MORGAN STANLEY — Capital/Financing Update 2010

Aug 31, 2010

CALCULATION OF REGISTRATION FEE — Title of Each Class of Securities Offered	Maximum Aggregate Offering Price	Amount of Registration Fee
Buffered Return Enhanced Notes due 2011	$10,319,000	$735.74

Pricing Supplement To prospectus dated December 23, 2008, and prospectus supplement for leveraged index-linked securities dated June 1, 2009 Pricing Supplement No. 505 Registration Statement No. 333-156423 Dated August 27, 2010; Rule 424(b)(2)

Structured Investments
$10,319,000
Buffered Return Enhanced Notes Linked to the Dow Jones EURO STOXX 50 ® Index due March 3, 2011

General

· The notes are designed for investors who seek a return of twice the appreciation of the Dow Jones EURO STOXX 50 ® Index up to a Maximum Total Return on the notes of 10.80% at maturity. Investors should be willing to forgo interest and dividend payments and, if the Index declines by more than 8%, be willing to lose some or all of their principal.

· Senior unsecured obligations of Morgan Stanley maturing March 3, 2011 † . All payments on the notes are subject to the credit risk of Morgan Stanley.

· Minimum purchase of $10,000. Minimum denominations of $1,000 and integral multiples thereof.

· The notes priced on August 27 , 2010 and are expected to settle on or about September 3 , 2010.

Key Terms

Index:	The Dow Jones EURO STOXX 50 ® Index (the “Index”)
Upside Leverage Factor:	2
Payment at Maturity:	If the Ending Index Level is greater than the Initial Index Level, you will receive a cash payment that provides you with a return per $1,000 principal amount note equal to the Index Return multiplied by two, subject to a Maximum Total Return on the notes of 10.80%. For example, if the Index Return is more than 5 . 4%, you will receive the Maximum Total Return on the notes of 10.80%, which entitles you to a maximum payment at maturity of $1,108 for every $1,000 principal amount note that you hold. Accordingly, if the Index Return is positive, your payment per $1,000 principal amount note will be calculated as follows, subject to the Maximum Total Return:
	$1,000 +[$1,000 x (Index Return x 2)]
	Your principal is protected against up to a 8% decline of the Index at maturity subject to the credit risk of Morgan Stanley. If the Ending Index Level declines from the Initial Index Level by 8% or less, you will receive the principal amount of your notes at maturity. If the Ending Index Level declines from the Initial Index Level by more than 8%, you will lose 1.087% of the principal amount of your notes for every 1% that the Index declines below 8% of the Initial Index Level and your final payment per $1,000 principal amount note will be calculated as follows:
	$1,000 + [$1,000 x (Index Return + 8%) x 1.087]
	You will lose some or all of your investment at maturity if the Ending Index Level declines from the Initial Index Level by more than 8% .
Buffer Amount:	8%
Downside Factor:	1.087
Index Return:	The performance of the Index from the Initial Index Level to the Ending Index Level, calculated as follows:
	Ending Index Level – Initial Index Level
	Initial Index Level
	The Index Return may be positive or negative.
Initial Index Level:	2,630.35, which was the index closing level on the pricing date.
Ending Index Level:	The arithmetic average of the Index closing levels on each of the five Averaging Dates.
Averaging Dates † :	February 22, 2011 , February 23, 2011 , February 24, 2011 , February 25, 2011 and February 28, 2011
Maturity Date † :	March 3, 2011
Listing:	The notes will not be listed on any securities exchange.
CUSIP / ISIN:	617482NE0 / US617482NE07

† Subject to postponement in the event of a market disruption event as described in the accompanying prospectus supplement for leveraged index-linked securities.

Investing in the Buffered Return Enhanced Notes involves a number of risks. See “Risk Factors” beginning on page S-20 of the accompanying prospectus supplement for leveraged index-linked securities and “Selected Risk Considerations” beginning on page 5 of this pricing supplement .

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the notes or passed upon the accuracy or the adequacy of this pricing supplement or the accompanying prospectus supplement for leveraged index-linked securities and the prospectus. Any representation to the contrary is a criminal offense.

	Price to Public (1)	Fees and Commissions (2)	Proceeds to Issuer
Per note	$1,000	$5	$995
Total	$10,319,000	$51,595	$10,267,405
(1) Certain fiduciary accounts will pay a purchase price of $995 per note, and the placement agents with respect to sales made to such accounts will forgo any fees. (2) JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc., acting as placement agents for the notes, will receive a fee from the Company of $5 per $1,000 principal amount note, but will forgo any fees for sales to fiduciary accounts. The total fees represent the amount that the placement agents received from accounts other than such fiduciary accounts.

The notes are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.

JPMorgan

Placement Agent

August 27, 2010

ADDITIONAL TERMS SPECIFIC TO THE NOTES

You should read this pricing supplement together with the prospectus dated December 23, 2008, as supplemented by the prospectus supplement for leveraged index-linked securities dated June 1, 2009. These Buffered Return Enhanced Notes are an issuance of our leveraged index-linked securities and their terms are further described in the prospectus supplement for leveraged index-linked securities. This pricing supplement, together with the documents listed below, contains the terms of the notes, supplements the preliminary terms related hereto dated August 26, 2010 and supersedes all other prior or contemporaneous oral statements as well as any other written materials including preliminary or indicative pricing terms, correspondence, trade ideas, structures for implementation, sample structures, fact sheets, brochures or other educational materials of ours. You should carefully consider, among other things, the matters set forth in “Risk Factors” in the accompanying prospectus supplement for leveraged index-linked securities, as the notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal, tax, accounting and other advisers in connection with your investment in the notes.

You may access these documents on the SEC website at . www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC website):

· Prospectus Supplement for Leveraged Index-Linked Securities dated June 1, 2009:

EFPlaceholder http://www.sec.gov/Archives/edgar/data/895421/000095010309001266/dp13570_424b2.htm

· Prospectus dated December 23, 2008:

EFPlaceholder http://www.sec.gov/Archives/edgar/data/895421/000095010308003004/dp12129_424b2-debt.htm

Terms used in this pricing supplement are defined in the prospectus supplement for leveraged index-linked securities or in the prospectus. As used in this pricing supplement, the “Company,” “we,” “us” or “our” refer to Morgan Stanley.

What is the Total Return on the Notes at Maturity Assuming a Range of Performance for the Index?

The following table and graph illustrate the hypothetical total return at maturity on the notes. The “total return” as used in this pricing supplement is the number, expressed as a percentage, that results from comparing the payment at maturity per $1,000 principal amount note to $1,000. The hypothetical total returns set forth below assume an Initial Index Level of 2,500 and reflect the Maximum Total Return on the notes of 10.80%. The hypothetical total returns set forth below are for illustrative purposes only and may not be the actual total returns applicable to a purchaser of the notes. The numbers appearing in the following table, graph and examples have been rounded for ease of analysis.

Ending Index Level	Index Return	Total Return on Notes
4 , 500 .00	80.00%	10.80%
4 , 125 .00	65.00%	10.80%
3 , 750 .00	50.00%	10.80%
3 , 500 .00	40.00%	10.80%
3 , 250 .00	30.00%	10.80%
3 ,000.00	20.00%	10.80%
2 , 750 .00	10.00%	10.80%
2 , 635 .00	5.40%	10.80%
2 , 562.5 0	2.50%	5.00%
2 , 525 .00	1.00%	2.00%
2 , 500 .00	0.00%	0.00%
2 , 375 .00	-5.00%	0.00%
2,300.00	- 8.00%	0.00%
2 ,000.00	-20.00%	-13.04%
1 , 750 .00	-30.00%	-23 . 91%
1 , 500 .00	-40.00%	-34 . 78%
1 , 250 .00	-50.00%	-45 . 65%
1 ,000.00	-60.00%	-56 . 52%
750 .00	-70.00%	-67 . 39%
500 .00	-80.00%	-78 . 26%
250 .00	-90.00%	-89 . 13%
0	-100.00%	-100.00%

2

Hypothetical Examples of Amounts Payable at Maturity

The following examples illustrate how the total returns set forth in the table and graph above are calculated.

Example 1: The level of the Index increases from the Initial Index Level of 2,500 to an Ending Index Level of 2, 625 . Because the Ending Index Level of 2,625 is greater than the Initial Index Level of 2,500 and the Index Return of 5% multiplied by 2 does not exceed the Maximum Total Return of 10.80%, the investor receives a payment at maturity of $1,100 per $1,000 principal amount note calculated as follows:

$1,000 + [$1,000 x (5% x 2)] = $1,100

Example 2: The level of the Index decreases from the Initial Index Level of 2,500 to an Ending Index Level of 2,300. Because the Ending Index Level of 2,300 is less than the Initial Index Level of 2,500 by not more than the Buffer Amount of 8%, the investor will receive a payment at maturity of $1,000 per $1,000 principal amount note.

Example 3: The level of the Index increases from the Initial Index Level of 2,500 to an Ending Index Level of 2,875. Because the Index Return of 15% multiplied by 2 exceeds the Maximum Total Return of 10.80%, the investor receives a payment at maturity of $1,108 per $1,000 principal amount note, the maximum payment on the notes.

Example 4: The level of the Index decreases from the Initial Index Level of 2,500 to an Ending Index Level of 2,000. Because the Ending Index Level of 2,000 is less than the Initial Index Level of 2,500 by more than the Buffer Amount of 8%, the Index Return is negative and the investor will receive a payment at maturity of $869.56 per $1,000 principal amount note calculated as follows:

$1,000 + [$1,000 x (-20% + 8%) x 1.087] = $869.56

3

Selected Purchase Considerations

· APPRECIATION POTENTIAL – The notes provide the opportunity to enhance equity returns by multiplying a positive Index Return by two, up to the Maximum Total Return on the notes of 10.80%, or $1,108 for every $1,000 principal amount note. Because the notes are our senior unsecured obligations, payment of any amount at maturity is subject to our ability to pay our obligations as they become due.

· LIMITED PROTECTION AGAINST LOSS – Payment at maturity of the principal amount of the notes is protected against a decline in the Ending Index Level, as compared to the Initial Index Level, of up to 8%. However, if the Ending Index Level declines by more than 8% of the Initial Index Level, for every 1% decline of the Index below 8% of the Initial Index Level, you will lose an amount equal to 1.087% of the principal amount of your notes.

· DIVERSIFICATION OF THE DOW JONES EURO STOXX 50 ® INDEX – The return on the notes is linked to the Dow Jones EURO STOXX 50 ® Index. The Dow Jones EURO STOXX 50 ® Index consists of 50 component stocks of market sector leaders from Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain. It is a free float adjusted market capitalization index representing the largest companies of the aforementioned countries across all market sectors. For additional information about the Index, see the information set forth under “Underlying Indices and Underlying Index Publishers Information— Dow Jones EURO STOXX 50 ® Index” in Annex A of the accompanying prospectus supplement for leveraged index-linked securities.

· CAPITAL GAINS TAX TREATMENT – You should review carefully the section entitled “United States Federal Taxation” in the accompanying prospectus supplement for leveraged index-linked securities, which contains the opinion of our special tax counsel, Davis Polk & Wardwell LLP, with respect to the tax consequences of an investment in the notes. Under current law and based on that opinion, subject to the conditions and limitations set forth in the section entitled “United States Federal Taxation” in the accompanying prospectus supplement for leveraged index-linked securities, we believe that it is reasonable to treat your purchase and ownership of the notes as an “open transaction” for U.S. federal income tax purposes. Assuming this characterization is respected, your gain or loss on the notes should be treated as short-term capital gain or loss, even if you are an initial purchaser of notes at a price that is below the principal amount of the notes. The Internal Revenue Service (the “IRS”) or a court, however, may not respect this characterization or treatment of the notes, in which case the timing and character of any income or loss on the notes could be significantly and adversely affected. The risk that buffered notes would be recharacterized, for U.S. federal income tax purposes, as debt instruments giving rise to ordinary income, rather than as an open transaction, is higher than with other equity-linked notes that do not provide for the return of principal. On December 7, 2007, the 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 on whether to require holders of instruments such as the notes 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 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 any income (including any mandated accruals) realized by non-U.S. holders should be subject to withholding tax; and whether these investments are or should be subject to the “constructive ownership” regime, which very generally can operate to recharacterize certain long-term capital gains as ordinary income that is subject to an interest charge. While the notice requests comments on appropriate transition rules and effective dates, Treasury regulations or other forms of guidance, if any, issued after consideration of these issues could materially and adversely affect the tax consequences of this kind of investment, possibly with retroactive effect. You should consult your tax adviser regarding the treatment of the notes, including possible alternative characterizations in general and the possible impact of this notice in particular.

4

Selected Risk Considerations

An investment in the notes involves significant risks. Investing in the notes is not equivalent to investing directly in the Index or any of the component stocks of the Index. These risks are explained in more detail in the “Risk Factors” section of the accompanying prospectus supplement for leveraged index-linked securities.

· YOUR INVESTMENT IN THE NOTES MAY RESULT IN A LOSS – The notes do not guarantee any return of principal. The return on the notes at maturity is linked to the performance of the Index and will depend on whether, and the extent to which, the Index Return is positive or negative. Your investment will be exposed on a leveraged basis of 1.087% to each 1% decline in the Ending Index Level below the 8% Buffer Amount as compared to the Initial Index Level.

· YOUR MAXIMUM GAIN ON THE NOTES IS LIMITED TO THE MAXIMUM TOTAL RETURN – If the Ending Index Level is greater than the Initial Index Level, for each $1,000 principal amount note, you will receive at maturity $1,000 plus an additional amount that will not exceed the Maximum Total Return of 10.80% on the $1,000 stated principal amount, regardless of the appreciation in the Index, which may be significant.

· THE NOTES DO NOT PAY INTEREST – Unlike ordinary debt securities, the notes do not pay interest and do not guarantee any return of principal at maturity.

· NO DIVIDEND PAYMENTS OR VOTING RIGHTS – As a holder of the notes, you will not have voting rights or rights to receive cash dividends or other distributions or other rights that holders of securities composing the Dow Jones EURO STOXX 50 ® Index would have.

· THE NOTES ARE SUBJECT TO THE CREDIT RISK OF MORGAN STANLEY, AND ANY ACTUAL OR ANTICIPATED CHANGES TO ITS CREDIT RATINGS OR CREDIT SPREADS MAY ADVERSELY AFFECT THE MARKET VALUE OF THE NOTES – You are dependent on Morgan Stanley’s ability to pay all amounts due on the notes at maturity, and therefore you are subject to the credit risk of Morgan Stanley. If Morgan Stanley defaults on its obligations under the notes, your investment would be at risk and you could lose some or all of your investment. As a result, the market value of the notes prior to maturity will be affected by changes in the market’s view of Morgan Stanley's creditworthiness. Any actual or anticipated decline in Morgan Stanley’s credit ratings or increase in the credit spreads charged by the market for taking Morgan Stanley credit risk is likely to adversely affect the market value of the notes.

· CERTAIN BUILT-IN COSTS ARE LIKELY TO ADVERSELY AFFECT THE VALUE OF THE NOTES PRIOR TO MATURITY – While the payment at maturity described in this pricing supplement is based on the full stated principal amount of your notes, the original issue price of the notes will include the agents’ commissions and the cost of hedging our obligations under the notes through one or more of our affiliates. The cost of hedging includes the projected profit that our subsidiaries may realize in consideration for assuming the risks inherent in managing the hedging transactions. As a result, the price, if any, at which affiliates of Morgan Stanley will be willing to purchase notes from you in secondary market transactions, if at all, will likely be significantly lower than the original issue price, and any sale prior to the maturity date could result in a substantial loss to you. Secondary market prices are also likely to be reduced by the costs of unwinding the related hedging transactions. The notes are not designed to be short-term trading instruments. Accordingly, you should be able and willing to hold your notes to maturity.

· RISKS ASSOCIATED WITH INVESTMENTS IN SECURITIES INDEXED TO THE VALUE OF FOREIGN EQUITY SECURITIES – Investments in securities indexed to the value of foreign equity securities, such as the securities composing the Index, involve risks associated with the securities markets in those countries, including the risk of volatility in those markets, governmental intervention in those markets and cross-shareholdings in companies in certain countries. Foreign companies are subject to accounting, auditing and financial reporting standards and requirements different from those applicable to U.S. reporting companies.

· LACK OF LIQUIDITY – The notes will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the notes. Morgan Stanley & Co. Incorporated (“MS & Co.”) may, but is not obligated to, make a market in the notes. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the notes easily. Because we do not expect that other broker-dealers will participate significantly in the secondary market for the notes, the price at which you may be able to trade your notes is likely to depend on the price, if any, at which MS & Co. is willing to transact. If, at any time, MS & Co. were not to make a market in the notes, it is likely that there would be no secondary market for the notes. Accordingly, you should be willing to hold your notes to maturity.

· POTENTIAL CONFLICTS –We and our affiliates play a variety of roles in connection with the issuance of the notes, including acting as calculation agent and hedging our obligations under the notes. In performing these duties, the economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the notes. We will not have any obligation to consider your interests as a holder of the notes in taking any corporate action that might affect the level of the Index and the value of the notes.

5

· MANY ECONOMIC AND MARKET FACTORS WILL IMPACT THE VALUE OF THE NOTES – In addition to the level of the Index on any day, the value of the notes will be affected by a number of economic and market factors that may either offset or magnify each other, including:

· the expected volatility of the Index;

· the time to maturity of the notes;

· the dividend rate on the common stocks underlying the Index;

· interest and yield rates in the market generally;

· geopolitical conditions and a variety of economic, financial, political, regulatory or judicial events; and

· our creditworthiness, including actual or anticipated changes in our credit ratings or credit spreads.

Use of Proceeds and Hedging

Part of the net proceeds we receive from the sale of the notes will be used in connection with hedging our obligations under the notes through one or more of our subsidiaries. The hedging or trading activities of our affiliates on or prior to the pricing date and on the Averaging Dates could affect the value of the Index in a way that reduces the amount you will receive on the notes at maturity.

Historical Information

The following graph sets forth the historical performance of the Dow Jones EURO STOXX 50 ® Index based on the weekly Index closing levels from January 1, 2005 through August 27, 2010. The Index closing level on August 27, 2010 was 2,630.35. We obtained the Index closing levels below from Bloomberg Financial Markets, without independent verification. We make no representation or warranty as to the accuracy or completeness of the information obtained from Bloomberg Financial Markets. The price source for determining the Ending Index Level will be the Bloomberg page “SX5E” or any successor page.

The historical levels of the Index should not be taken as an indication of future performance, and no assurance can be given as to the Index closing level on any of the Averaging Dates. We cannot give you assurance that the performance of the Index will result in the return of any of your initial investment.

Historical Performance of the Dow Jones EURO STOXX 50 ® Index

6

License Agreements

License Agreement between STOXX ® Limited and Morgan Stanley. “Dow Jones EURO STOXX 50 ® ” and “STOXX ® ” are registered trademarks of STOXX ® Limited and have been licensed for use for certain purposes by Morgan Stanley. See “Underlying Indices and Underlying Index Publishers Information—Dow Jones Euro STOXX 50 ® Index—License Agreement between STOXX Limited and Morgan Stanley” in Annex A of the accompanying prospectus supplement for leveraged index-linked securities.

Benefit Plan Investor Considerations

Your purchase of a note in a self-directed Individual Retirement Account (an “IRA”) will be deemed to be a representation and warranty by you that, as of the date of purchase (i) neither the issuer, the placement agent nor any of their respective affiliates has or exercises any discretionary authority or control or acts in a fiduciary capacity with respect to the investment of the assets of such self-directed IRA used to purchase the note or renders investment advice (within the meaning of Section 3(21)(A)(ii) of ERISA) with respect to any such IRA assets and (ii) in connection with the purchase of the note, such self-directed IRA will pay no more than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA), and, in making the foregoing representations and warranties, you have (x) applied sound business principles in determining whether fair market value will be paid, and (y) made such determination acting in good faith.

See “Benefit Plan Investor Considerations” in the prospectus supplement for leveraged index-linked securities.

7