MORGAN STANLEY — Capital/Financing Update 2010

Feb 24, 2010

CALCULATION OF REGISTRATION FEE

| | Maximum
Aggregate | Amount
of Registration |
| --- | --- | --- |
| Title
of Each Class of Securities Offered | Offering
Price | Fee |
| Performance
Leveraged Upside Securities | $4,488,000 | $319.99 |
| due
2011 | | |

February 2010 Pricing Supplement No. 289 Registration Statement No. 333-156423 Dated February 22, 2010 Filed pursuant to Rule 424(b)(2)

Structured Investments

Opportunities in Commodities

PLUS B ased on the Value of the Dow Jones - UBS Commodity Index SM due August 29, 2011

Performance Leveraged Upside Securities SM

The PLUS are senior unsecured obligations of Morgan Stanley, will pay no interest, do not guarantee any return of principal at maturity and have the terms described in the prospectus supplement for Commodity PLUS and the prospectus, as supplemented or modified by this pricing supplement. At maturity, you will receive for each stated principal amount of PLUS that you hold an amount in cash that may be greater than, equal to or less than the stated principal amount based upon the closing value of the underlying commodity index on the valuation date. All payments on the PLUS are subject to the credit risk of Morgan Stanley.

| FINAL TERMS — Issuer: | Morgan
Stanley | | |
| --- | --- | --- | --- |
| Aggregate principal
amount: | $4,488,000 | | |
| Stated principal
amount: | $1,000 per
PLUS | | |
| Issue
price: | $1,000 per
PLUS (see “Commissions and Issue Price” below) | | |
| Pricing
date: | February 22,
2010 | | |
| Original issue
date: | February 25,
2010 (3 business days after the pricing date) | | |
| Maturity
date: | August 29,
2011 | | |
| Underlying commodity
index: | Dow Jones-UBS
Commodity Index SM | | |
| Payment at
maturity: | If the final
index value is greater
than the initial index value, $1,000 +
leveraged upside payment In
no event will the payment at maturity exceed the maximum payment at
maturity. If the final
index value is less than
or equal to the initial index value, $1,000 x
index performance factor This
amount will be less than or equal to the stated principal amount of $1,000
and could be zero. There is no minimum payment at maturity on the
PLUS. | | |
| Maximum payment at
maturity: | $1,250 per
PLUS (125% of the stated principal amount) | | |
| Leveraged upside
payment: | $1,000 x
leverage factor x index percent increase | | |
| Leverage
factor: | 300% | | |
| Index percent
increase: | (final index
value – initial index value) / initial index value | | |
| Index performance
factor: | final index
value / initial index value | | |
| Initial index
value: | 134.3712,
which is the index value on the pricing date | | |
| Final index
value: | The index
value on the valuation date | | |
| Valuation
date: | August 24,
2011, subject to adjustment for non-index business days and certain market
disruption events | | |
| CUSIP: | 617482KG8 | | |
| ISIN: | US617482KG81 | | |
| Listing: | The PLUS 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 (1) | Agent’s Commissions (1)(2) | Proceeds to Issuer |
| Per PLUS | $1,000 | $20 | $980 |
| Total | $4,488,000 | $89,760 | $4,398,240 |

(1) The actual price to public and agent’s commissions for a particular investor may be reduced for volume purchase discounts depending on the aggregate amount of PLUS purchased by that investor. The lowest price payable by an investor is $992.50 per PLUS. Please see “Syndicate Information” on page 5 for further details.

(2) 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 $20 for each $1,000 stated principal amount of PLUS they sell. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution” in the accompanying prospectus supplement for Commodity PLUS.

The PLUS involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 8.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this pricing supplement or the accompanying prospectus supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should read this document together with the related prospectus supplement and prospectus, each of which can be accessed via the hyperlinks below.

Prospectus Supplement for Commodity PLUS dated August 20, 2009

Prospectus dated December 23, 2008

the plus 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.

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

Fact Sheet

The PLUS are senior unsecured obligations of Morgan Stanley, will pay no interest, do not guarantee any return of principal at maturity and have the terms described in the prospectus supplement for Commodity PLUS and the prospectus, as supplemented or modified by this pricing supplement. At maturity, an investor will receive for each stated principal amount of PLUS that the investor holds, an amount in cash that may be more than, equal to or less than the stated principal amount based upon the settlement price of the underlying commodity index on the valuation date. The PLUS are senior notes issued as part of Morgan Stanley’s Series F Global Medium-Term Notes program. All payments on the PLUS are subject to the credit risk of Morgan Stanley.

| Key Dates — Pricing
date : | Original issue
date (settlement
date): | Maturity
date: |
| --- | --- | --- |
| February 22,
2010 | February 25,
2010 (3 business days after the pricing date) | August 29,
2011 (subject to postponement as described below) |
| Key Terms | | |
| Issuer: | Morgan
Stanley | |
| Underlying commodity
index : | Dow Jones-UBS
Commodity Index SM | |
| Underlying commodity
index publisher: | Dow Jones
& Company, Inc., in conjunction with UBS Securities
LLC | |
| I ssue price: | $1,000 per
PLUS (see “Syndicate Information” on page 5) | |
| Aggregate principal
amount: | $4,488,000 | |
| Stated principal
amount: | $1,000 per
PLUS | |
| Denominations: | $1,000 per
PLUS and integral multiples thereof | |
| Interest: | None | |
| Bull market or bear market
PLUS: | Bull market
PLUS | |
| Payment at
maturity: | If the final
index value is greater than the initial index value, $1,000 +
leveraged upside payment In
no event will the payment at maturity exceed the maximum payment at
maturity. If the final
index value is less than or equal to the initial index value, $1,000 x
index performance factor This
amount will be less than or equal to the stated principal amount of $1,000
and could be zero. There is no minimum payment at maturity on the
PLUS. | |
| Maximum payment at
maturity : | $1,250 per
PLUS (125% of the stated principal amount) | |
| Leveraged upside
payment: | $1,000 x
leverage factor x index percent increase | |
| Leverage factor : | 300% | |
| Index percent
increase: | (final index
value – initial index value) / initial index value | |
| Index performance
factor : | final index
value / initial index value | |
| Initial index
value: | 134.3712,
which is the index value on the pricing date | |
| Final index
value: | The index
value on the valuation date | |
| Valuation date : | August 24,
2011, subject to adjustment for non-index business days and certain market
disruption events. | |
| Postponement of maturity
date: | If, due to a
market disruption event or otherwise, the valuation date is postponed so
that it falls less than two business days prior to the scheduled maturity
date, the maturity date will be the second business day following the
valuation date as postponed. | |
| Risk
factors: | Please
see “Risk Factors” beginning on page
8. | |

February 2010 Page 2

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

| General
Information | |
| --- | --- |
| Listing: | The PLUS will
not be listed on any securities exchange. |
| CUSIP: | 617482KG8 |
| ISIN : | US617482KG81 |
| Minimum ticketing
size: | 1
PLUS |
| Tax
considerations: | Although the issuer believes that,
under current law, t he PLUS should be treated as a
single financial contract that is an “ open transaction” for U.S. federal income tax purposes,
there is uncertainty regarding the U.S. federal income tax consequences
of an investment in the PLUS. |
| | Assuming this treatment
of the PLUS is
respected and subject to the discussion in “ United States Federal
Taxation” in the
accompanying prospectus supplement for Commodity PLUS, the following U.S. federal income tax consequences
should result based on current
law: |

| § | A U.S. Holder sh ould not be required to recognize
taxable income over the term of the PLUS prior to maturity, other than
pursuant to a sale or exchange. |
| --- | --- |
| § | Upon sale, exchange or settlement
of the PLUS at maturity, a U.S. Holder should recognize gain or loss equal
to the d ifference
between the amount realized and the U.S. Holder ’ s tax basis in the
PLUS. Such gain or loss should be long-term capital gain or
loss if the investor has held the PLUS for more than one
year. |

| | On December
7, 2007, the Treasury Department and the Internal Revenue Service (the
“IRS”) released a notice requesting comments on the U.S. federal income
tax treatment of “prepaid forward contracts” and similar instruments, such
as the PLUS . The notice
focuses in particular on whether to require holders of these instruments
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 the 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 income (including any mandated accruals) realized
by non-U.S. investors should be subject to withholding tax; and whether
these instruments are or should be subject to the “constructive ownership”
regime, which very generally can operate to recharacterize certain
long-term capital gain as ordinary income that is subject to an interest
charge. While the notice requests comments on appropriate
transition rules and effective dates, any Treasury regulations or other
guidance promulgated after consideration of these issues could materially
and adversely affect the tax consequences of an investment in the PLUS , possibly with
retroactive effect. Both U.S. and non-U.S. investors
considering an investment in the PLUS should read the discussion under
“ Risk
Factors” in this
document and the discussion under “United States Federal Taxation”
in the accompanying prospectus supplement for Commodity PLUS and consult their tax advisers
regarding all aspects of the U.S. federal income tax consequences of an
investment in the PLUS, including possible alternative tre atments, the issues presented by
the aforementioned notice and 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: | Morgan Stanley Capital Group Inc. (“MSCG”) |
| Agent: | MS &
Co. |

February 2010 Page 3

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

| Use of proceeds and
hedging: | The net proceeds we receive from
the sale of the PLUS will be used for general corporate purposes and, in
part, in connection with hedging our obligations under the PLUS through
one or more of our subsidiaries. On or prior to the pricing date,
we, through our subsidiaries or others, hedged our anticipated exposure in
connection with the PLUS by taking positions in swaps or futures contracts
on the underlying commodity index or on the commodity contracts that
underlie the underlying commodity index. Such purchase activity
could have
increased the value
of the underlying commodity index on the pricing date , and therefore could have increased
t he value at which
the underlying commodity index must close on the valuation date before
investors would receive at maturity a payment that exceeds the principal
amount of the PLUS. For further information on our use of
proceeds and hedging, see “Use of Proceeds and Hedging” in the
accompanying prospectus supplement for Commodity
PLUS. |
| --- | --- |
| 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 PLUS. 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 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”). Prohibited transactions within the meaning of ERISA
or the Code would likely arise, for example, if the PLUS 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, unless
the PLUS 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 PLUS. 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 Section 4975(d)(20) of the Code may
provide an exemption for the purchase and sale of PLUS and the related
lending transactions, provided that neither the issuer of the PLUS 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 PLUS. Because we
may be considered a party in interest with respect to many Plans, the PLUS
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 PLUS will be deemed to
have represented, in its corporate and its fiduciary capacity, by its
purchase and holding of the PLUS that either (a) it is not a Plan or a
Plan Asset Entity and is not purchasing such PLUS 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 |

February 2010 Page 4

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

| | 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
PLUS 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 PLUS has exclusive responsibility for ensuring
that its purchase, holding and disposition of the PLUS do not violate the
prohibited transaction rules of ERISA or the Code or any Similar
Law. The sale of any PLUS 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 PLUS 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 PLUS 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 PLUS, either directly or indirectly. |
| Supplemental information regarding
plan of distribution; conflicts of interest: | The agent may distribute the PLUS
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 agent, MS & Co., a fixed sales commission of $20 for each $1,000 stated principal amount
of PLUS 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. In accordance with NASD Rule 2720, MS & Co. or
any of our other affiliates may not make sales in this offering to any
discretionary account without the prior written approval of the customer. See
“Plan of Distribution” and “Use of Proceeds and Hedging”
in the accompanying prospectus supplement for Commodity PLUS. |
| 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. |

| Syndicate
Information — Issue price of the PLUS | Selling
concession | Principal amount of PLUS for any single
investor |
| --- | --- | --- |
| $1,000 | $20.00 | <$1MM |
| $996.25 | $16.25 | ≥$1MM and
<$3MM |
| $994.38 | $14.38 | ≥$3MM and
<$5MM |
| $992.50 | $12.50 | > $5MM |

Selling concessions allowed to dealers in connection with the offering may be reclaimed by the agent, if, within 30 days of the offering, the agent repurchases the PLUS distributed by such dealers.

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

February 2010 Page 5

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

How PLUS Work

Payoff Diagram

The payoff diagram below illustrates the payment at maturity on the PLUS based on the following terms:

| Stated principal
amount: | $1,000 |
| --- | --- |
| Leverage factor : | 300% |
| Maximum payment at
maturity: | $1,250 per
PLUS (125% of the stated principal
amount) |

PLUS Payoff Diagram

How it works

¡ If the final index value is greater than the initial index value, investors will receive the $1,000 stated principal amount plus 300% of the appreciation of the underlying commodity index over the term of the PLUS, subject to the maximum payment at maturity. In the payoff diagram, an investor will realize the maximum payment at maturity at a final index value of approximately 108.3333% of the initial index value. Based on the terms above:

– If the underlying commodity index appreciates 5%, investors would receive a 15% return, or $1,150.

– If the underlying commodity index appreciates 40%, investors will receive only the maximum payment at maturity of 125% of the stated principal amount, or $1,250 per PLUS.

¡ If the final index value is less than or equal to the initial index value, investors will receive an amount that is less than or equal to the $1,000 stated principal amount, based on a 1% loss of principal for each 1% decline in the underlying commodity index.

– If the underlying commodity index depreciates 10%, investors would lose 10% of their principal and receive only $900 at maturity, or 90% of the stated principal amount.

– If the underlying commodity index depreciates 50%, investors would lose 50% of their principal and receive only $500 at maturity, or 50% of the stated principal amount.

February 2010 Page 6

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

Payment at Maturity

At maturity, investors will receive for each $1,000 stated principal amount of PLUS that they hold an amount in cash based upon the value of the underlying commodity index, determined as follows:

If the final index value is greater than the initial index value :

$1 ,00 0 + Leveraged Upside Payment

In no event will the leveraged upside payment result in a payment at maturity greater than the maximum payment at maturity of $1,250 per PLUS (125% of the stated principal amount).

If the final index value is less than or equal to the initial index value:

$1,000 x Index Performance Factor

Because the index performance factor will be less than or equal to 1.0, this payment will be less than or equal to $1,000 and could be zero. There is no minimum payment at maturity on the PLUS.

February 2010 Page 7

PLUS B ased on the Value of the Dow Jones-UBS Commodity Index due August 29 , 2011

Performance Leveraged Upside Securities SM

Risk Factors

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

§ PLUS do not pay interest or guarantee return of principal. The terms of the PLUS differ from those of ordinary debt securities in that the PLUS do not pay interest and do not guarantee the return of any of the stated principal amount at maturity. If the final index value is less than the initial index value, the payout at maturity will be an amount in cash that is less than the $1,000 stated principal amount of each PLUS by an amount proportionate to the decrease in the value of the underlying commodity index. There is no minimum payment at maturity on the PLUS, and, accordingly, you could lose your entire investment .

§ Appreciation potential is limited. The appreciation potential of the PLUS is limited by the maximum payment at maturity of $1,250 per PLUS, or 125% of the stated principal amount. Although the leverage factor provides 300% exposure to any increase in the final index value over the initial index value, because the payment at maturity will be limited to 125% of the stated principal amount, any increase in the final index value over the initial index value by more than approximately 8.3333% of the initial index value will not increase the return on the PLUS.

§ Market price of the PLUS may be influenced by many unpredictable factors. Numerous factors will influence the value of the PLUS in the secondary market and the price at which MS & Co. may be willing to purchase or sell the PLUS in the secondary market, including: the value and volatility of the underlying commodity index, the price and volatility of the commodity contracts that underlie the underlying commodity index, trends of supply and demand for the commodities underlying the underlying commodity index, geopolitical conditions and economic, financial, political and regulatory or judicial events, interest and yield rates in the market, time remaining to maturity and any actual or anticipated changes in our credit ratings or credit spreads. In addition, the commodities markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, participation of speculators and government intervention. As a result, the market value of the PLUS will vary and may be less than the original issue price at any time prior to maturity and sale of the PLUS prior to maturity may result in a loss.

§ The PLUS 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 PLUS. Investors are dependent on Morgan Stanley’s ability to pay all amounts due on the PLUS at maturity, and, therefore, investors are subject to the credit risk of Morgan Stanley and to 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 PLUS.

§ Investments linked to commodities are subject to sharp fluctuations in commodity prices. Investments, such as the PLUS, linked to the prices of commodities, are subject to sharp fluctuations in the prices of commodities and related contracts over short periods of time for a variety of factors, including: changes in supply and demand relationships; weather; climatic events; the occurrence of natural disasters; wars; political and civil upheavals; acts of terrorism; trade, fiscal, monetary, and exchange control programs; domestic and foreign political and economic events and policies; disease; pestilence; technological developments; changes in interest rates; and trading activities in commodities and related contracts. These factors may affect the settlement price of the underlying commodity index and the value of your PLUS in varying and potentially inconsistent ways. As a result of these or other factors, the price of the underlying commodity index may be, and has recently been, highly volatile (see “Historical Information” on page 13).

§ Not equivalent to investing in the underlying commodity index. Investing in the PLUS is not equivalent to investing in the underlying commodity index or the futures contracts that underlie the underlying commodity index.

§ Higher future prices of the index commodities relative to their current prices may adversely affect the value of the underlying commodity index and the value of the PLUS. The underlying commodity index is composed of futures contracts on physical commodities. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, commodity futures contracts normally specify a certain date for delivery of the underlying physical commodity. As the futures contracts that compose the underlying commodity index approach expiration, they are replaced by contracts that have a later

February 2010 Page 8

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Performance Leveraged Upside Securities SM

expiration. Thus, for example, a contract purchased and held in September may specify an October expiration. As time passes, the contract expiring in October is replaced by a contract for delivery in November. This process is referred to as “rolling.” If the market for these contracts is (putting aside other considerations) in “backwardation,” where the prices are lower in the distant delivery months than in the nearer delivery months, the sale of the October contract would take place at a price that is higher than the price of the November contract, thereby creating a “roll yield.” While many of the contracts included in the underlying commodity index have historically exhibited consistent periods of backwardation, backwardation will most likely not exist at all times. Moreover, certain of the commodities included in the underlying commodity index have historically traded in “contango” markets. Contango markets are those in which the prices of contracts are higher in the distant delivery months than in the nearer delivery months. The absence of backwardation in the commodity markets could result in negative “roll yields,” which could adversely affect the value of the underlying commodity index and, accordingly, the value of the PLUS.

§ Suspensions or disruptions of market trading in commodity and related futures markets could adversely affect the price of the PLUS. The commodity markets are subject to temporary distortions or other disruptions due to various factors, including the lack of liquidity in the markets, the participation of speculators and government regulation and intervention. In addition, U.S. futures exchanges and some foreign exchanges have regulations that limit the amount of fluctuation in futures contract prices which may occur during a single business day. These limits are generally referred to as “daily price fluctuation limits” and the maximum or minimum price of a contract on any given day as a result of these limits is referred to as a “limit price.” Once the limit price has been reached in a particular contract, no trades may be made at a different price. Limit prices have the effect of precluding trading in a particular contract or forcing the liquidation of contracts at disadvantageous times or prices. These circumstances could adversely affect the value of the underlying commodity index and, therefore, the value of the PLUS.

§ Adjustments to the underlying commodity index could adversely affect the value of the PLUS. Dow Jones & Company, Inc., in conjunction with UBS Securities LLC, as the underlying commodity index publisher, may add, delete or substitute the commodity constituting the underlying commodity index or make other methodological changes that could change the value of the underlying commodity index. The underlying commodity index publisher may discontinue or suspend calculation or publication of the underlying commodity index at any time. Any of these actions could adversely affect the value of the PLUS. Where the underlying commodity index is discontinued, the calculation agent will have the sole discretion to substitute a successor index that is comparable to the underlying commodity index and is not precluded from considering indices that are calculated and published by the calculation agent or any of its affiliates.

§ The PLUS will not be listed and secondary trading may be limited. The PLUS will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the PLUS. MS & Co. may, but is not obligated to, make a market in the PLUS. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the PLUS easily. Because we do not expect that other broker-dealers will participate significantly in the secondary market for the PLUS, the price at which you may be able to trade your PLUS 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 PLUS, it is likely that there would be no secondary market for the PLUS. Accordingly, you should be willing to hold your PLUS 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 PLUS in secondary market transactions will likely be lower than the original issue price, since the original issue price includes, and secondary market prices are likely to exclude, commissions paid with respect to the PLUS, as well as the cost of hedging our obligations under the PLUS. 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. 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.

§ The economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests. MSCG, the calculation agent, is our subsidiary. The economic interests of the calculation agent and other affiliates of ours are potentially adverse to your interests as an investor in the PLUS. As calculation agent, MSCG has determined the initial index value and will determine the final index value and the index percent increase or index performance factor, as applicable, and will calculate the amount of cash, if any, you will receive at maturity. Determinations made by MSCG, in its capacity as calculation agent, including with respect to the occurrence or non-occurrence of market disruption events and the calculation

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of any index value in the event of the unavailability, modification or discontinuance of the underlying commodity index, may adversely affect the payout to you at maturity.

§ Hedging and trading activity by the calculation agent and its affiliates could potentially adversely affect the value of the PLUS. MSCG and other affiliates of ours have carried out, and will continue to carry out, hedging activities related to the PLUS (and possibly to other instruments linked to the underlying commodity index), including trading in futures and options contracts on the underlying commodity index as well as in other instruments related to the underlying commodity index. MSCG and some of our other subsidiaries also trade in the component futures contracts of the underlying commodity index and other financial instruments related to the underlying commodity index on a regular basis as part of their general commodity trading, proprietary trading and other businesses. Any of these hedging or trading activities on or prior to the pricing date could have increased the initial index value and, as a result, could have increased the price at which the underlying commodity index must close on the valuation date before you receive a payment at maturity that exceeds the issue price of the PLUS. Additionally, such hedging or trading activities during the term of the PLUS, including on the valuation date, could adversely affect the price of the underlying commodity index on the valuation date and, accordingly, the amount of cash an investor will receive at maturity.

§ The U.S. federal income tax consequences of an investment in the PLUS are uncertain. Please read the discussion under “Fact Sheet ― General Information ― Tax considerations” in this document and the discussion under “United States Federal Taxation” in the accompanying pros pectus supplement for Commodity PLUS (together the “Tax Disclosure Sections”) concerning the U.S. federal income tax consequences of an investment in the PLUS . If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative treatment, the timing and character of income on the PLUS might differ significantly from the tax treatment described in the Tax Disclosure Sections. For example, under one treatment, U.S. Holders could be required to accrue original issue discount on the PLUS every year at a “comparable yield” determined at the time of issuance and recognize all income and gain in respect of the PLUS as ordinary income. The issuer does not plan to request a ruling from the IRS regarding the tax treatment of the PLUS , and the IRS or a court may not agree with the tax treatment described in the Tax Disclosure Sections. 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, such as the PLUS. The notice focuses in particular on whether to require holders of these instruments 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 the 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 income (including any mandated accruals) realized by non-U.S. investors should be subject to withholding tax; and whether these instruments are or should be subject to the “constructive ownership” regime, which very generally can operate to recharacterize certain long-term capital gain as ordinary income that is subject to an interest charge. While the notice requests comments on appropriate transition rules and effective dates, any Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in the PLUS, possibly with retroactive effect. Both U.S. and Non-U.S. Holders should consult their tax advisers regarding the U.S. federal income tax consequences of an investment in the PLUS, including possible alternative treatments, the issues presented by this notice and any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

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Information about the Underlying Commodity Index

The Dow Jones-UBS Commodity Index SM . The PLUS are linked to the Dow Jones-UBS Commodity Index SM and not the Dow Jones - UBS Commodity Index Total Return SM . The Dow Jones-UBS Commodity Index SM is currently composed of futures contracts on nineteen physical commodities, is quoted in U.S. dollars, and reflects the return of underlying commodity futures price movements only. The Dow Jones-UBS Commodity Index SM is calculated, maintained and published daily by Dow Jones & Company, Inc. and UBS Securities LLC. The Dow Jones-UBS Commodity Index SM reflects returns that are potentially available through an unleveraged investment in the components of that index. The Dow Jones-UBS Commodity Index SM was formerly known as the Dow Jones-AIG Commodity Index SM . On May 6, 2009, UBS Securities LLC acquired AIG Financial Product Corp.’s commodity business, as a result of which the Dow Jones-AIG Commodity Index SM became re-branded, and on May 8, 2009 began being published as the Dow Jones-UBS Commodity Index SM. The Dow Jones-UBS Commodity Index SM has an identical methodology to the Dow Jones-AIG Commodity Index SM . For more information, see “Annex II—Certain Additional Commodity Index Information—The Dow Jones-UBS Commodity Index SM ” in the accompanying prospectus supplement for Commodity PLUS.

License Agreement between Dow Jones & Company, Inc., UBS AG and Morgan Stanley. “Dow Jones ® ,” “DJ,” “UBS,” “Dow Jones–UBS Commodity Index SM ,” “DJ-UBS SM ” and “DJ-UBSCI SM ” are service marks of Dow Jones & Company, Inc. (“Dow Jones”) and UBS AG (“UBS AG”), as the case may be, and have been licensed for use for certain purposes by Morgan Stanley . See “Annex II—Certain Additional Commodity Index Information—The Dow Jones-UBS Commodity Index SM ” in the accompanying prospectus supplement for Commodity PLUS.

The PLUS are not sponsored, endorsed, sold or promoted by Dow Jones, UBS AG, UBS Securities LLC (“UBS Securities”) or any of their subsidiaries or affiliates. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates makes any representation or warranty, express or implied, to the owners of or counterparts to the PLUS or any member of the public regarding the advisability of investing in securities or commodities generally or in the PLUS particularly. The only relationship of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates to Morgan Stanley is the licensing of certain trademarks, trade names and service marks and of the DJ-UBS SM , which is determined, composed and calculated by Dow Jones in conjunction with UBS Securities without regard to Morgan Stanley or the PLUS. Dow Jones and UBS Securities have no obligation to take the needs of Morgan Stanley or the owners of the PLUS into consideration in determining, composing or calculating DJ-UBS SM . None of Dow Jones, UBS AG, UBS Securities or any of their respective subsidiaries or affiliates is responsible for or has participated in the determination of the timing of, prices at, or quantities of the PLUS to be issued or in the determination or calculation of the equation by which the PLUS are to be converted into cash. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates shall have any obligation or liability, including, without limitation, to the PLUS customers, in connection with the administration, marketing or trading of the PLUS. Notwithstanding the foregoing, UBS AG, UBS Securities and their respective subsidiaries and affiliates may independently issue and/or sponsor financial products unrelated to the PLUS currently being issued by Morgan Stanley, but which may be similar to and competitive with the PLUS. In addition, UBS AG, UBS Securities and their subsidiaries and affiliates actively trade commodities, commodity indexes and commodity futures (including the Dow Jones-UBS Commodity Index SM and Dow Jones-UBS Commodity Index Total Return SM ), as well as swaps, options and derivatives which are linked to the performance of such commodities, commodity indexes and commodity futures. It is possible that this trading activity will affect the value of the Dow Jones-UBS Commodity Index SM and the PLUS.

This pricing supplement relates only to the PLUS and does not relate to the exchange-traded physical commodities underlying any of the Dow Jones-UBS Commodity Index SM components. Purchasers of the PLUS should not conclude that the inclusion of a futures contract in the Dow Jones-UBS Commodity Index SM is any form of investment recommendation of the futures contract or the underlying exchange-traded physical commodity by Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates. The information in this pricing supplement regarding the Dow Jones-UBS Commodity Index SM components has been derived solely from publicly available documents. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates has made any due diligence inquiries with respect to the Dow Jones-UBS Commodity Index SM components in connection with the PLUS. None of Dow Jones, UBS AG, UBS Securities or any of their subsidiaries or affiliates makes any representation that these publicly available documents or any other publicly available information regarding the Dow Jones-UBS Commodity

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Index SM components, including without limitation a description of factors that affect the prices of such components, are accurate or complete.

NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO AND NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES SHALL HAVE ANY LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS THEREIN. NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY MORGAN STANLEY, OWNERS OF THE PLUS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO. NONE OF DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES MAKES ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW JONES-UBS COMMODITY INDEX SM OR ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES, UBS AG, UBS SECURITIES OR ANY OF THEIR SUBSIDIARIES OR AFFILIATES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS AMONG DOW JONES, UBS SECURITIES AND MORGAN STANLEY, OTHER THAN UBS AG.

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Historical Information

The following table sets forth the published high and low daily official settlement prices, as well as end-of-quarter daily official settlement prices, of the underlying commodity index for each quarter in the period from January 1, 2005 through February 22, 2010. The graph following the table sets forth the daily official settlement prices of the underlying commodity index for the same period. The official settlement price of the underlying commodity index on February 22, 2010 was 134.3712. We obtained the information in the table below from Bloomberg Financial Markets, without independent verification. The historical values of the underlying commodity index should not be taken as an indication of future performance, and no assurance can be given as to the level of the underlying commodity index on the valuation date.

| Dow Jones-UBS Commodity
Index SM | High | Low | Period
End |
| --- | --- | --- | --- |
| 200 5 | | | |
| First
Quarter | 165.2460 | 142.1800 | 162.0940 |
| Second
Quarter | 162.3890 | 146.0780 | 152.8850 |
| Third
Quarter | 179.0690 | 154.1070 | 178.2490 |
| Fourth
Quarter | 180.2400 | 163.3580 | 171.1490 |
| 200 6 | | | |
| First
Quarter | 174.2240 | 158.7800 | 165.1940 |
| Second
Quarter | 187.6280 | 164.7230 | 173.2350 |
| Third
Quarter | 179.9620 | 156.5870 | 159.9570 |
| Fourth
Quarter | 175.2140 | 156.0750 | 166.5090 |
| 200 7 | | | |
| First
Quarter | 173.5030 | 155.8800 | 171.9630 |
| Second
Quarter | 176.4840 | 168.5220 | 169.6710 |
| Third
Quarter | 179.7150 | 161.0620 | 178.2500 |
| Fourth
Quarter | 185.5680 | 172.1230 | 184.9640 |
| 200 8 | | | |
| First
Quarter | 219.0930 | 181.1570 | 201.5980 |
| Second
Quarter | 234.1150 | 199.5660 | 233.0340 |
| Third
Quarter | 237.9530 | 167.3910 | 167.7760 |
| Fourth
Quarter | 167.4840 | 106.0920 | 117.2440 |
| 200 9 | | | |
| First
Quarter | 123.4580 | 101.9990 | 109.7820 |
| Second
Quarter | 131.1160 | 107.4940 | 122.5360 |
| Third
Quarter | 132.9180 | 113.2370 | 127.6830 |
| Fourth
Quarter | 140.0458 | 124.1740 | 139.1873 |
| 20 10 | | | |
| First Quarter
(through February 22, 2010) | 145.0288 | 126.5582 | 134.3712 |

Dow Jones- UBS Commodity Index SM Historical Performance – Official Daily Settlement Prices January 1, 200 5 to February 22, 2010

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Where You Can Find More Information

Morgan Stanley has filed a registration statement (including a prospectus, as supplemented by a prospectus supplement for Commodity PLUS) with the Securities and Exchange Commission, or SEC, for the offering to which this pricing supplement relates. You should read the prospectus in that registration statement, the prospectus supplement for Commodity PLUS and any other documents relating to this offering that Morgan Stanley has filed with the SEC for more complete information about Morgan Stanley and this offering. You may get these documents without cost by visiting EDGAR on the SEC web site at . www.sec.gov. Alternatively, Morgan Stanley will arrange to send you the prospectus and the prospectus supplement for Commodity PLUS if you so request by calling toll-free 800-584-6837.

You may access these documents on the SEC web site at . www.sec.gov as follows:

Prospectus Supplement for Commodity PLUS dated August 20, 2009

Prospectus dated December 23, 2008

Terms used in this pricing supplement are defined in the prospectus supplement for Commodity PLUS or in the prospectus. As used in this pricing supplement, the “Company,” “we,” “us” and “our” refer to Morgan Stanley.

“Performance Leveraged Upside Securities SM ” and “PLUS SM ” are our service marks.

February 2010 Page 14