MORGAN STANLEY — Capital/Financing Update 2016

Dec 28, 2016

December 2016

Pricing Sheet dated December 23, 2016 relating to

Preliminary Terms No. 1,233 dated December 19, 2016

Registration Statement Nos. 333-200365; 333-200365-12

Filed pursuant to Rule 433

Morgan Stanley Finance LLC

Structured Investments

Opportunities in U.S. Equities

Trigger Jump Securities Based on the Value of the Russell 2000 ® Index due January 3, 2020

Fully and Unconditionally Guaranteed by Morgan Stanley

Principal at Risk Securities

PRICING TERMS – DECEMBER 23, 2016
Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Issue price:	$10 per security (see “Commissions and issue price” below)
Stated principal amount:	$10 per security
Pricing date:	December 23, 2016
Original issue date:	December 29, 2016 (3 business days after the pricing date)
Maturity date:	January 3, 2020
Aggregate principal amount:	$8,275,700
Interest:	None
Underlying index:	Russell 2000 ® Index
Payment at maturity:	· If
the final index value is greater than or equal to the initial index value: $10 + the upside
payment · If
the final index value is less than the initial index value but greater than or equal to the downside threshold level, meaning the
value of the underlying index has declined by no more than 10% from its initial value: $10 · If
the final index value is less than the downside threshold level, meaning the value of the underlying index has declined by more
than 10% from its initial value: $10 × index performance
factor Under these circumstances, the payment at maturity
will be significantly less than the stated principal amount of $10, and will represent a loss of more than 10%, and possibly all,
of your investment.
Upside payment:	$3.225 per security (32.25% of the stated principal amount)
Downside threshold level:	1,234.359, which is 90% of the initial index value
Index performance factor:	final index value / initial index value
Initial index value:	1,371.510, which is the index closing value on the pricing date
Final index value:	The index closing value on the valuation date
Valuation date:	December 30, 2019, subject to postponement for non-index business days and certain market disruption events
CUSIP:	61766F797
ISIN:	US61766F7978
Listing:	The securities will not be listed on any securities exchange.
Agent:	Morgan Stanley & Co. LLC (“MS & Co.”) , an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest” in the accompanying preliminary terms.
Estimated value on the pricing date:	$9.533 per security. See “Investment Summary” in the accompanying preliminary terms.

Commissions and issue price:	Price to public	Agent’s commissions and fees	Proceeds to us (3)
Per security	$10	$0.25 (1)
		$0.05 (2)	$9.70
Total	$8,275,700	$248,271	$8,027,429

(1) Selected dealers, including Morgan Stanley Wealth Management (an affiliate of the agent), and their financial advisors will collectively receive from the agent, MS & Co., a fixed sales commission of $0.25 for each security they sell. For additional information, see “Supplemental information regarding plan of distribution; conflicts of interest” in the accompanying preliminary terms and “Plan of Distribution (Conflicts of Interest)” in the accompanying product supplement for Jump Securities.

(2) Reflects a structuring fee payable to Morgan Stanley Wealth Management by the agent or its affiliates of $0.05 for each security.

(3) See “Use of proceeds and hedging” in the accompanying preliminary terms.

The “Russell 2000 ® Index” is a trademark of Russell Investments and has been licensed for use by Morgan Stanley. The securities are not sponsored, endorsed, sold or promoted by Russell Investments Russell Investments and Russell Investments makes no representation regarding the advisability of investing in the securities.

The securities 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 preliminary terms describing the offering and the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below.

References to “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.

Preliminary Tems No. 1,233 dated December 19, 2016

Product Supplement for Jump Securities dated February 29, 2016 Index Supplement dated February 29, 2016

Prospectus dated February 16, 2016

MSFL and Morgan Stanley have 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 MSFL and Morgan Stanley have filed with the SEC for more complete information about MSFL, Morgan Stanley 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.

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