MORGAN STANLEY — Capital/Financing Update 2010

Dec 3, 2010

December 2010 Filed pursuant to Rule 433 dated December 3, 2010 relating to Preliminary Pricing Supplement No. 604 dated December 3, 2010 to Registration Statement No. 333-156423

STRUCTURED INVESTMENTS

Opportunities in U.S. Equities

Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

Unlike ordinary debt securities, the notes only provide for the regular payment of interest for the first two years following their issuance. After the second year and until maturity, the notes will pay a contingent monthly coupon but only if the index closing value of the S&P 500 ® Index is at or above 925 on the related observation date. If the index closing value is less than the barrier level on any observation date, we will pay no interest for the related interest period. The notes are senior unsecured obligations of Morgan Stanley, and a ll payments on the notes, including the repayment of principal, are subject to the credit risk of Morgan Stanley.

SUMMARY TERMS — Issuer:	Morgan Stanley
Underlying index:	S&P 500 ® Index
Aggregate principal amount:	$
Stated principal amount:	$1,000 per note
Issue price:	$1,000 per note
Pricing date:	December 17, 2010
Original issue date:	December 22, 2010 (3 business days after the pricing date)
Maturity date:	December 22, 2025
Interest rate:	Years 1 and 2 : 7.50% per annum Years 3 through 15 : A contingent coupon of 7.50% per annum is paid monthly only if the closing value of the underlying index is at or above the barrier level on the related observation date . If on any observation date, the closing value of the underlying index is less than the barrier level, we will pay no coupon for the applicable interest period. It is possible that the underlying index could remain below the barrier level for extended periods of time or even throughout the period from the second year following the original issue date until maturity so that you will receive no contingent monthly coupons.
Barrier level:	925
Interest payment dates:	The 22nd day of each month, beginning January 22, 2011; provided that if any such day is not a business day, that interest payment will be made on the next succeeding business day and no adjustment will be made to any interest payment made on that succeeding business day
Observation dates:	The third business day preceding each interest payment date, beginning with the January 22, 2013 interest payment date, subject to postponement for non-index business days and certain market disruption events
Payment at maturity:	At maturity, you will receive an amount equal to the stated principal amount for each note you hold and accrued and unpaid interest, if any.
CUSIP:	617482PU2
ISIN:	US617482PU21
Listing:	The notes will not be listed on any securities exchange.
Agent:	Morgan Stanley & Co. Incorporated (“MS & Co.”), a wholly-owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest.”
Commissions and Issue Price:	Price to Public	Agent’s Commissions (1)	Proceeds to Issuer
Per note	$1,000	$	$
Total	$	$	$

(1) Selected dealers, including Morgan Stanley Smith Barney LLC (an affiliate of the agent), and their financial advisors will collectively receive from the Agent, MS & Co., a fixed sales commission of $ for each note they sell. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Description of Notes—Supplemental Information Concerning Plan of Distribution; Conflicts of Interest” in the accompanying preliminary pricing supplement.

You should read this document together with the preliminary pricing supplement describing the offering and the related prospectus supplement and prospectus, each of which can be accessed via the hyperlinks below, before you decide to invest.

EFPlaceholder Preliminary Pricing Supplement No. 604 dated December 3, 2010

EFPlaceholder Prospectus Supplement dated December 23, 2008

EFPlaceholder Prospectus dated December 23, 2008

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.

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-584-6837.

FWP: MSPRB1208006

Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

Investment Overview

Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025 (the “notes”) only provide for the regular payment of interest for the first two years following their issuance. After the second year and until maturity, the notes will pay a contingent monthly coupon but only if the index closing value of the S&P 500 ® Index is at or above 925, which we refer to as the barrier level, on the related observation date. If the index closing value is less than the barrier level on any observation date, we will pay no interest for the related interest period. It is possible that the index closing value could remain below the barrier level for extended periods of time or even throughout the period from the third year following the original issue date until maturity so that you will receive no contingent monthly coupons. We refer to the coupon on the notes as contingent, because there is no guarantee that you will receive a coupon payment on any interest payment date. Even if the underlying index were to be at or above the barrier level on some monthly observation dates, it may fluctuate below the barrier level on others. At maturity, you will receive an amount equal to the stated principal amount for each note you hold and accrued and unpaid interest, if any.

Maturity:	15 years
Interest rate:	Years 1 and 2 : 7.50% per annum Years 3 through 15 : A contingent coupon of 7.50% per annum is paid monthly only if the closing value of the underlying index is at or above the barrier level on the related observation date . If on any observation date, the closing value of the underlying index is less than the barrier level, we will pay no coupon for the applicable interest period.

S&P 500 ® Index Overview

The S&P 500 ® Index, which is calculated, maintained and published by Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc., consists of 500 component stocks 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 the 500 similar companies during the base period of the years 1941 through 1943.

Information as of market close on December 1, 2010:

Bloomberg Ticker Symbol:	SPX
Current Index Value:	1,206.07
52 Weeks Ago:	1,108.86
52 Week High (on 11/5/2010):	1,225.85
52 Week Low (on 7/2/2010):	1,022.58

Underlying Index Daily Closing Values January 1, 2005 to December 1, 2010

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Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

Key Investment Rationale

The notes only provide for the regular payment of interest during the two-year period following the original issue date. After the second year and until maturity, the notes will pay a contingent monthly coupon but only if the index closing value of the S&P 500 ® Index is at or above the barrier level on the related observation date. The notes have been designed for investors who are willing to forgo market floating interest rates and accept the risk of no interest payments after the second year in exchange for an opportunity to earn interest at a potentially above market rate if the S&P 500 ® Index closes at or above the barrier level on each monthly observation date. The following scenarios are for illustration purposes only to demonstrate how the coupon is calculated, and do not attempt to demonstrate every situation that may occur and, accordingly, the contingent coupon may be payable in some but not all of the interest periods in years 3 through 15 of the term of the notes.

Scenario 1: Interest is paid for all interest periods, which is the best case scenario.

This scenario assumes that the underlying index closes at or above the barrier level on every monthly observation date. Investors receive the 7.50% per annum contingent coupon for each interest period in years 3 through 15 in addition to the 7.50% per annum coupon paid in the first two years.

Scenario 2 : Interest is paid only for the first two years and not in years 3 through 15, which is the worst case scenario.

This scenario assumes that the underlying index closes below the barrier level on every monthly observation date. Since the underlying index closes below the barrier level on every monthly observation date, investors do not receive any contingent coupon from years 3 through 15 . The receipt of a 7.50% per annum interest solely in the first two years would result in a 1% average annualized return over the 15-year term of the notes.

Summary of Selected Key Risks (see page 8)

§ The notes provide for regular interest payments only during the first two years following their issuance.

§ The contingent coupon is based only on the value of the underlying index on the related monthly observation date at the end of the related interest period.

§ The market price of the notes may be influenced by many unpredictable factors, including the value and volatility of the underlying index and the level of market interest rates .

§ 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 .

§ The notes will not be listed on any securities exchange and secondary trading may be limited.

§ The inclusion of commissions and projected profit from hedging in the original issue price is likely to adversely affect secondary market prices.

§ Hedging and trading activity by our subsidiaries could potentially adversely affect the value of the notes .

§ The calculation agent, which is a subsidiary of the issuer, will make determinations with respect to the notes.

§ Adjustments to the underlying index by the index publisher could adversely affect the value of the notes .

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Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

Fact Sheet

The notes offered are senior unsecured obligations of Morgan Stanley and have the terms described in the accompanying preliminary pricing supplement, the prospectus supplement and the prospectus. The notes only provide for the regular payment of interest for the first two years following their issuance. After the second year and until maturity, the notes will pay a contingent monthly coupon but only if the index closing value of the S&P 500 ® Index is at or above the barrier level on the related observation date. If the index closing value is less than the barrier level on any observation date, we will pay no interest for the related interest period. At maturity, you will receive an amount equal to the stated principal amount for each note you hold and accrued and unpaid interest, if any. The notes are senior notes issued as part of Morgan Stanley’s Series F Global Medium-Term Notes program. All payments on the notes, including the repayment of principal, are subject to the credit risk of Morgan Stanley.

Expected Key Dates — Pricing date:	Original issue date (settlement date):	Maturity date:
December 17, 2010	December 22, 2010 (3 business days after the pricing date)	December 22, 2025 , subject to postponement as described below
Key Terms
Issuer:	Morgan Stanley
Underlying index:	S&P 500 ® Index
Underlying index publisher:	Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc.
Aggregate principal amount:	$
Issue price:	$1,000 per note
Stated principal amount:	$1,000 per note
Denominations:	$1,000 per note and integral multiples thereof
Interest rate:	Years 1 and 2 (from and including the original issue date to but excluding December 22, 2012): 7.50% per annum (computed on the basis of a year of 360 days and twelve 30-day months) Years 3 through 15 (from and including December 22, 2012 to but excluding the maturity date): A contingent coupon of 7.50% per annum is paid monthly only if the closing value of the underlying index is at or above the barrier level on the related observation date (computed on the basis of a year of 360 days and twelve 30-day months) . If on any observation date, the closing value of the underlying index is less than the barrier level, we will pay no coupon for the applicable interest period. It is possible that the underlying index could remain below the barrier level for extended periods of time or even throughout the period from the third year following the original issue date until maturity so that you will receive no contingent monthly coupons.
Barrier level:	925
Interest payment dates:	The 22nd day of each month, beginning January 22, 2011; provided that if any such day is not a business day, that interest payment will be made on the next succeeding business day and no adjustment will be made to any interest payment made on that succeeding business day.
Observation dates:	The third business day preceding each interest payment date, beginning with the January 22, 2013 interest payment date, subject to postponement for non-index business days and certain market disruption events
Interest period:	Monthly
Payment at maturity:	The payment at maturity will be the stated principal amount plus accrued and unpaid interest, if any.
Postponement of interest payment dates (including the maturity date):	If any observation date is postponed due to a non-index business day or certain market disruption events so that it falls less than two business days prior to the relevant scheduled interest payment date (including the maturity date), the interest payment date (or the maturity date) will be the second business day following that observation date as postponed, and no adjustment will be made to any interest payment made on that postponed date.
Risk factors:	Please see “Risk Factors” beginning on page 8 .

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Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

General Information
Listing:	The notes will not be listed on any securities exchange.
CUSIP:	617482PU2
ISIN:	US617482PU21
Minimum ticketing size:	$1,000 / 1 note
Tax considerations:	The notes will be treated as “contingent payment debt instruments” for U.S. federal income tax purposes, as described in the section of the accompanying prospectus supplement called “United States Federal Taxation — Tax Consequences to U.S. Holders.” Under this treatment, if you are a U.S. taxable investor, you generally will be subject to annual income tax based on the “comparable yield” (as defined in the accompanying prospectus supplement) of the notes, adjusted upward or downward to reflect the difference, if any, between the actual and projected amount of any contingent payments on the notes. In addition, any gain recognized by U.S. taxable investors on the sale or exchange, or at maturity, of the notes generally will be treated as ordinary income. If the notes were priced on December 1, 2010, the comparable yield for the notes would be a rate of 5.8980% per annum, compounded monthly; however, the comparable yield will be determined on the pricing date and may be significantly higher or lower than the comparable yield set forth above. The comparable yield and the projected payment schedule for the notes will be provided in the final pricing supplement. You should read the discussion under “United States Federal Taxation — Tax Consequences to U.S. Holders — Notes — Optionally Exchangeable Notes ” in the accompanying prospectus supplement concerning the U.S. federal income tax consequences of an investment in the notes. The comparable yield and the projected payment schedule will not be provided for any purpose other than the determination of U.S. Holders’ accruals of original issue discount and adjustments in respect of the notes, and we make no representation regarding the actual amounts of payments that will be made on a note. If you are a non-U.S. investor, please also read the section of the accompanying prospectus supplement called “United States Federal Taxation — Tax Consequences to Non-U.S. Holders.” You should consult your tax adviser regarding all aspects of the U.S. federal income tax consequences of an investment in the notes as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.
Trustee:	The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank, N.A.)
Calculation agent:	MS & Co.
Use of proceeds and hedging:	The net proceeds we receive from the sale of the notes will be used for general corporate purposes and, in part, in connection with hedging our obligations under the notes through one or more of our subsidiaries. During the term of the notes, we, through our subsidiaries or others, expect to hedge our anticipated exposure in connection with the notes by taking positions in the stocks constituting the underlying index, in futures and/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 . Such purchase activity could affect whether the underlying index closes at or above the barrier level on the observation dates and, accordingly, whether we pay a monthly contingent coupon on the notes. For further information on our use of proceeds and hedging, see “Description of Notes––Use of Proceeds and Hedging” in the accompanying preliminary pricing supplement.
Benefit plan investor considerations:	Each fiduciary of a pension, profit-sharing or other employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances before authorizing an investment in the notes. 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 subsidiaries and affiliates, including MS & Co., may each be considered a “party in interest” within the meaning of ERISA, or a “disqualified person” within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), with respect to many Plans, as well as many individual retirement accounts and Keogh plans (also “Plans”). ERISA Section 406 and Code Section 4975 generally prohibit transactions between Plans and parties in interest or disqualified persons. Prohibited transactions within the meaning of ERISA or the Code would likely arise, for example, if the notes 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,

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	unless the notes are acquired pursuant to an exemption from the “prohibited transaction” rules. A violation of these “prohibited transaction” rules could result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for such persons, unless exemptive relief is available under an applicable statutory or administrative exemption. The U.S. Department of Labor has issued five prohibited transaction class exemptions (“PTCEs”) that may provide exemptive relief for direct or indirect prohibited transactions resulting from the purchase or holding of the notes. 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 Code Section 4975(d)(20) may provide an exemption for the purchase and sale of securities and the related lending transactions, provided that neither the issuer of the securities nor any of its affiliates has or exercises any discretionary authority or 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 notes . Because we may be considered a party in interest with respect to many Plans, the notes 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 notes will be deemed to have represented, in its corporate and its fiduciary capacity, by its purchase and holding of the notes that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing such notes on behalf of or with “plan assets” of any Plan or with any assets of a governmental, non-U.S. or church plan that is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code (“Similar Law”) or (b) its purchase, holding and disposition are eligible for exemptive relief or such purchase, holding and disposition are not prohibited by ERISA or Section 4975 of the Code or any Similar Law. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the notes on behalf of or with “plan assets” of any Plan consult with their counsel regarding the availability of exemptive relief. Each purchaser and holder of the notes has exclusive responsibility for ensuring that its purchase, holding and disposition of the notes do not violate the prohibited transaction rules of ERISA or the Code or any Similar Law. The sale of any notes to any Plan or plan subject to Similar Law is in no respect a representation by us or any of our affiliates or representatives that such an investment meets all relevant legal requirements with respect to investments by plans generally or any particular plan, or that such an investment is appropriate for plans generally or any particular plan. However, individual retirement accounts, individual retirement annuities and Keogh plans, as well as employee benefit plans that permit participants to direct the investment of their accounts, will not be permitted to purchase or hold the notes if the account, plan or annuity is for the benefit of an employee of Citigroup Global Markets Inc., Morgan Stanley or Morgan Stanley Smith Barney LLC (“MSSB”) or a family member and the employee receives any compensation (such as, for example, an addition to bonus) based on the purchase of the notes by the account, plan or annuity.
Additional considerations:	Client accounts over which Citigroup Inc., Morgan Stanley, MSSB or any of their respective subsidiaries have investment discretion are not permitted to purchase the notes, either directly or indirectly.
Supplemental information regarding plan of distribution; conflicts of interest:	The agent may distribute the notes through MSSB, as selected dealer, or other dealers, which may include Morgan Stanley & Co. International plc (“MSIP”) and Bank Morgan Stanley AG. MSSB, MSIP and Bank Morgan Stanley AG are affiliates of Morgan Stanley. Selected dealers, including MSSB, and their financial advisors will collectively receive from the Agent, Morgan

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Stanley & Co. Incorporated, a fixed sales commission of $ for each note they sell. MS & Co. is our wholly-owned subsidiary. MS & Co. will conduct this offering in compliance with the requirements of NASD Rule 2720 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 “Description of Notes—Supplemental Information Concerning Plan of Distribution; Conflicts of Interest” and “—Use of Proceeds and Hedging” in the accompanying preliminary pricing supplement.

Contact:

Morgan Stanley Smith Barney clients may contact their local Morgan Stanley Smith Barney branch office or our principal executive offices at 1585 Broadway, New York, New York 10036 (telephone number (866) 477-4776). All other clients may contact their local brokerage representative. Third-party distributors may contact Morgan Stanley Structured Investment Sales at (800) 233-1087.

This offering summary represents a summary of the terms and conditions of the notes. We encourage you to read the accompanying preliminary pricing supplement, prospectus supplement and prospectus related to this offering, which can be accessed via the hyperlinks on the front page of this document.

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EFPlaceholder Risk Factors

The following is a non-exhaustive list of certain key risk factors for investors in the notes. For further discussion of these and other risks, you should read the section entitled “Risk Factors” in the accompanying preliminary pricing supplement and the accompanying prospectus. We also urge you to consult with your investment, legal, tax, accounting and other advisers before you invest in the notes .

§ The notes provide for regular interest payments only during the first two years following their issuance. The terms of the notes differ from those of ordinary debt securities in that they only provide for the regular payment of interest during the two-year period following the original issue date. After the second year and until maturity, the notes will pay a contingent monthly coupon but only if the index closing value of the S&P 500 ® Index is at or above 925, which we refer to as the barrier level, on the related observation date. If, on the other hand, the index closing value of the underlying index is lower than the barrier level on the relevant observation date for any interest period, we will pay no coupon on the applicable interest payment date. It is possible that the index closing value could remain below the barrier level for extended periods of time or even throughout the period from the third year following the original issue date until maturity so that you will receive no contingent monthly coupons. If you do not earn sufficient contingent coupons over the term of the notes, the overall return on the notes may be less than the amount that would be paid on a conventional debt security of the issuer of comparable maturity.

§ The contingent coupon is based only on the value of the underlying index on the related monthly observation date at the end of the related interest period . Whether the contingent coupon will be paid on any interest payment date will be determined at the end of the relevant interest period based on the closing value of the underlying index on the relevant monthly observation date. As a result, you will not know whether you will receive the contingent coupon on any interest payment date until near the end of the relevant interest period. Moreover, because the contingent coupon is based solely on the value of the underlying index on monthly observation dates, if the closing value of the underlying index on any observation date is below the barrier level, you will receive no coupon for the related interest period even if the level of the underlying index was higher on other days during that interest period.

§ Market price will be influenced by many unpredictable factors. Several factors, many of which are beyond our control, will influence the value of the notes in the secondary market and the price at which MS & Co. may be willing to purchase or sell the notes in the secondary market. We expect that generally the level of interest rates available in the market and the value of the underlying index on any day will affect the value of the notes more than any other factors. Other factors that may influence the value of the notes include:

o the volatility (frequency and magnitude of changes in value) of the S&P 500 ® Index,

o whether the index closing value of the S&P 500 ® Index has been below the barrier level on any observation date,

o geopolitical conditions and economic, financial, political, regulatory or judicial events that affect the component stocks of the underlying index or securities markets generally and which may affect the value of the underlying index,

o dividend rates on the securities underlying the S&P 500 ® Index,

o the time remaining until the notes mature,

o interest and yield rates in the market,

o the availability of comparable instruments,

o the composition of the S&P 500 ® Index and changes in the constituent stocks of such index, and

o any actual or anticipated changes in our credit ratings or credit spreads.

Some or all of these factors will influence the price that you will receive if you sell your notes prior to maturity. For example, you may have to sell your notes at a substantial discount from the stated principal amount of $1,000 per note if the value of the S&P 500 ® Index at the time of sale is below the barrier level or if market interest rates rise.

You cannot predict the future performance of the S&P 500 ® Index based on its historical performance. The value of the underlying index may decrease and be below the barrier level on each observation date so that you will receive no return on

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your investment aside from the 7.50% per annum coupon that will be paid in the first two years following the issuance of the notes. There can be no assurance that the closing value of the underlying index will be at or above the barrier level on any observation date so that you will receive a coupon payment on the notes for the applicable interest period. See “Historical Information” on page 11.

§ 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 . Under the terms of the notes, Morgan Stanley is obligated to return to you the stated principal amount at maturity. However, as with an ordinary debt security, 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. The notes are not guaranteed by any other entity. 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.

§ The notes will not be listed on any securities exchange and secondary trading may be limited . The notes will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the notes. 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.

§ The inclusion of commissions and projected profit from hedging in the original issue price is likely to adversely affect secondary market prices . Assuming no change in market conditions or any other relevant factors, the price, if any, at which MS & Co. is willing to purchase the notes at any time in secondary market transactions will likely be significantly lower than the original issue price, since secondary market prices are likely to exclude commissions paid with respect to the notes and the cost of hedging our obligations under the notes that are included in the original issue price. 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. These secondary market prices are also likely to be reduced by the costs of unwinding the related hedging transactions. Our subsidiaries may realize a profit from the expected hedging activity even if investors do not receive a favorable investment return under the terms of the notes or in any secondary market transaction. In addition, any secondary market prices may differ from values determined by pricing models used by MS & Co., as a result of dealer discounts, mark-ups or other transaction costs.

§ Hedging and trading activity by our subsidiaries could potentially affect the value of the notes . One or more of our subsidiaries expect to carry out hedging activities related to the notes (and 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. Some of our subsidiaries 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 during the term of the notes could affect whether the underlying index closes at or above the barrier level on the observation dates and, accordingly, whether we pay a monthly contingent coupon on the notes .

§ The calculation agent, which is a subsidiary of the issuer, will make determinations with respect to the notes . As calculation agent, MS & Co. will determine the payment that you will receive on each interest payment date and at maturity. Any of these determinations made by MS & Co. in its capacity as calculation agent, including with respect to the occurrence or non-occurrence of market disruption events and the selection of a successor index or calculation of the index closing value in the event of a market disruption event or discontinuance of the underlying index, may adversely affect the payout to you at maturity.

§ Adjustments to the underlying index could adversely affect the value of the notes . The publisher of the underlying index may add, delete or substitute the component stocks of the underlying index or make other methodological changes that could change the value of the underlying index. Any of these actions could adversely affect the value of the notes. The publisher of the underlying index may also discontinue or suspend calculation or publication of the underlying index at any time. In these circumstances, MS & Co., as the calculation agent, will have the sole discretion to substitute a successor index that is comparable to the discontinued index. MS & Co. could have an economic interest that is different than that of investors in the notes insofar as, for example, MS & Co. is permitted to consider indices that are calculated and published

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by MS & Co. or any of its affiliates. If MS & Co. determines that there is no appropriate successor index on any observation date, the determination of whether interest will be payable on the notes on the applicable interest payment date will be based on whether the value of the underlying index based on the closing prices of the stocks constituting the underlying index at the time of such discontinuance, without rebalancing or substitution, computed by MS & Co. as calculation agent in accordance with the formula for calculating the underlying index last in effect prior to such discontinuance is less than the barrier level .

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Non-Callable Contingent Coupon Notes Based on the Performance of the S&P 500 ® Index due December 22, 2025

Information about the Underlying Index

The S&P 500 ® Index. The S&P 500 ® Index, which is calculated, maintained and published by Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc. (“S&P”), consists of 500 component stocks 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 the 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 “Annex A—Underlying Indices and Underlying Index Publishers Information—S&P 500 ® Index” in the accompanying prospectus supplement for PLUS.

License Agreement between S&P and Morgan Stanley. “Standard & Poor’s ® ,” “S&P ® ,” “S&P 500 ® ,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Morgan Stanley. See “Description of Notes—License Agreement between S&P and Morgan Stanley” in the accompanying preliminary pricing supplement.

Historical Information

The following 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 period from January 1, 2005 through December 1, 2010. The closing value of the underlying index on December 1, 2010 was 1,206.07. We obtained the information in the table below from Bloomberg Financial Markets, without independent verification. The historical values of the underlying index should not be taken as an indication of future performance, and no assurance can be given as to the level of the underlying index on any observation date.

S&P 500 ® Index	High	Low	Period End
2005
First Quarter	1,225.31	1,163.75	1,180.59
Second Quarter	1,216.96	1,137.50	1,191.33
Third Quarter	1,245.04	1,194.44	1,228.81
Fourth Quarter	1,272.74	1,176.84	1,248.29
2006
First Quarter	1,307.25	1,254.78	1,294.83
Second Quarter	1,325.76	1,223.69	1,270.20
Third Quarter	1,339.15	1,234.49	1,335.85
Fourth Quarter	1,427.09	1,331.32	1,418.30
2007
First Quarter	1,459.68	1,374.12	1,420.86
Second Quarter	1,539.18	1,424.55	1,503.35
Third Quarter	1,553.08	1,406.70	1,526.75
Fourth Quarter	1,565.15	1,407.22	1,468.36
2008
First Quarter	1,447.16	1,273.37	1,322.70
Second Quarter	1,426.63	1,278.38	1,280.00
Third Quarter	1,305.32	1,106.39	1,166.36
Fourth Quarter	1,161.06	752.44	903.25
2009
First Quarter	934.70	676.53	797.87
Second Quarter	946.21	811.08	919.32
Third Quarter	1,071.66	879.13	1,057.08
Fourth Quarter	1,127.78	1,025.21	1,115.10
2010
First Quarter	1,174.17	1,056.74	1,169.43
Second Quarter	1,217.28	1,030.71	1,030.71
Third Quarter	1,148.67	1,022.58	1,141.20
Fourth Quarter (through December 1, 2010)	1,225.85	1,137.03	1,206.07

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