MORGAN STANLEY — Capital/Financing Update 2016

Nov 2, 2016

October 2016

Pricing Sheet dated October 31, 2016 relating to

Preliminary Terms No. 1,088 dated September 30, 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

Trigger PLUS Based on the Value of the S&P 500 ® Index due November 3, 2022

Trigger Performance Leveraged Upside Securities SM

Fully and Unconditionally Guaranteed by Morgan Stanley

Principal at Risk Securities

| Pricing Terms
– October 31, 2016 | |
| --- | --- |
| Issuer: | Morgan Stanley Finance LLC |
| Guarantor: | Morgan Stanley |
| Maturity date: | November 3, 2022 |
| Underlying index: | S&P 500 ® Index |
| Aggregate principal amount: | $9,874,400 |
| Payment at maturity per Trigger PLUS: | If the final index value
is greater than the initial index value: $10 + leveraged
upside payment If the final index value
is less than or equal to the initial index value but is greater than or equal to the trigger level: $10 If the final index value
is less than the trigger level: $10 × index
performance factor Under these circumstances,
the payment at maturity will be less than the stated principal amount of $10 and will represent a loss of more than 35%,
and possibly all, of your investment. |
| Leveraged upside payment: | $10 × leverage factor × index percent increase |
| Index percent increase: | (final index value – initial index value) / initial index
value |
| Initial index value: | 2,126.15, which is the index closing value on the pricing date |
| Final index value: | The index closing value on the valuation date |
| Trigger level: | 1,381.998, which is approximately 65% of the initial index value |
| Valuation date: | October 31, 2022, subject to postponement for non-index business
days and certain market disruption events |
| Leverage factor: | 160% |
| Index performance factor: | Final index value divided by the initial index value |
| Stated principal amount: | $10 per Trigger PLUS |
| Issue price: | $10 per Trigger PLUS (see “Commissions and issue price”
below) |
| Pricing date: | October 31, 2016 |
| Original issue date: | November 3, 2016 (3 business days after the pricing date) |
| CUSIP: | 61766F284 |
| ISIN: | US61766F2847 |
| Listing: | The Trigger 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: | $9.506 per Trigger PLUS. 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 Trigger PLUS | $10 | $0.30 (1) | |
| | | $0.05 (2) | $9.65 |
| Total | $9,874,400 | $345,604 | $9,528,796 |

| (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 $0.30
for each Trigger 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
Trigger 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. The Trigger PLUS are not sponsored, endorsed, sold or promoted by Standard and Poor’s Financial Services LLC, and Standard and Poor’s Financial Services LLC makes no representation regarding the advisability of investing in the Trigger PLUS.

The Trigger 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. 1,088 dated September 30, 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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