MORGAN STANLEY - Capital/Financing Update 2010

CALCULATION OF REGISTRATION FEE

| Title
of Each Class of Securities Offered | Maximum
Aggregate Offering Price | Amount
of Registration Fee |
| --- | --- | --- |
| 95%
Principal Protected Currency-Linked Notes due
2013 | $2,524,000 | $179.96 |

January 2010 Pricing Supplement No. 271 Registration Statement No. 333-156423 Dated January 25, 2009 Filed pursuant to Rule 424(b)(2)

STRUCTURED INVESTMENTS

Opportunities in Currencies

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

The notes are senior unsecured obligations of Morgan Stanley, will pay no interest, provide for a minimum payment amount at maturity of only 95% of principal and have the terms described in this pricing supplement, as supplemented by the accompanying prospectus supplement for partially capital protected currency-linked notes and prospectus. At maturity, an investor will receive for each stated principal amount of notes that the investor holds, an amount in cash that may be more than, equal to or less than the stated principal amount based on the performance of the basket as a whole. All payments on the notes, including the minimum payment amount, are subject to the credit risk of Morgan Stanley.

FINAL TERMS
Issuer:	Morgan
Stanley
Aggregate principal
amount:	$2,524,000
Issue
price:	$1,000 per
note (see “Commissions and Issue Price” below)
Stated principal
amount:	$1,000 per
note
Pricing
date:	January 25,
2010
Original issue
date:	January 28,
2010 (3 business days after the pricing date)
Maturity
date:	July 29,
2013
Minimum payment
amount:	$950 per note
(95% of the stated principal amount)
Interest:	None
Basket:	The basket
consists of nine currencies valued relative to the U.S. dollar (each a
“basket currency”) composed of 70% developed market currencies (equally
weighted among themselves) and 30% emerging market currencies (equally
weighted among themselves), as
follows:

| 70%
Developed Market Currencies | Weighting | Initial
Exchange Rate | Reference
Source | 30%
Emerging Market Currencies | Weighting | Initial
Exchange Rate | Reference
Source |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Australian
dollar (“AUD”) | 11.6667% | 0.90355 | Reuters page
“WMRSPOT12” | Brazilian real
(“BRL”) | 10.0000% | 1.81940 | Reuters page
“BRFR” |
| British pound
(“GBP”) | 11.6667% | 1.62075 | Reuters page
“WMRSPOT07” | Chinese
renminbi (“CNY”) | 10.0000% | 6.8270 | Reuters page
“SAEC” |
| Canadian
dollar (“CAD”) | 11.6667% | 1.05955 | Reuters page
“WMRSPOT09” | Indian rupee
(“INR”) | 10.0000% | 46.18 | Reuters page
“RBIB” |
| Eurozone euro
(“EUR”) | 11.6667% | 1.41560 | Reuters page
“WMRSPOT05” | | | | |
| Japanese yen
(“JPY”) | 11.6667% | 90.12500 | Reuters page
“WMRSPOT12” | | | | |
| Swiss franc
(“CHF”) | 11.6667% | 1.04005 | Reuters page
“WMRSPOT07” | | | | |

| Payment at
maturity: — Supplemental redemption
amount: | If the basket
appreciates relative to the U.S. dollar (i.e. the basket performance is
positive): $1,000 +
supplemental redemption amount If the basket
depreciates or does not appreciate relative to the U.S. dollar (i.e. the
basket performance is zero or negative): $1,000 +
($1,000 x basket performance), subject to the
minimum payment amount If
the basket depreciates, the basket performance will be negative and the
payment at maturity will be less than the stated principal amount of
$1,000 per note by an amount that is proportionate to the percentage
depreciation of the basket. However, under no circumstances
will the payment at maturity be less than the minimum payment amount of
$950 per note. — $1,000 times the basket
performance times the participation rate | | |
| --- | --- | --- | --- |
| Basket
performance: | Sum of the
currency performance values of each of the basket
currencies | | |
| Participation
rate: | 110% | | |
| Currency
performance: | With respect to AUD,
EUR and GBP : (final
exchange rate / initial exchange rate) – 1 With respect to BRL,
CAD, CHF, CNY, INR and JPY : (initial
exchange rate / final exchange rate) – 1 Under the terms of the notes,
a positive currency performance means
the basket currency has appreciated relative to the
U.S. dollar, while a negative currency performance means
the basket currency has depreciated relative to the
U.S. dolla r. | | |
| Currency performance
value: | With respect
to each basket currency, the weighted percentage appreciation or
depreciation of such basket currency as represented by the following
formula: currency
performance x weighting | | |
| Initial exchange
rate: | For each
basket currency, the relevant exchange rate on the pricing date (see
“Basket – Initial Exchange Rate” above) | | |
| Final exchange
rate: | For each
basket currency, the relevant exchange rate on the valuation
date | | |
| Exchange
rate: | With respect to AUD,
EUR and GBP : the rate for conversion of U.S. dollars
into one unit of such basket currency, as determined by reference to the
applicable reference source described herein. With respect to BRL,
CAD, CHF, CNY, INR and JPY : the rate for conversion of
units of such basket currency into one U.S. dollar, as determined by
reference to the applicable reference source described
herein. | | |
| Valuation
date: | July 24,
2013 | | |
| CUSIP /
ISIN: | 617482JT2 /
US617482JT22 | | |
| Listing: | The notes will
not be listed on any securities exchange. | | |
| Agent : | Morgan Stanley
& Co. Incorporated, 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 Note | 100% | 3.00% | 97.00% |
| Total | $2,524,000 | $75,720 | $2,448,280 |

(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 notes purchased by that investor. The lowest price payable by an investor is $990 per note. Please see “Syndicate Information” on page 7 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, Morgan Stanley & Co. Incorporated, a fixed sales commission of 3.00% for each note 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 partially capital protected currency-linked notes.

The notes involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 11.

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 Partially Capital Protected Currency-Linked Notes dated December 23, 2008

Prospectus dated December 23, 2008

THE NOTES 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.

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

How Do Currency Exchange Rates Work?

§ Exchange rates reflect the amount of one currency that can be exchanged for a unit of another currency.

§ The basket performance represents the combined performance of the basket currencies relative to the U.S. dollar as expressed by the exchange rates of the basket currencies from the pricing date to the valuation date.

§ In the case of the Australian dollar, the British pound and the Eurozone euro, exchange rates are expressed as the number of U.S. dollars per unit of the relevant basket currency. As a result, an increase in the exchange rate means that the relevant basket currency has appreciated / strengthened relative to the U.S. dollar. This means that one (1) unit of the relevant basket currency can purchase more U.S. dollars on the valuation date than it did on the pricing date. Viewed another way, it takes fewer of the relevant basket currency to purchase one (1) U.S. dollar on the valuation date than it did on the pricing date. In the example below, the Australian dollar has strengthened relative to the U.S. dollar by 10%:

| Pricing Date (# USD / 1
AUD) | Valuation Date (#USD / 1
AUD) |
| --- | --- |
| 0.88150 | 0.96965 |

§ Conversely, a decrease in the exchange rate means that the relevant basket currency has depreciated / weakened relative to the U.S. dollar. This means that one (1) unit of the relevant basket currency can purchase fewer U.S. dollars on the valuation date than it did on the pricing date. Viewed another way, it takes more of the relevant basket currency to purchase one (1) U.S. dollar on the valuation date than it did on the pricing date. In the example below, the Australian dollar has weakened relative to the U.S. dollar by 10%:

| Pricing Date (# USD / 1
AUD) | Valuation Date (#USD / 1
AUD) |
| --- | --- |
| 0.88150 | 0.79335 |

§ In the case of the Brazilian real, the Canadian dollar, the Chinese renminbi, the Indian rupee, the Japanese yen and the Swiss franc, exchange rates are expressed as the number of units of that currency per one U.S. dollar. As a result, a decrease in the exchange rate means that the relevant basket currency has appreciated / strengthened relative to the U.S. dollar. This means that it takes fewer of the relevant basket currency to purchase one (1) U.S. dollar on the valuation date than it did on the pricing date. Viewed another way, one (1) unit of the relevant basket currency can purchase more U.S. dollars on the valuation date than it did on the pricing date. In the example below, the Chinese renminbi has strengthened relative to the U.S. dollar by 10%:

| Pricing Date (# CNY / 1
USD) | Valuation Date (# CNY / 1
USD) |
| --- | --- |
| 6.82850 | 6.20773 |

§ Conversely, an increase in the exchange rate means that the relevant basket currency has depreciated / weakened relative to the U.S. dollar. This means that it takes more of the relevant basket currency to purchase one (1) U.S. dollar on the valuation date than it did on the pricing date. Viewed another way, one (1) unit of the relevant basket currency can purchase fewer U.S. dollars on the valuation date than it did on the pricing date. In the example below, the Chinese renminbi has weakened relative to the U.S. dollar by 10%:

| Pricing Date (# CNY / 1
USD) | Valuation Date (# CNY / 1
USD) |
| --- | --- |
| 6.82850 | 7.58722 |

Actual exchange rates on the pricing date and valuation date will vary from those used in the examples above.

January 2010 Page 2

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

Fact Sheet

The notes are senior unsecured obligations of Morgan Stanley, will pay no interest, provide for a minimum payment amount at maturity of only 95% of principal and have the terms described in this pricing supplement, as supplemented by the accompanying prospectus supplement for partially capital protected currency-linked notes and prospectus. At maturity, an investor will receive for each stated principal amount of notes that the investor holds, an amount in cash that may be more than, equal to or less than the stated principal amount based on the performance of the basket as a whole. The notes are senior notes issued as part of Morgan Stanley’s Series F Global Medium-Term Notes program . All payments on the notes, including the minimum payment amount, are subject to the credit risk of Morgan Stanley.

| Key
Dates — Pricing
date : | Original issue date : | Maturity
date: |
| --- | --- | --- |
| January 25,
2010 | January 28,
2010 (3 business days after the pricing date) | July 29,
2013 |
| Key
Terms | | |
| Issuer: | Morgan
Stanley | |
| Aggregate principal
amount: | $2,524,000 | |
| Basket: | The basket
consists of nine currencies valued relative to the U.S. dollar (each a
“basket currency”) composed of 70% developed market currencies (equally
weighted among themselves) and 30% emerging market currencies (equally
weighted among themselves), as
follows: | |

| Issue
price: | $1,000 per
note (see “Syndicate Information” on page 7) |
| --- | --- |
| Stated principal
amount: | $1,000 per
note |
| Interest: | None |
| Issuer call
right: | None |
| Denominations: | $1,000 and
integral multiples thereof |
| Minimum payment
amount: | $950 per note
(95% of the stated principal amount) |
| Payment at
maturity: | The
following payment at maturity calculation supersedes in its entirety the
applicable calculation in “Payment at Maturity” in the accompanying
prospectus supplement for partially capital protected currency-linked
notes: If the basket
appreciates relative to the U.S. dollar (i.e. the basket performance is
positive): $1,000 +
supplemental redemption amount If the basket
depreciates or does not appreciate relative to the U.S. dollar (i.e. the
basket performance is zero or negative): $1,000 +
($1,000 x basket performance), subject
to the minimum payment amount If
the basket depreciates, the basket performance will be negative and the
payment at maturity will be less than the stated principal amount of
$1,000 per note by an amount that is proportionate to the percentage
depreciation of the basket. However, under no circumstances
will the payment at maturity be less than the minimum payment amount of
$950 per note. |
| Supplemental redemption
amount: | $1,000 times the basket
performance times the participation rate |
| Basket
performance: | Sum of the
currency performance values of each of the basket
currencies. |
| | A
depreciation of one or more basket currencies will partially or wholly
offset any appreciation in any of the other basket currencies such that
the basket performance as a whole may be less than zero, in which case you
will lose some of your investment. Please
see “Hypothetical Payout on the Notes” starting on page 8 for full
examples of how to calculate the basket performance at
maturity. |
| Currency
performance: | With respect to AUD,
EUR and GBP : (final
exchange rate / initial exchange rate) – 1 With respect to BRL,
CAD, CHF, CNY, INR and JPY : (initial
exchange rate / final exchange rate) – 1 Under the
terms of the notes, a positive currency performance means the basket
currency has appreciated relative to the U.S. dollar, while a negative
currency performance means the basket currency has depreciated relative to
the U.S. dollar. |
| Risk
Factors: | Please
see “Risk Factors” beginning on page
11. |

January 2010 Page 3

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

| Currency performance
value: | With respect
to each basket currency, the weighted percentage
appreciation or depreciation of such basket currency as represented by the
following formula: currency
performance x weighting |
| --- | --- |
| Participation
rate: | 110% |
| Initial exchange
rate: | For each
basket currency, the exchange rate as posted for such basket currency on
the applicable reference source on the pricing date (see “Basket – Initial
Exchange Rate” above) |
| Final exchange
rate: | For each
basket currency, the exchange rate as posted for such basket currency on
the applicable reference source on the valuation date |
| | For
a description of how the final exchange rate will be determined if the
applicable reference source is unavailable and in certain other
circumstances, please see the definition of “exchange rate” under
“Description of Partially Capital Protected Currency-Linked Notes –
General Terms of the Notes – Some Definitions” in the accompanying
prospectus supplement. |
| Exchange
rate: | With respect to AUD,
EUR and GBP : the rate for conversion of U.S. dollars into one unit
of such basket currency, as determined by reference to the applicable
reference source. With respect to BRL,
CAD, CHF, CNY, INR and JPY : the rate for conversion of units of
such basket currency into one U.S. dollar as determined by reference to
the applicable reference source. If any basket
currency is lawfully eliminated, converted, redenominated or exchanged by
the country that issued such basket currency after the pricing date and
prior to the valuation date, the calculation agent, in its sole
discretion, will determine the final exchange rate (or make such
adjustment to the initial exchange rate) on the valuation date, in
accordance with legal requirements and market practice. |
| Valuation
date: | July 24,
2013 |
| Capital protected
notes: | All
references to “capital protected” in the accompanying prospectus
supplement for partially capital protected currency-linked notes shall be
deemed to refer to “principal protected” when read in conjunction with
this pricing supplement. |

January 2010 Page 4

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

| General
Information | |
| --- | --- |
| Listing: | The notes
will not be listed on any securities exchange. |
| CUSIP: | 617482JT2 |
| ISIN : | US617482JT22 |
| Minimum ticketing
size: | $1,000 / 1
note |
| Tax
considerations: | Although the
matter is not free from doubt, the notes will be treated as “contingent
payment debt instruments” for U.S. federal income tax purposes, as
described in the section of the accompanying prospectus supplement called
“United States Federal Taxation — Tax Consequences to U.S.
Holders.” Under this treatment, if you are a U.S. taxable
investor, you will generally be subject to annual income tax based on the
“comparable yield” (as defined in the accompanying prospectus supplement)
of the notes, even though no interest is payable on the
notes. In addition, any gain recognized by U.S. taxable
investors on the sale or exchange, or at maturity, of the notes generally
will be treated as ordinary income. We have determined that the
“comparable yield” is a rate of 2.8024% per annum, compounded
semi-annually. Based on the comparable yield set forth above,
the “projected payment schedule” for a note (assuming an issue price of
$1,000) consists of a projected amount equal to $1,102.4185 due at
maturity. You
should read the discussion under “United States Federal Taxation” in the
accompanying prospectus supplement concerning the U.S. federal income tax
consequences of an investment in the notes. |
| | The following
table states the amount of original issue discount (“OID”) (without taking
into account any adjustments to reflect the difference, if any, between
the actual and the projected amount of any contingent payments on the
notes) that will be deemed to have accrued with respect to a note for each
accrual period (assuming a day count convention of 30 days per month and
360 days per year), based upon the comparable yield set forth
above. |

| ACCRUAL
PERIOD | OID DEEMED TO ACCRUE DURING
ACCRUAL PERIOD (PER NOTE) | TOTAL OID DEEMED TO HAVE ACCRUED
FROM ORIGINAL ISSUE DATE (PER NOTE) AS OF END OF ACCRUAL
PERIOD |
| --- | --- | --- |
| Original Issue Date through June
30, 2010 | $11.8324 | $11.8324 |
| July 1, 2010 through December 31,
2010 | $14.1778 | $26.0102 |
| January 1, 2011 through
June 30, 2011 | $14.3765 | $40.3867 |
| July 1, 2011 through December 31,
2011 | $14.5779 | $54.9646 |
| January 1, 2012 through June 30,
2012 | $14.7822 | $69.7468 |
| July 1, 20 12 through December 31,
2012 | $14.9893 | $84.7361 |
| January 1, 2013 through June 30,
2013 | $15.1993 | $99.9354 |
| July 1, 2013 through the Maturity
Date | $2.4831 | $102.4185 |

The comparable yield and the projected payment schedule are not provided for any purpose other than the determination of U.S. Holders’ accruals of OID and adjustments in respect of the notes, and we make no representation regarding the actual amounts of payments that will be made on a note.

| | If
you are a non-U.S. investor, please also read the section of the
accompanying prospectus supplement called “United States Federal Taxation
— Tax Consequences to Non-U.S. Holders.” |
| --- | --- |
| | You
should consult your tax adviser regarding all aspects of the U.S. federal
income tax consequences of an investment in the notes as well as 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.) |
| Agent: | Morgan
Stanley & Co. Incorporated (“MS & Co.”) |
| Calculation
agent: | Morgan
Stanley Capital Services Inc. (“MSCS”) |
| Payment
currency: | U.S.
dollars |
| Use of proceeds and
hedging: | The net
proceeds we receive from the sale of the notes will be used for general
corporate purposes and, in part, in connection with hedging our
obligations under the notes 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 notes by taking positions in
forwards and options contracts on the basket currencies. Such
purchase activity could have affected the initial exchange rate for the
basket currencies, and, therefore, could have affected the exchange rate
that must prevail with respect to the basket currencies on the valuation
date before you would receive at maturity a payment that exceeds the
stated principal amount of the notes. For further information
on our use of proceeds and hedging, see “Use of Proceeds and Hedging” in
the accompanying prospectus
supplement. |

January 2010 Page 5

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

| Benefit plan investor
considerations : |
| --- |
| In addition,
we and certain of our subsidiaries and affiliates, 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 notes 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 notes 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 notes. 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 notes. |
| Because we
may be considered a party in interest with respect to many Plans, the
notes 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 notes will be deemed to
have represented, in its corporate and its fiduciary capacity, by its
purchase and holding of the notes that either (a) it is not a Plan or a
Plan Asset Entity and is not purchasing such notes 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 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
notes 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 notes has exclusive responsibility for
ensuring that its purchase, holding and disposition of the notes do not
violate the prohibited transaction rules of ERISA or the Code or any
Similar Law. The sale of any notes 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 notes 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 notes by the account, plan or
annuity. |

January 2010 Page 6

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

| 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 notes, either directly or indirectly. |
| --- | --- |
| Supplemental i nformation r egarding p lan of d istribution ; conflicts of
interest : | The agent may
distribute the notes 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 (an affiliate of the Agent), and their financial advisors will
collectively receive from the Agent, MS & Co., a fixed sales
commission of 3.00% for each note 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. |
| 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
notes | Selling
concession | Principal amount of notes
for any single
investor |
| --- | --- | --- |
| 100.00% | 3.00% | <$1MM |
| 99.50% | 2.50% | ≥$1MM and
<$3MM |
| 99.25% | 2.25% | ≥$3MM and
<$5MM |
| 99.00% | 2.00% | ≥$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 notes distributed by such dealers.

This offering summary represents a summary of the terms and conditions of the notes. We encourage you to read the accompanying prospectus supplement for partially capital protected currency-linked notes and prospectus related to this offering, which can be accessed via the hyperlinks on the front page of this document.

January 2010 Page 7

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

Hypothetical Payout on the Notes

Presented below are three full examples showing how to calculate the payment at maturity.

The following hypothetical examples are provided for illustrative purposes only. Actual results will vary. Currency exchange rates or basket performances used in the examples below are hypothetical and do not reflect actual exchange rates or basket performances.

Example 1 : The basket performance is positive.

| Basket
Currency | Weighting | Hypothetical Initial Exchange
Rate | Hypothetical Final Exchange
Rate | % Appreciation
/ Depreciation |
| --- | --- | --- | --- | --- |
| AUD | 11.6667% | 0.88150 | 0.96965 | 10% |
| GBP | 11.6667% | 1.60500 | 1.76550 | 10% |
| CAD | 11.6667% | 1.06190 | 0.96536 | 10% |
| EUR | 11.6667% | 1.42820 | 1.57102 | 10% |
| JPY | 11.6667% | 91.17000 | 82.88182 | 10% |
| CHF | 11.6667% | 1.04630 | 0.95118 | 10% |
| BRL | 10.0000% | 1.78460 | 1.62236 | 10% |
| CNY | 10.0000% | 6.82850 | 6.20773 | 10% |
| INR | 10.0000% | 46.84500 | 42.58636 | 10% |

Basket performance = Sum of currency performance values

[(Final AUD exchange rate / Initial AUD exchange rate) – 1] x 11.6667%, plus

[(Final GBP exchange rate / Initial GBP exchange rate) – 1] x 11.6667%, plus

[(Initial CAD exchange rate / Final CAD exchange rate) – 1] x 11.6667%, plus

[(Final EUR exchange rate / Initial EUR exchange rate) – 1] x 11.6667%, plus

[(Initial JPY exchange rate / Final JPY exchange rate) – 1] x 11.6667%, plus

[(Initial CHF exchange rate / Final CHF exchange rate) – 1] x 11.6667%, plus

[(Initial BRL exchange rate / Final BRL exchange rate) – 1] x 10.0000%, plus

[(Initial CNY exchange rate / Final CNY exchange rate) – 1] x 10.0000%, plus

[(Initial INR exchange rate / Final INR exchange rate) – 1] x 10.0000%

So, using the hypothetical exchange rates above:

| [(0.96965 /
0.88150) - 1] x 11.6667% = 1.1667%, plus |
| --- |
| [(1.76550 /
1.60500) - 1] x 11.6667% = 1.1667%, plus |
| [(1.06190 /
0.96536) - 1] x 11.6667% = 1.1667%, plus |
| [(1.57102 /
1.42820) - 1] x 11.6667% = 1.1667%, plus |
| [(91.17000 /
82.88182) - 1] x 11.6667% = 1.1667%, plus |
| [(1.04630 /
0.95118) - 1] x 11.6667% = 1.1667%, plus |
| [(1.78460 /
1.62236) - 1] x 10.0000% = 1.0000%, plus |
| [(6.82850 /
6.20773) - 1] x 10.0000% = 1.0000%, plus |
| [(46.84500 /
42.58636) - 1] x 10.0000% = 1.0000% |

Hypothetical basket p erformance = 10%

Payment at maturity = $1,000 + supplemental redemption amount

P articipation r ate = 110%

| Supplemental redemption a mount | $1,000 x basket
performance x participation rate |
| --- | --- |
| = | $1,000 x 10% x 110% =
$110 |

Because the basket performance is greater than zero, investors will receive a supplemental redemption amount. Therefore, the total payment at maturity per note will be $1,110, which is the sum of the $1,000 stated principal amount and the supplemental redemption amount of $110.

January 2010 Page 8

95% Principal Protected Currency-Linked Notes due July 29, 2013

Based on the Performance of a Basket of Nine Currencies Relative to the U.S. Dollar (70% Developed Markets + 30% Emerging Markets)

Example 2 : The b asket performance is negative.

| Basket
Currency | Weighting | Hypothetical Initial Exchange
Rate | Hypothetical Final Exchange
Rate | % Appreciation
/ Depreciation |
| --- | --- | --- | --- | --- |
| AUD | 11.6667% | 0.88150 | 0.79335 | -10% |
| GBP | 11.6667% | 1.60500 | 1.44450 | -10% |
| CAD | 11.6667% | 1.06190 | 0.96536 | 10% |
| EUR | 11.6667% | 1.42820 | 1.14256 | -20% |
| JPY | 11.6667% | 91.17000 | 82.88182 | 10% |
| CHF | 11.6667% | 1.04630 | 1.74383 | -40% |
| BRL | 10.0000% | 1.78460 | 1.62236 | 10% |
| CNY | 10.0000% | 6.82850 | 6.20773 | 10% |
| INR | 10.0000% | 46.84500 | 42.58636 | 10% |