MORGAN STANLEY — Capital/Financing Update 2016

Dec 16, 2016

December 2016

Pricing Sheet dated December 14, 2016 relating to

Preliminary Terms No. 1,196 dated December 1, 2016 Registration Statement Nos. 333-200365; 333-200365-12 Filed pursuant to Rule 433

M organ S tanley F inance LLC

STRUCTURED INVESTMENTS

Opportunities in U.S. Equities

Lookback Entry PLUS Based on the Value of the S&P 500 ® Index due June 19, 2019

Performance Leveraged Upside Securities SM

Fully and Unconditionally Guaranteed by Morgan Stanley

Principal at Risk Securities

PRICING TERMS – DECEMBER 14, 2016 — Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Maturity date:	June 19, 2019
Underlying index:	S&P 500 ® Index
Aggregate principal amount:	$6,734,200
Payment at maturity:	If final index value is greater than initial index value,
	$10 + leveraged upside payment
	In no event will the payment at maturity exceed the maximum payment at maturity.
	If final index value is less than or equal to initial index value,
	$10 × index performance factor
	Under these circumstances, the payment at maturity will be less than or equal
to the stated principal amount of $10.
Leveraged upside payment:	$10 × leverage factor × index percent increase
Index percent increase:	(final index value – initial index value) / initial index value
Initial index value:	The lowest index closing value during the initial observation period. In
no event will the initial index value be greater than 2,253.28, which is the index closing value on the pricing date.
Initial observation period:	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 January
23, 2017.
Final index value:	The index closing value on the valuation date
Valuation date:	June 14, 2019, subject to adjustment for non-index business days and certain
market disruption events
Leverage factor:	200%
Index performance factor:	final index value / initial index value
Maximum payment at maturity:	$12.50 per PLUS (125% of the stated principal amount).
Stated principal amount:	$10 per PLUS
Issue price:	$10 per PLUS (see “Commissions and issue price” below)
Pricing date:	December 14, 2016
Original issue date:	December 19, 2016 (3 business days after the pricing date)
CUSIP / ISIN:	61766F631 / US61766F6319
Listing:	The PLUS 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:	$9.553
per PLUS. See “Investment Summary” in the accompanying preliminary terms.
Commissions and
issue price:	Price to public	Agent’s
commissions (1)(2)	Proceeds to us (3)
Per PLUS	$10	$0.25
		$0.05	$9.70
Total	$6,734,200	$202,026	$6,532,174

(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 PLUS 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 PLUS.

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

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

“Standard & Poor’s ® ”, “S&P ® ”, “S&P 500 ® ”, “Standard & Poor’s 500” and “500” are trademarks of Standard and Poor’s Financial Services LLC and have been licensed for use by S&P Dow Jones Indices LLC and Morgan Stanley. For more information, see “S&P 500 ® Index” in the accompanying index supplement.

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

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.

Preliminary Terms No. 1,196 dated December 1, 2016

Product Supplement for PLUS 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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