MORGAN STANLEY — Capital/Financing Update 2010

Apr 20, 2010

CALCULATION OF REGISTRATION FEE

| Title
of Each Class of Securities Offered | Maximum
Aggregate Offering
Price | Amount
of Registration Fee |
| --- | --- | --- |
| Index
LeAding StockmarkEt Return Securities due 2013 | $7,300,000 | $520.49 |

April 2010 Pricing Supplement No. 367 Registration Statement No. 333-156423 Dated April 16, 2010 Filed pursuant to Rule 424(b)(2)

STRUCTURED INVESTMENTS

Opportunities in U.S. Equities

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013

Index LeAding StockmarkEt Return Securities

The Index LASERS, which we refer to as the LASERS, 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 LASERS and the prospectus, as supplemented or modified by this pricing supplement. At maturity, an investor will receive for each stated principal amount of LASERS that the investor holds an amount in cash that may be greater than, equal to or less than the stated principal amount based on the index closing value on the valuation date and based on whether the underlying index has declined to or below the downside threshold value at any time from but excluding the pricing date to and including the valuation date. All payments on the LASERS are subject to the credit risk of Morgan Stanley.

| FINAL TERMS — Issuer: | Morgan
Stanley | | |
| --- | --- | --- | --- |
| Aggregate principal
amount: | $7,300,000 | | |
| Stated principal
amount: | $10 per
LASERS | | |
| Issue
price: | $10 per
LASERS | | |
| Pricing
date: | April 16,
2010 | | |
| Original issue
date: | April 22,
2010 (4 business days after the pricing date) | | |
| Maturity
date: | April 22,
2013 | | |
| Underlying
index: | Dow Jones
Industrial Average SM | | |
| Payment at
maturity: | $10 + index
return amount. This payment may be greater than, equal to or
less than the stated principal amount. | | |
| Index return
amount: | If the index
value is greater
than the downside threshold value at all times from but
excluding the pricing date to and including the valuation date (whether
intra-day or at the close of trading on any index business day), the index
return amount will equal: $10 x [the
greater of (i) the index percent change and (ii) the fixed
percentage] If the index
value is less than or
equal to the downside threshold value at any time from but
excluding the pricing date to and including the valuation date (whether
intra-day or at the close of trading on any index business day), the index
return amount will equal: $10 x the
index percent change In
this scenario, the payment at maturity may be less, and potentially
significantly less, than the stated principal amount and could be zero.
There is no minimum payment at maturity on the LASERS. | | |
| Fixed
percentage: | 17% | | |
| Index
value: | At any time
on any day, the value of the underlying index published at such time on
such day under the Bloomberg ticker symbol “INDU,” or in the case of any
successor index, the Bloomberg ticker symbol for such
index. | | |
| Index percent
change: | (final index
value – initial index value) / initial index value | | |
| Initial index
value: | 11,018.66,
which is the index closing value on the pricing date | | |
| Final index
value: | The index
closing value on the valuation date | | |
| Downside threshold
value: | 8,263.995,
which is 75% of the initial index value | | |
| Valuation
date: | April 17,
2013, subject to adjustment for non-index business days and certain market
disruption events | | |
| CUSIP: | 617484480 | | |
| ISIN: | US6174844802 | | |
| Listing: | The LASERS
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 concerning
plan of distribution; conflicts of interest.” | | |
| Commissions and Issue
Price: | Price to
Public | Agent’s Commissions (1) | Proceeds to
Issuer |
| Per LASERS | $10 | $0.30 | $9.70 |
| Total | $7,300,000 | $219,000 | $7,081,000 |

(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 $0.30 for each LASERS they sell. See “Supplemental information concerning plan of distribution; conflicts of interest” on page 5. For additional information, see “Plan of Distribution (Conflicts of Interest)” in the accompanying prospectus supplement for LASERS.

The LASERS involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 10.

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.

EFPlaceholder Prospectus Supplement for LASERS dated February 23, 2010

EFPlaceholder Prospectus dated December 23, 2008

THE LASERS 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.

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Fact Sheet

The LASERS 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 LASERS and the prospectus, as supplemented or modified by this pricing supplement. At maturity, an investor will receive for each stated principal amount of LASERS that the investor holds an amount in cash that may be greater than, equal to or less than the stated principal amount based on (i) the index closing value on the valuation date and (ii) whether the underlying index has declined to or below the downside threshold value at any time from but excluding the pricing date to and including the valuation date. The LASERS are senior unsecured notes issued as part of Morgan Stanley’s Series F Global Medium-Term Notes program. All payments on the LASERS are subject to the credit risk of Morgan Stanley. “Index LASERS SM ” is a registered service mark of Citigroup Global Markets Inc. Used under license.

| Key Dates — Pricing
date: | Original issue date (settlement
date): | Maturity
date: |
| --- | --- | --- |
| April 16,
2010 | April 22,
2010 (4 business days after the pricing date) | April 22,
2013 (subject to postponement as described
below) |

| Key
Terms | |
| --- | --- |
| Issuer: | Morgan
Stanley |
| Underlying
index: | Dow Jones
Industrial Average SM |
| Underlying index
publisher: | Dow Jones
& Company, Inc. |
| Aggregate principal
amount: | $7,300,000 |
| Issue
price: | $10 per
LASERS |
| Stated principal
amount: | $10 per
LASERS |
| Denominations: | $10 per
LASERS and integral multiples thereof |
| Interest: | None |
| Payment at
maturity: | $10 + index
return amount. This payment may be greater than, equal to or
less than the stated principal amount. |
| Index return
amount: | If the index
value is greater
than the downside threshold value at all times from but
excluding the pricing date to and including the valuation date (whether
intra-day or at the close of trading on any index business day), the index
return amount will be positive and will
equal: $10 x [the
greater of (x) the index percent change and (y) the fixed
percentage] If the index
value is less than or
equal to the downside threshold value at any time from but
excluding the pricing date to and including the valuation date (whether
intra-day or at the close of trading on any index business day), the index
return amount will equal: $10 x the
index percent change In
this scenario, the payment at maturity may be less, and potentially
significantly less, than the stated principal amount and could be zero.
There is no minimum payment at maturity on the LASERS. |
| Fixed
percentage: | 17% |
| Index
value: | At any time
on any day, the value of the underlying index published at such time on
such day under the Bloomberg ticker symbol “INDU,” or in the case of any
successor index, the Bloomberg ticker symbol for such
index. |
| Index percent
change: | (final index
value – initial index value) / initial index value |
| Initial index
value: | 11,018.66,
which is the index closing value on the pricing date as published by the
underlying index publisher |
| Final index
value: | The index
closing value on the valuation date as published by the underlying index
publisher |
| Downside threshold
value: | 8,263.995,
which is 75% of the initial index value |
| Valuation
date: | April 17,
2013, 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
10. |

April 2010 Page 2

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

| General
Information | |
| --- | --- |
| Listing: | The LASERS
will not be listed on any securities exchange. |
| CUSIP: | 617484480 |
| ISIN: | US6174844802 |
| Minimum ticketing
size: | 100
LASERS |
| Tax considerations : | Although the issuer believes that,
under current law, the LASERS 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 LASERS. |
| | Assuming this treatment of the
LASERS is respected and subject to the discussion in “United States
Federal Taxation” in the accompanying prospectus supplement for LASERS,
the following U.S. federal income tax consequences
should result based on current
law: |

| § | A U.S. Holder should not be required to
recognize taxable income over the term of the LASERS prior to maturity,
other than pursuant to a sale or exchange. |
| --- | --- |
| § | Upon sale, exchange or settlement
of the LASERS at maturity, a U.S. Holder should recognize gain or loss equal to the
difference between the amount realized and the U.S. Holder ’ s tax basis in the
LASERS. Such gain or loss should be long-term capital gain or
loss if the investor has held the LASERS 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 LASERS . 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 LASERS , possibly with
retroactive effect. Both U.S. and non-U.S. investors
considering an investment in the LASERS should read the discussion under “Risk
Factors” in this document and the discussion under “United States
Federal Taxation” in the accompanying prospectus supplement for LASERS and consult their tax advisers
regarding all aspects of the U.S. federal income tax consequences of an
investment in the LASERS, including possible alternative treatments, 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: | MS &
Co. |
| Use of proceeds and
hedging: | The net
proceeds we receive from the sale of the LASERS will be used for general
corporate purposes and, in part, in connection with hedging our
obligations under the LASERS 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 LASERS by taking positions in the stocks
constituting the underlying index, futures or options contracts listed on
major securities markets on the underlying index or its component
stocks. Such purchase activity could have increased the value
of the underlying index on the pricing date, and, accordingly, the level
above which the underlying index must remain so that the downside
threshold value is not reached and, if the downside threshold value is
reached, could have increased the level at which the underlying index must
be on the valuation date before you would receive at maturity a payment
that exceeds the stated principal amount of the LASERS. For further
information on our use of proceeds and hedging, see “ Use of Proceeds and
Hedging ” in the
accompanying |

April 2010 Page 3

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

| | prospectus supplement for
LASERS. |
| --- | --- |
| 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 LASERS. 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
LASERS 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 LASERS 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 those 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 LASERS. 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 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 LASERS. Because we
may be considered a party in interest with respect to many Plans, the
LASERS 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 LASERS will be deemed to
have represented, in its corporate and its fiduciary capacity, by its
purchase and holding of the LASERS that either (a) it is not a Plan or a
Plan Asset Entity and is not purchasing such LASERS 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 or 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
LASERS 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 LASERS has exclusive responsibility for
ensuring that its purchase, holding and disposition of the LASERS do not
violate the prohibited transaction rules of ERISA or the Code or any
Similar Law. The sale of any LASERS 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 |

April 2010 Page 4

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

| | 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 LASERS 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 LASERS 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 LASERS, either directly or indirectly. |
| Supplemental information concerning plan of distribution; conflicts of
interest: | The agent may distribute the
LASERS 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 MSS B, and their financial
advisors will
collectively receive from the a gent, MS & Co., a fixed sales
commission of $0.30 for each LASERS 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 “ Plan of Distribution (Conflicts of
Interest)” and “ Use of Proceeds and
Hedging ” in the accompanying prospectus
supplement for LASERS. |
| 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 LASERS. We encourage you to read the accompanying prospectus supplement for LASERS and prospectus for this offering, which can be accessed via the hyperlinks on the front page of this document.

April 2010 Page 5

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Hypothetical Payments on the LASERS at Maturity

The following table illustrates the return on the LASERS and the payment at maturity for a range of hypothetical percentage changes in the final index value, depending on whether or not the value of the underlying index has declined to or below the downside threshold value at any time from but excluding the pricing date to and including the valuation date. The table below is based on the following values:

| Stated principal
amount: | $10.00 |
| --- | --- |
| Hypothetical initial index
value : | 11,000 |
| Hypothetical downside threshold
value: | 8,250 (75% of
the hypothetical initial index value) |
| Fixed
percentage: | 17% |

| Final Index Value | Underlying Index
Return | Downside threshold
value has NOT been
reached | | Downside threshold
value has been
reached* | |
| --- | --- | --- | --- | --- | --- |
| | | Return on
LASERS | Payment at
Maturity | Return on
LASERS | Payment at
Maturity |
| 22,000 | 100.00% | 100.00% | $20.00 | 100.00% | $20.00 |
| 20,900 | 90.00% | 90.00% | $19.00 | 90.00% | $19.00 |
| 19,800 | 80.00% | 80.00% | $18.00 | 80.00% | $18.00 |
| 18,700 | 70.00% | 70.00% | $17.00 | 70.00% | $17.00 |
| 17,600 | 60.00% | 60.00% | $16.00 | 60.00% | $16.00 |
| 16,500 | 50.00% | 50.00% | $15.00 | 50.00% | $15.00 |
| 15,400 | 40.00% | 40.00% | $14.00 | 40.00% | $14.00 |
| 14,300 | 30.00% | 30.00% | $13.00 | 30.00% | $13.00 |
| 13,200 | 20.00% | 20.00% | $12.00 | 20.00% | $12.00 |
| 12,650 | 15.00% | 17.00% | $11.70 | 15.00% | $11.50 |
| 12,100 | 10.00% | 17.00% | $11.70 | 10.00% | $11.00 |
| 11,550 | 5.00% | 17.00% | $11.70 | 5.00% | $10.50 |
| 11,000 | 0.00% | 17.00% | $11.70 | 0.00% | $10.00 |
| 10,450 | -5.00% | 17.00% | $11.70 | -5.00% | $9.50 |
| 9,900 | -10.00% | 17.00% | $11.70 | -10.00% | $9.00 |
| 9,350 | -15.00% | 17.00% | $11.70 | -15.00% | $8.50 |
| 8,800 | -20.00% | 17.00% | $11.70 | -20.00% | $8.00 |
| 8,261 | -24.90% | 17.00% | $11.70 | -24.90% | $7.51 |
| 8,250 | -25.00% | N/A | N/A | -25.00% | $7.50 |
| 6,600 | -40.00% | N/A | N/A | -40.00% | $6.00 |
| 5,500 | -50.00% | N/A | N/A | -50.00% | $5.00 |
| 4,400 | -60.00% | N/A | N/A | -60.00% | $4.00 |
| 3,300 | -70.00% | N/A | N/A | -70.00% | $3.00 |
| 2,200 | -80.00% | N/A | N/A | -80.00% | $2.00 |
| 1,100 | -90.00% | N/A | N/A | -90.00% | $1.00 |
| 0 | -100.00% | N/A | N/A | -100.00% | $0.00 |

• In the scenario where the downside threshold value has been reached, the value of the underlying index will need to recover by the valuation date to a level higher than the initial index value in order for investors to receive a payment at maturity that exceeds the stated principal amount of the LASERS.

April 2010 Page 6

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Hypothetical Examples of the Amount Payable at Maturity

The examples below illustrate how the payment at maturity on the LASERS is calculated and are based on the following terms:

| Stated principal
amount: | $10.00 |
| --- | --- |
| Hypothetical initial index
value : | 11,000 |
| Hypothetical downside threshold
value: | 8,250 (75% of
the hypothetical initial index value) |
| Fixed
percentage: | 17% |

EXAMPLE 1: Downside threshold value has NOT been reached and the underlying index appreciates

The value of the underlying index is greater than the downside threshold value at all times from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), and the final index value is higher than the initial index value by 20%.

| Hypothetical
final index value | = | 13,200 |
| --- | --- | --- |
| Index percent
change | = | (final index
value – initial index value) / initial index value |
| | = | (13,200 –
11,000) / 11,000 |
| | = | 20% |
| Index return
amount | = | stated
principal amount x [the
greater of (i) index percent change and (ii) fixed
percentage] |
| | = | $10.00 x 20% |
| | = | $2.00 |
| Payment at
maturity | = | stated
principal amount + index
return amount |
| | = | $10.00 + $2.00 |
| | = | $12.00 |
| Payment
at maturity = $12.00 | | |

EXAMPLE 2: Downside threshold value has NOT been reached and the underlying index declines

The value of the underlying index is greater than the downside threshold value at all times from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), and the final index value is lower than the initial index value by 15%.

| Hypothetical
final index value | = | 9,350 |
| --- | --- | --- |
| Index percent
change | = | (final index
value – initial index value) / initial index value |
| | = | (9,350 –
11,000) / 11,000 |
| | = | –15% |
| Index return
amount | = | stated
principal amount x [the
greater of (i) index percent change and (ii) fixed
percentage] |
| | = | $10.00 x 17% |
| | = | $1.70 |
| Payment at
maturity | = | stated
principal amount + index
return amount |
| | = | $10.00 + $1.70 |
| | = | $11.70 |
| Payment
at maturity = $11.70 | | |

April 2010 Page 7

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

EXAMPLE 3: Downside threshold value has been reached and the underlying index declines

The value of the underlying index was less than or equal to the downside threshold value at one time during the period from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), and the final index level is lower than the initial index level by 50%.

| Hypothetical
final index value | = | 5,500 |
| --- | --- | --- |
| Index percent
change | = | (final index
value – initial index value) / initial index value |
| | = | (5,500 –
11,000) / 11,000 |
| | = | –50% |
| Index return
amount | = | stated
principal amount x index
percent change |
| | = | $10.00 x (–50%) |
| | = | –$5.00 |
| Payment at
maturity | = | stated
principal amount + index return amount, which means
that the payment at maturity is an amount less than the stated
principal amount, because the index return amount is
negative. |
| | = | $10.00 + (–$5.00) |
| | = | $5.00 |
| Payment
at maturity = $5.00 | | |

EXAMPLE 4: Downside threshold value has been reached but the underlying index recovers to appreciate

The value of the underlying index was less than or equal to the downside threshold value at one time during the period from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day); however, the index has subsequently recovered and the final index value is higher than the initial index value by 10%.

| Hypothetical
final index value | = | 12,100 |
| --- | --- | --- |
| Index percent
change | = | (final index
value – initial index value) / initial index value |
| | = | (12,100 –
11,000) / 11,000 |
| | = | 10% |
| Index return
amount | = | stated
principal amount x index
percent change |
| | = | $10.00 x 10% |
| | = | $1.00 |
| Payment at
maturity | = | stated
principal amount + index
return amount |
| | = | $10.00 + $1.00 |
| | = | $11.00 |
| Payment
at maturity = $11.00 | | |

April 2010 Page 8

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Payment at Maturity

At maturity, investors will receive for each $10 stated principal amount of LASERS that they hold a payment equal to the sum of the stated principal amount and an index return amount. The index return amount may be positive, zero or negative.

If the value of the underlying index is greater than the downside threshold value at all times from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), the index return amount will be positive and will equal :

$10 × [ the greater of (x) index percent change and (y) fixed percentage]

where,

| index percent
change | = | ● |
| --- | --- | --- |
| initial index
value | = | 11,018.66,
which is the index closing value on the pricing date |
| final index
value | = | The index
closing value on the valuation date |
| downside
threshold value | = | 8,263.995,
which is 75% of the initial index value |
| fixed
percentage | = | 17%
(approximately 5.6667% per annum) |

If the value of the underlying index is less than or equal to the downside threshold value at any time from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), the index return amount will equal :

$10 x Index Percent Change

If the final index value is less than the initial index value, the index return amount will be negative and the payment at maturity will be less, and may be significantly less, than the stated principal amount. There is no minimum payment at maturity on the LASERS, and, accordingly, you could lose your entire investment.

April 2010 Page 9

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Risk Factors

The following is a non-exhaustive list of certain key risk factors for investors in the LASERS. For further discussion of these and other risks, you should read the section entitled “Risk Factors” beginning on page S-18 of the accompanying prospectus supplement for LASERS. You should also consult with your investment, legal, tax, accounting and other advisers in connection with your investment in the LASERS.

§ LASERS do not pay interest or guarantee return of principal. The terms of the LASERS differ from those of ordinary debt securities in that the LASERS do not pay interest and do not guarantee the return of any of the principal amount at maturity. If the value of the underlying index is less than or equal to the downside threshold value at any time from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day) and 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 $10 stated principal amount of each LASERS by an amount proportionate to the decrease in the value of the underlying index. There is no minimum payment at maturity on the LASERS, and, accordingly, you could lose your entire investment.

§ You will not benefit from the fixed percentage return if the downside threshold value is reached. If the value of the underlying index is less than or equal to the downside threshold value at any time from but excluding the pricing date to and including the valuation date (whether intra-day or at the close of trading on any index business day), the payment at maturity will solely depend on the value of the underlying index on the valuation date and, accordingly, you will lose the benefit of the minimum return based on the fixed percentage of 17%. As a result, you will be exposed on a 1 to 1 basis to any decline in the value of the underlying index.

§ Market price of the LASERS may be influenced by many unpredictable factors. Several factors will influence the value of the LASERS in the secondary market and the price at which MS & Co. may be willing to purchase or sell the LASERS in the secondary market, including: the value, volatility and dividend yield of the underlying index, whether the downside threshold value has been reached, interest and yield rates in the market, time remaining to maturity, geopolitical conditions and economic, financial, political and regulatory or judicial events and any actual or anticipated changes in our credit ratings or credit spreads. You may receive less, and possibly significantly less, than the stated principal amount per LASERS if you try to sell your LASERS prior to maturity.

§ The LASERS 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 LASERS. You are dependent on Morgan Stanley's ability to pay all amounts due on the LASERS at maturity and therefore you are subject to the credit risk of Morgan Stanley. If Morgan Stanley defaults on its obligations under the LASERS, your investment would be at risk and you could lose some or all of your investment. As a result, the market value of the LASERS 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 LASERS.

§ The LASERS will not be listed on any securities exchange and secondary trading may be limited. The LASERS will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the LASERS. MS & Co. may, but is not obligated to, make a market in the LASERS. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the LASERS easily. Because we do not expect that other broker-dealers will participate significantly in the secondary market for the LASERS, the price at which you may be able to trade your LASERS 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 LASERS, it is likely that there would be no secondary market for the LASERS. Accordingly, you should be willing to hold your LASERS to maturity.

§ Adjustments to the underlying index could adversely affect the value of the LASERS. The underlying index publisher may discontinue or suspend calculation or publication of the underlying index at any time. In these circumstances, the calculation agent will have the sole discretion to substitute a successor index that is comparable to the discontinued underlying index and is not precluded from considering indices that are calculated and published by the calculation agent or any of its affiliates.

April 2010 Page 10

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

§ Investing in the LASERS is not equivalent to investing in the underlying index. Investing in the LASERS is not equivalent to investing in the underlying index or its component stocks. Investors in the LASERS will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to stocks that constitute the underlying index.

§ 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 LASERS 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 LASERS and the cost of hedging our obligations under the LASERS 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 LASERS 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 adversely affect the value of the LASERS. One or more of our subsidiaries have carried out, and will continue to carry out, hedging activities related to the LASERS (and possibly 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 on or prior to the pricing date could have increased the initial index value and, therefore, increased the level above which the underlying index must remain so that the downside threshold value is not reached and, if the downside threshold value is reached, increased the level at which the value of the underlying index must be on the valuation date before you would receive at maturity a payment that exceeds the stated principal amount of the LASERS. Additionally, such hedging or trading activities during the term of the LASERS, including on the valuation date, could adversely affect the value of the underlying index on the valuation date and, accordingly, the amount of cash an investor will receive at maturity.

§ The calculation agent, which is a subsidiary of the issuer, will make determinations with respect to the LASERS. As calculation agent, MS & Co. has determined the initial index value and will determine the final index value, whether the index value has declined to or below the downside threshold value at any time during the period from but excluding the pricing date to and including the valuation date, and will calculate the amount of cash you will receive 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 final index value in the event of a discontinuance of the underlying index, may adversely affect the payout to you at maturity.

§ The U.S. federal income tax consequences of an investment in the LASERS 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 prospectus supplement for LASERS (together the “Tax Disclosure Sections”) concerning the U.S. fede ral income tax consequences of an investment in the LASERS . If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative treatment, the timing and character of income on the LASERS 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 LASERS every year at a “comparable yield” determined at the time of issuance and recognize all income and gain in respect of the LASERS as ordinary income. Because the LASERS provide for the return of principal except where the value of the underlying index declines to or below the downside threshold value, the risk that they would be recharacterized, for U.S. federal income tax purposes, as debt instruments giving rise to ordinary income, rather than as an open transaction, is higher than with other non-principal protected equity-linked securities. The issuer does not plan to request a ruling from the IRS regarding the tax treatment of the LASERS , 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 LASERS. The notice focuses in particular on whether to require holders of these instruments to accrue income over the term of their investment. It also

April 2010 Page 11

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

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 LASERS, 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 LASERS, 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.

April 2010 Page 12

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Information about the Underlying Index

The Dow Jones Industrial Average SM . The Dow Jones Industrial Average SM , which we refer to as the index, is a price- weighted index composed of 30 common stocks selected at the discretion of the editors of The Wall Street Journal, which is published by Dow Jones & Company, Inc., which we refer to as Dow Jones, as representative of the broad market of U.S. industry. For additional information about the Dow Jones Industrial Average SM , see the information set forth under “Annex A—Underlying Indices and Underlying Index Publishers Information— Dow Jones Industrial Average SM ” in the accompanying prospectus supplement for LASERS.

License Agreement between Dow Jones and Morgan Stanley. “Dow Jones SM ,” “DJIA SM ” and “Dow Jones Industrial Average SM ” are service marks of Dow Jones and have been licensed for use by Morgan Stanley. See “Annex A—Underlying Indices and Underlying Index Publishers Information—License Agreement between Dow Jones and Morgan Stanley” in the accompanying prospectus supplement for LASERS.

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 April 16, 2010. The graph following the table sets forth the daily intra-day values of the underlying index for the same period. The closing value of the underlying index on April 16, 2010 was 11,018.66. 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 the valuation date and during the term of the LASERS.

| Dow Jones Industrial Average
Index SM | High | Low | Period
End |
| --- | --- | --- | --- |
| 200 5 | | | |
| First
Quarter | 10,940.55 | 10,368.61 | 10,503.76 |
| Second
Quarter | 10,623.07 | 10,012.36 | 10,274.97 |
| Third
Quarter | 10,705.55 | 10,270.68 | 10,568.70 |
| Fourth
Quarter | 10,931.62 | 10,215.22 | 10,717.50 |
| 200 6 | | | |
| First
Quarter | 11,317.43 | 10,667.39 | 11,109.32 |
| Second
Quarter | 11,642.65 | 10,706.14 | 11,150.22 |
| Third
Quarter | 11,718.45 | 10,739.35 | 11,679.07 |
| Fourth
Quarter | 12,510.57 | 11,670.35 | 12,463.15 |
| 200 7 | | | |
| First
Quarter | 12,786.64 | 12,050.41 | 12,354.35 |
| Second
Quarter | 13,676.32 | 12,382.30 | 13,408.62 |
| Third
Quarter | 14,000.41 | 12,845.78 | 13,895.63 |
| Fourth
Quarter | 14,164.53 | 12,743.44 | 13,264.82 |
| 200 8 | | | |
| First
Quarter | 13,056.72 | 11,740.15 | 12,262.89 |
| Second
Quarter | 13,058.20 | 11,346.51 | 11,350.01 |
| Third
Quarter | 11,782.35 | 10,365.45 | 10,850.66 |
| Fourth
Quarter | 10,831.07 | 7,552.29 | 8,776.39 |
| 200 9 | | | |
| First
Quarter | 9,034.69 | 6,547.05 | 7,608.92 |
| Second
Quarter | 8,799.26 | 7,761.60 | 8,447.00 |
| Third
Quarter | 9,829.87 | 8,146.52 | 9,712.28 |
| Fourth
Quarter | 10,548.51 | 9,487.67 | 10,428.05 |
| 2010 | | | |
| First
Quarter | 10,907.42 | 9,908.39 | 10,856.63 |
| Second
Quarter (through April 16, 2010) | 11,144.57 | 10,897.52 | 11,018.66 |

April 2010 Page 1 3

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Dow Jones Industrial Average SM Historical Performance – Daily Intra-day Values January 1, 200 5 to April 16 , 20 10

April 2010 Page 14

Index LASERS SM Based on the Value of the Dow Jones Industrial Average SM due April 22, 2013 Index LeAding StockmarkEt Return Securities

Where You Can Find More Information

Morgan Stanley has filed a registration statement (including a prospectus, as supplemented by the prospectus supplement for LASERS) 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 LASERS 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 LASERS 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:

EFPlaceholder Prospectus Supplement for LASERS dated February 23, 2010

EFPlaceholder Prospectus dated December 23, 2008

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

April 2010 Page 15