
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
|
corporate and its fiduciary
capacity, by its purchase and holding of the PLUS that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing
such 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 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 PLUS on behalf of or with “plan assets” of any
Plan consult with their counsel regarding the availability of exemptive relief.
The PLUS are contractual
financial instruments. The financial exposure provided by the 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 PLUS. The 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 PLUS.
Each purchaser or holder
of any 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 PLUS, (B) the purchaser or holder’s investment in the PLUS, or
(C) the exercise of or failure to exercise any rights we have under or with respect to the 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 PLUS
and (B) all hedging transactions in connection with our obligations under the 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 PLUS has exclusive responsibility for ensuring that its purchase, holding and disposition of the PLUS do not violate the
prohibited transaction rules of ERISA or the Code or any Similar Law. The sale of any 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 PLUS should consult and rely on their own counsel and advisers as to whether an investment in the 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
|
Morgan Stanley Finance LLC
Lookback Entry PLUS Based on the Value of the S&P 500® Index due November 12, 2021
Performance Leveraged Upside SecuritiesSM
|
investment of their accounts, will not be permitted to purchase or hold the 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 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 PLUS, either directly or indirectly.
|
Supplemental information regarding plan of distribution; conflicts of interest:
|
MS & Co. expects to sell all of the PLUS that it purchases
from us to an unaffiliated dealer at a price of $ per PLUS, for further sale to certain fee-based advisory accounts at the price
to public of $1,000 per PLUS. MS & Co. will not receive a sales commission with respect to the 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 PLUS. When MS & Co. prices this offering of PLUS, it will determine the economic terms of the PLUS such that for each 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.
|
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 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 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 SecuritiesSM”
and “PLUSSM” are our service marks.
|
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