MORGAN STANLEY — Capital/Financing Update 2015

Jun 15, 2015

CALCULATION OF REGISTRATION FEE

	Maximum Aggregate	Amount of Registration
Title of Each Class of Securities Offered	Offering Price	Fee
Auto-Callable Securities due 2018	$3,095,000	$359.64

June 2015 Pricing Supplement No. 354 Registration Statement No. 333-200365 Dated June 11, 2015 Filed pursuant to Rule 424(b)(2)

Structured Investments

Opportunities in International Equities

Auto-Callable Securities Based on the Value of the iShares ® MSCI Emerging Markets ETF due June 14, 2018

Principal at Risk Securities

The Auto-Callable Securities Based on the Value of the iShares ® MSCI Emerging Markets ETF due June 14, 2018, which we refer to as the securities, are 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 accompanying product supplement for PLUS, index supplement and prospectus, as supplemented or modified by this document. If the share closing price of the shares of the iShares ® MSCI Emerging Markets ETF, which we refer to as the underlying shares, on the call observation date is greater than or equal to the initial share price, the securities will be automatically redeemed for a fixed amount per security equal to $11.625 (116.25% of the stated principal amount), and no further payments will be made on the securities. If the securities are not automatically redeemed prior to maturity and the final share price is greater than the initial share price, investors will receive the stated principal amount of their investment plus leveraged upside performance of the underlying shares. If the securities are not automatically redeemed prior to maturity and the final share price is less than or equal to the initial share price but is greater than or equal to the trigger level, investors will receive the stated principal amount of their investment. However, if the securities are not automatically redeemed prior to maturity and the final share price is less than the trigger level, investors will lose a significant portion or all of their investment, resulting in a 1% loss for every 1% decline in the share price over the term of the securities. Under these circumstances, the payment at maturity will be less than 85% of the stated principal amount and could be zero. Accordingly, you may lose your entire investment. These securities are for investors who seek a return based on the performance of the underlying shares and who are willing to risk their principal and forgo current income in exchange for the upside leverage feature, which applies only if the securities are not redeemed prior to maturity and the final share price is greater than the initial share price, and the limited protection against loss that applies only if the final share price is greater than or equal to the trigger level. Investors may lose their entire initial investment in the securities . The securities are notes issued as part of Morgan Stanley’s Series F Global Medium-Term Notes program.

All payments are subject to the credit risk of Morgan Stanley. If Morgan Stanley defaults on its obligations, you could lose some or all of your investment. These securities are not secured obligations and you will not have any security interest in, or otherwise have any access to, any underlying reference asset or assets.

FINAL TERMS — Issuer:	Morgan Stanley
Maturity date:	June 14, 2018
Underlying shares:	Shares of the iShares ® MSCI Emerging Markets ETF (the “Fund”)
Aggregate principal amount:	$3,095,000
Stated principal amount:	$10 per security
Issue price:	$10 per security (see “Commissions and issue price” below)
Pricing date:	June 11, 2015
Original issue date:	June 16, 2015 (3 business days after the pricing date)
Early redemption:	If, on the call observation date, the share closing price of the
underlying shares is greater than or equal to the initial share price, the securities will be automatically redeemed for
the early redemption payment on the third business day following such call observation date. No further payments will be made on
the securities once they have been redeemed. If the securities are redeemed prior to maturity, you will receive
only the fixed early redemption payment, regardless of the actual appreciation of the underlying shares, and you will not benefit
from the leverage feature that applies to the payment at maturity if the final share price is greater than the initial share price.
The early redemption payment may be significantly less than the payment at maturity you would have received had the securities
not been automatically redeemed and instead remained outstanding until maturity.
Payment at maturity:	If the securities are not redeemed prior to maturity, investors
will receive a payment at maturity determined as follows: If the final share price is greater than the initial
share price: $10 + leveraged upside payment If the final share price is less than or equal to the initial share price but is greater than or equal to the trigger level: $10 If the final share price is less than the trigger
level: $10 × share performance factor Under these circumstances, the payment at maturity will
be less than the stated principal amount of $10 and will represent a loss of more than 15%, and possibly all, of your investment .
CUSIP / ISIN:	61765G374 / US61765G3746
	Terms continued on the following page
Listing:	The securities will not be listed on any securities exchange.
Agent:	Morgan Stanley & Co. LLC (“MS & Co.”), a wholly-owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest.”
Estimated value on the pricing date:	$9.522 per security. See “Investment Summary” beginning on page 2.
Commissions and issue price:	Price to public	Agent’s commissions and fees	Proceeds to issuer (3)
Per security	$10	$0.25 (1)
		$0.05 (2)	$9.70
Total	$3,095,000	$92,850	$3,002,150

(1) Selected dealers, including Morgan Stanley Wealth Management (an affiliate of the agent), and their financial advisors will collectively receive from the agent, MS & Co., a fixed sales commission of $0.25 for each security they sell. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution (Conflicts of Interest)” in the accompanying product supplement for PLUS.

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

(3) See “Use of proceeds and hedging” on page 17.

The securities 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 document or the accompanying product supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.

You should read this document together with the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. Please also see “Additional Information About the Securities” at the end of this document.

Product Supplement for PLUS dated November 19, 2014 Index Supplement dated November 19, 2014

Prospectus dated November 19, 2014

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Terms continued from previous page:
Early redemption payment:	$11.625 per security (116.25% of the stated principal amount)
Call observation date:	December 12, 2016, subject to postponement for non-trading days and certain market disruption events
Valuation date:	June 11, 2018, subject to postponement for non-trading days and certain market disruption events
Leveraged upside payment:	$10 × leverage factor × share percent increase
Leverage factor:	125%. The leverage factor will be applicable only if the securities are not redeemed prior to maturity and the final share price is greater than or equal to the initial share price.
Share percent increase:	(final share price – initial share price) / initial share price
Share performance factor:	final share price / initial share price
Adjustment factor	1.0, subject to adjustment in the event of certain events affecting the underlying shares
Initial share price:	$40.24, which is the closing price of one underlying share on the pricing date
Final share price:	The share closing price on the valuation date
Share closing price:	On any trading day, the closing price of one underlying share times the adjustment factor on such day
Trigger level:	$34.204, which is 85% of the initial share price

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Investment Summary

Principal at Risk Securities

The Auto-Callable Securities Based on the Value of the iShares ® MSCI Emerging Markets ETF due June 14, 2018 (the “securities”) can be used:

§ As an alternative to direct exposure to the underlying shares that potentially enhances returns for any positive performance of the underlying shares but only if the securities are not redeemed prior to maturity

§ To provide an opportunity to earn the fixed early redemption payment if the share closing price of the underlying shares on the call observation date is greater than or equal to the initial share price

§ To provide limited protection against a loss of principal in the event of a decline of the underlying shares as of the valuation date (if the securities have not been redeemed) but only if the final share price is greater than or equal to the trigger level

If the securities are not redeemed prior to maturity and the final share price is less than the trigger level, the securities are exposed on a 1:1 basis to the negative performance of the underlying shares.

Maturity:	Approximately 3 years (unless redeemed earlier)
Early
redemption payment:	$11.625 per security (116.25% of the stated principal amount)
Leverage
factor:	125% (applicable only if the securities are not redeemed prior to maturity and the final share price is greater than the initial share price)
Trigger
level:	85% of the initial share price
Minimum
payment at maturity:	None. You could lose your entire initial investment in the securities.
Interest:	None

The original issue price of each security is $10. This price includes costs associated with issuing, selling, structuring and hedging the securities, which are borne by you, and, consequently, the estimated value of the securities on the pricing date is less than $10. We estimate that the value of each security on the pricing date is $9.522.

What goes into the estimated value on the pricing date?

In valuing the securities on the pricing date, we take into account that the securities comprise both a debt component and a performance-based component linked to the underlying shares. The estimated value of the securities is determined using our own pricing and valuation models, market inputs and assumptions relating to the underlying shares, instruments based on the underlying shares, volatility and other factors including current and expected interest rates, as well as an interest rate related to our secondary market credit spread, which is the implied interest rate at which our conventional fixed rate debt trades in the secondary market.

What determines the economic terms of the securities?

In determining the economic terms of the securities, including the early redemption payment, the leverage factor and the trigger level, we use an internal funding rate, which is likely to be lower than our secondary market credit spreads and therefore advantageous to us. If the issuing, selling, structuring and hedging costs borne by you were lower or if the internal funding rate were higher, one or more of the economic terms of the securities would be more favorable to you.

What is the relationship between the estimated value on the pricing date and the secondary market price of the securities?

The price at which MS & Co. purchases the securities in the secondary market, absent changes in market conditions, including those related to the underlying shares, may vary from, and be lower than, the estimated value on the pricing date, because the secondary market price takes into account our secondary market credit

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spread as well as the bid-offer spread that MS & Co. would charge in a secondary market transaction of this type and other factors. However, because the costs associated with issuing, selling, structuring and hedging the securities are not fully deducted upon issuance, for a period of up to 6 months following the issue date, to the extent that MS & Co. may buy or sell the securities in the secondary market, absent changes in market conditions, including those related to the underlying shares, and to our secondary market credit spreads, it would do so based on values higher than the estimated value. We expect that those higher values will also be reflected in your brokerage account statements.

MS & Co. may, but is not obligated to, make a market in the securities, and, if it once chooses to make a market, may cease doing so at any time.

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Key Investment Rationale

The securities provide exposure to the performance of the underlying shares. If the share closing price of the underlying shares is greater than or equal to the initial share price on the call observation date, the securities will be automatically redeemed for a fixed amount per security equal to $11.625 (116.25% of the stated principal amount). If the securities are not automatically redeemed prior to maturity and the final share price is greater than the initial share price, investors will receive the stated principal amount of their investment plus leveraged upside performance of the underlying shares. If the securities are not automatically redeemed prior to maturity and the final share price is less than or equal to the initial share price but is greater than or equal to the trigger level, investors will receive the stated principal amount of their investment. However, if the securities are not automatically redeemed prior to maturity and the final share price is less than the trigger level, investors will lose a significant portion or all of their investment, resulting in a 1% loss for every 1% decline in the share price over the term of the securities. Under these circumstances, the payment at maturity will be less than 85% of the stated principal amount and could be zero. Accordingly, you may lose your entire investment.

If the securities are redeemed prior to maturity, you will receive only the fixed early redemption payment, regardless of the actual appreciation of the underlying shares, and you will not benefit from the leverage feature that applies to the payment at maturity if the final share price is greater than the initial share price. The early redemption payment may be significantly less than the payment at maturity you would have received had the securities not been automatically redeemed and instead remained outstanding until maturity.

Early Redemption Feature	If the share closing price of the underlying shares on the call observation date is greater than or equal to the initial share price, the securities will be automatically redeemed for an amount per security equal to the early redemption payment. No further payments will be made on the securities after they have been redeemed.
Leveraged Performance	If the securities are not redeemed prior to maturity, the securities offer investors an opportunity to capture enhanced returns relative to a direct investment in the underlying shares.
Trigger Feature	At maturity, even if the underlying shares have declined over the term of the securities, you will receive your stated principal amount but only if the final share price is greater than or equal to the trigger level.
Early Redemption Scenario	If the share closing price of the underlying shares is greater than or equal to the initial share price on the call observation date, the securities will be automatically redeemed for a fixed amount per security equal to $11.625 (116.25% of the stated principal amount).
Upside Scenario at Maturity	The securities are not redeemed prior to maturity, and the final share price is greater than the initial share price. In this case, at maturity, the securities redeem for the stated principal amount of $10 plus 125% of the increase in the price of the underlying shares.
Par Scenario at Maturity	The securities are not redeemed prior to maturity, and the final share price is less than or equal to the initial share price but is greater than or equal to the trigger level. In this case, you receive the stated principal amount of $10 at maturity even though the underlying shares have depreciated.
Downside Scenario at Maturity	The securities are not redeemed prior to maturity, and the final share price is less than the trigger level. In this case, the securities redeem for at least 15% less than the stated principal amount, and this decrease will be by an amount proportionate to the full decline in the value of the underlying shares over the term of the securities. There is no minimum payment at maturity on the securities. Accordingly, investors could lose their entire investment in the securities.

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How the Securities Work

The following diagrams illustrate the payment upon automatic early redemption or at maturity on the securities based on the following terms:

Stated principal amount:	$10 per security
Early redemption payment:	$11.625 per security (116.25% of the stated principal amount)
Leverage factor:	125%
Trigger level:	85% of the initial share price

Diagram #1: Call Observation Date

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Diagram #2: Payment at Maturity if No Automatic Early Redemption Occurs

Securities Payoff Diagram

How it works

§ Upside Scenario at Maturity: If the securities are not redeemed prior to maturity and the final share price is greater than the initial share price, investors will receive the $10 stated principal amount plus 125% of the appreciation of the underlying shares over the term of the securities.

§ If the underlying shares appreciate 10%, investors will receive a 12.5% return, or $11.25 per security.

§ Par Scenario at Maturity: If the securities are not redeemed prior to maturity and the final share price is less than or equal to the initial share price but is greater than or equal to the trigger level, investors will receive the $10 stated principal amount.

§ If the underlying shares depreciate 10%, investors will receive the $10 stated principal amount.

§ Downside Scenario at Maturity: If the securities are not redeemed prior to maturity and the final share price is less than the trigger level, investors will receive an amount significantly less than the $10 stated principal amount, based on a 1% loss of principal for each 1% decline in the underlying shares.

§ If the underlying shares depreciate 60%, investors will lose 60% of their principal and receive only $4 per security at maturity, or 40% of the stated principal amount.

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Risk Factors

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

§ The securities do not pay interest or guarantee return of any principal. The terms of the securities differ from those of ordinary debt securities in that the securities do not pay interest or guarantee payment of any principal at maturity. If the securities are not redeemed prior to maturity and the final share price is less than the trigger level (which is 85% of the initial share price), the payout at maturity will be an amount in cash that is at least 15% less than the $10 stated principal amount of each security, and this decrease will be by an amount proportionate to the full decrease in the price of the underlying shares. There is no minimum payment at maturity on the securities, and, accordingly, you could lose your entire investment.

§ If the securities a re r e d e eme d prior to maturity , t he a ppr e c i a ti o n pot e nti a l of the securities is l i m i t e d to t h e fixed ea r l y r e d em ption p a y me nt. If t h e share closing price o f t h e underlying shares o n the call observation date is greater than or equal to the initial share price, the securities w ill be aut o mat i ca l ly red e em e d. I n t hi s s ce n ario, the app r ec i ati o n p o tent i al of the securities is li m it e d to t he fixed e a r ly rede m pti o n pa ym ent of $11.625 per security (116.25% of th e st a ted pri n ci p al a mo u nt) r eg ardl e ss of the a ctu a l a p pr e cia t ion of t h e underlying shares (which may be significant), and no f urther pa ym ents w ill be made on the securities o nce t h ey ha v e been r ede e m e d. In ad d it i on, i f the securities are red e e m ed p rior to ma t urit y , y ou w ill not be nefit from the le v era g e f e ature that a pp l ies to t he p a y ment at matu r ity if the final share price is g r eater t han the initial share price. The early redemption payment may be significantly less than the payment at maturity you would have received had the securities not been automatically redeemed and instead remained outstanding until maturity.

§ The underlying shares and the share underlying index are different. The performance of the underlying shares may not exactly replicate the performance of the share underlying index (the index which the underlying shares seek to track) because the underlying shares will reflect transaction costs and fees that are not included in the calculation of the share underlying index. It is also possible that the underlying shares may not fully replicate or may in certain circumstances diverge significantly from the performance of the share underlying index due to the temporary unavailability of certain securities in the secondary market, the performance of any derivative instruments contained in the Fund, differences in trading hours between the underlying shares and the share underlying index or due to other circumstances. The iShares ® MSCI Emerging Markets ETF generally invests at least 90% of its assets in securities of the MSCI Emerging Markets Index (the share underlying index) and in depositary receipts representing securities of the MSCI Emerging Markets Index. The iShares ® MSCI Emerging Markets ETF may invest the remainder of its assets in securities not included in the MSCI Emerging Markets Index but which BlackRock Fund Advisors (the “Investment Adviser”) believes will help the iShares ® MSCI Emerging Markets ETF track the MSCI Emerging Markets Index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by the Investment Adviser .

§ The automatic early redemption feature may limit the term of your investment to approximately 18 months. If the securities are redeemed early, you may not be able to reinvest at comparable terms or returns. The term of your investment in the securities may be limited to as short as approximately 18 months by the automatic early redemption feature of the securities. If the securities are redeemed prior to maturity, you will receive no further payments, and you may be forced to invest in a lower interest rate environment and may not be able to reinvest at comparable terms or returns.

§ The market price will be influenced by many unpredictable factors. Several factors, many of which are beyond our control, will influence the value of the securities in the secondary market and the price at which MS & Co. may be willing to purchase or sell the securities in the secondary market, including the trading price, volatility (frequency and magnitude of changes in value) and dividends of the underlying shares and of the stocks composing the share underlying index, interest and yield rates, time remaining to maturity, geopolitical conditions and economic, financial, political and regulatory or judicial events that affect the underlying shares or equities markets generally and which may affect the final share price of the underlying shares, the occurrence of certain events affecting the underlying shares that may or may not require an adjustment to the adjustment factor, and any actual or anticipated changes in our credit ratings

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or credit spreads. The price of the underlying shares may be, and has recently been, volatile, and we can give you no assurance that the volatility will lessen. See “ iShares ® MSCI Emerging Markets ETF Overview ” below. You may receive less, and possibly significantly less, than the stated principal amount per security if you try to sell your securities prior to maturity

§ The price of the underlying shares is subject to currency exchange risk. Because the price of the underlying shares is related to the U.S. dollar value of stocks underlying the MSCI Emerging Markets Index , holders of the securities will be exposed to currency exchange rate risk with respect to each of the currencies in which such component securities trade. Exchange rate movements for a particular currency are volatile and are the result of numerous factors including the supply of, and the demand for, those currencies, as well as relevant government policy, intervention or actions, but are also influenced significantly from time to time by political or economic developments, and by macroeconomic factors and speculative actions related to the relevant region. An investor’s net exposure will depend on the extent to which the currencies of the component securities strengthen or weaken against the U.S. dollar and the relative weight of each currency. If, taking into account such weighting, the dollar strengthens against the currencies of the component securities represented in the MSCI Emerging Markets Index , the price of the underlying shares will be adversely affected and the payment at maturity on the securities may be reduced.

Of particular importance to potential currency exchange risk are:

· existing and expected rates of inflation;

· existing and expected interest rate levels;

· the balance of payments; and

· the extent of governmental surpluses or deficits in the countries represented in the MSCI Emerging Markets Index and the United States.

All of these factors are in turn sensitive to the monetary, fiscal and trade policies pursued by the governments of various countries represented in the MSCI Emerging Markets Index and the United States and other countries important to international trade and finance.

§ There are risks associated with investments in securities, such as the securities, linked to the value of foreign (and especially emerging markets) equity securities. The underlying shares track the performance of the MSCI Emerging Markets Index, which is linked to the value of foreign (and especially emerging markets) equity securities. Investments in securities linked to the value of foreign equity securities involve risks associated with the securities markets in those countries, including risks of volatility in those markets, governmental intervention in those markets and cross-shareholdings in companies in certain countries. Also, there is generally less publicly available information about foreign companies than about U.S. companies that are subject to the reporting requirements of the Securities and Exchange Commission, and foreign companies are subject to accounting, auditing and financial reporting standards and requirements different from those applicable to U.S. reporting companies. The prices of securities issued in foreign markets may be affected by political, economic, financial and social factors in those countries, or global regions, including changes in government, economic and fiscal policies and currency exchange laws. In addition, the stocks included in the MSCI Emerging Markets Index and that are generally tracked by the underlying shares have been issued by companies in various emerging markets countries, which pose further risks in addition to the risks associated with investing in foreign equity markets generally. Countries with emerging markets may have relatively unstable governments, may present the risks of nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets, and may have less protection of property rights than more developed countries. The economies of countries with emerging markets may be based on only a few industries, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. Local securities markets may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of holdings difficult or impossible at times. Moreover, the economies in such countries may differ unfavorably from the economy in the United States in such respects as growth of gross national product, rate of inflation, capital reinvestment, resources, self-sufficiency and balance of payment positions.

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

§ If the securities are not redeemed prior to maturity, the amount payable on the securities at maturity is not linked to the price of the underlying shares at any time other than the valuation date. If the securities are not redeemed prior to maturity, the final share price will be the share closing price on the valuation date, subject to postponement for non-trading days and certain market disruption events. Even if the price of the underlying shares appreciates prior to the valuation date but then drops by the valuation date, the payment at maturity may be less, and may be significantly less, than it would have been had the payment at maturity been linked to the price of the underlying shares prior to such drop. Although the actual price of the underlying shares on the stated maturity date or at other times during the term of the securities may be higher than the final share price, the payment at maturity will be based solely on the share closing price on the valuation date.

§ Investing in the securities is not equivalent to investing in the underlying shares or the stocks composing the share underlying index. Investing in the securities is not equivalent to investing in the underlying shares, the share underlying index or the stocks that constitute the share underlying index. Investors in the securities will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to the underlying shares or the stocks that constitute the share underlying index.

§ Adjustments to the underlying shares or to the share underlying index could adversely affect the value of the securities. The Investment Adviser seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index. Pursuant to its investment strategy or otherwise, the Investment Adviser may add, delete or substitute the stocks composing the iShares ® MSCI Emerging Markets ETF. Any of these actions could adversely affect the price of the underlying shares and, consequently, the value of the securities. MSCI Inc. (“MSCI”) is responsible for calculating and maintaining the MSCI Emerging Markets Index. MSCI may add, delete or substitute the stocks constituting the MSCI Emerging Markets Index or make other methodological changes that could change the value of the MSCI Emerging Markets Index. MSCI may discontinue or suspend calculation or publication of the MSCI Emerging Markets 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 MSCI Emerging Markets Index and is permitted to consider indices that are calculated and published by the calculation agent or any of its affiliates.

§ The rate we are willing to pay for securities of this type, maturity and issuance size is likely to be lower than the rate implied by our secondary market credit spreads and advantageous to us. Both the lower rate and the inclusion of costs associated with issuing, selling, structuring and hedging the securities in the original issue price reduce the economic terms of the securities, cause the estimated value of the securities to be less than the original issue price and will adversely affect secondary market prices. Assuming no change in market conditions or any other relevant factors, the prices, if any, at which dealers, including MS & Co., may be willing to purchase the securities in secondary market transactions will likely be significantly lower than the original issue price, because secondary market prices will exclude the issuing, selling, structuring and hedging-related costs that are included in the original issue price and borne by you and because the secondary market prices will reflect our secondary market credit spreads and the bid-offer spread that any dealer would charge in a secondary market transaction of this type as well as other factors.

The inclusion of the costs of issuing, selling, structuring and hedging the securities in the original issue price and the lower rate we are willing to pay as issuer make the economic terms of the securities less favorable to you than they otherwise would be.

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However, because the costs associated with issuing, selling, structuring and hedging the securities are not fully deducted upon issuance, for a period of up to 6 months following the issue date, to the extent that MS & Co. may buy or sell the securities in the secondary market, absent changes in market conditions, including those related to the underlying shares, and to our secondary market credit spreads, it would do so based on values higher than the estimated value, and we expect that those higher values will also be reflected in your brokerage account statements.

§ The estimated value of the securities is determined by reference to our pricing and valuation models, which may differ from those of other dealers and is not a maximum or minimum secondary market price. These pricing and valuation models are proprietary and rely in part on subjective views of certain market inputs and certain assumptions about future events, which may prove to be incorrect. As a result, because there is no market-standard way to value these types of securities, our models may yield a higher estimated value of the securities than those generated by others, including other dealers in the market, if they attempted to value the securities. In addition, the estimated value on the pricing date does not represent a minimum or maximum price at which dealers, including MS & Co., would be willing to purchase your securities in the secondary market (if any exists) at any time. The value of your securities at any time after the date of this pricing supplement will vary based on many factors that cannot be predicted with accuracy, including our creditworthiness and changes in market conditions. See also “The market price will be influenced by many unpredictable factors” above.

§ The antidilution adjustments the calculation agent is required to make do not cover every event that could affect the underlying shares. MS & Co., as calculation agent, will adjust the adjustment factor for certain events affecting the underlying shares. However, the calculation agent will not make an adjustment for every event that could affect the underlying shares. If an event occurs that does not require the calculation agent to adjust the adjustment factor, the market price of the securities may be materially and adversely affected.

§ The securities will not be listed on any securities exchange and secondary trading may be limited. The securities will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the securities. MS & Co. may, but is not obligated to, make a market in the securities and, if it once chooses to make a market, may cease doing so at any time. When it does make a market, it will generally do so for transactions of routine secondary market size at prices based on its estimate of the current value of the securities, taking into account its bid/offer spread, our credit spreads, market volatility, the notional size of the proposed sale, the cost of unwinding any related hedging positions, the time remaining to maturity and the likelihood that it will be able to resell the securities. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the securities easily. Since other broker-dealers may not participate significantly in the secondary market for the securities, the price at which you may be able to trade your securities is likely to depend on the price, if any, at which MS & Co. is willing to transact. If, at any time, MS & Co. were to cease making a market in the securities, it is likely that there would be no secondary market for the securities. Accordingly, you should be willing to hold your securities to maturity.

§ The calculation agent, which is a subsidiary of the issuer, will make determinations with respect to the securities. As calculation agent, MS & Co. has determined the initial share price and the trigger level, will determine the final share price, whether the securities will be automatically redeemed prior to maturity, and, if not, whether the underlying shares have decreased to below the trigger level, and will calculate the amount of cash, if any, you will receive at maturity. Moreover, certain determinations made by MS & Co., in its capacity as calculation agent, may require it to exercise discretion and make subjective judgments, such as with respect to the occurrence or non-occurrence of market disruption events and the selection of a successor index or calculation of the final share price in the event of a market disruption event or discontinuance of the underlying shares. These potentially subjective determinations may adversely affect the payout to you at maturity, if any. For further information regarding these types of determinations, see “Description of PLUS—Postponement of Valuation Date(s),” “—Discontinuance of Any ETF Shares and/or Share Underlying Index; Alteration of Method of Calculation,” “—Alternate Exchange Calculation in case of an Event of Default” and “—Calculation Agent and Calculations” and related definitions in the accompanying product supplement. In addition, MS & Co. has determined the estimated value of the securities on the pricing date.

§ Hedging and trading activity by our subsidiaries could potentially adversely affect the value of the securities. One or more of our subsidiaries and/or third-party dealers have carried out, and will continue

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to carry out, hedging activities related to the securities (and to other instruments linked to the underlying shares or the share underlying index), including trading in the the underlying shares and in other instruments related to the underlying shares or the share underlying index. As a result, these entities may be unwinding or adjusting hedge positions during the term of the securities, and the hedging strategy may involve greater and more frequent dynamic adjustments to the hedge as the valuation date approaches. MS & Co. and some of our other subsidiaries also trade the underlying shares or the stocks that constitute the share underlying index and other financial instruments related to the share 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 share price, and, therefore, could have increased the trigger level, which, if the securities are not redeemed prior to maturity, is the level at or above which the underlying shares must close on the valuation date so that investors do not suffer a significant loss on their initial investment in the securities. Additionally, such hedging or trading activities during the term of the securities, including on the valuation date, could potentially affect whether the price of the underlying shares on the valuation date is below the trigger level, and, therefore, whether an investor would receive significantly less than the stated principal amount of the securities at maturity.

§ The U.S. federal income tax consequences of an investment in the securities are uncertain. Please read the discussion under “—Additional provisions―Tax considerations” in this document and the discussion under “United States Federal Taxation” in the accompanying product supplement for PLUS (together the “Tax Disclosure Sections”) concerning the U.S. federal income tax consequences of an investment in the securities. As discussed in the Tax Disclosure Sections, there is a substantial risk that the “constructive ownership” rule could apply, in which case all or a portion of any long-term capital gain recognized by a U.S. Holder could be recharacterized as ordinary income and an interest charge could be imposed. If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative treatment, the timing and character of income on the securities might differ significantly from the tax treatment described in the Tax Disclosure Sections. For example, under one possible treatment, the IRS could seek to recharacterize the securities as debt instruments. In that event, U.S. Holders would be required to accrue into income original issue discount on the securities every year at a “comparable yield” determined at the time of issuance and recognize all income and gain in respect of the securities as ordinary income. Additionally, as discussed under “United States Federal Taxation—FATCA Legislation” in the accompanying product supplement for PLUS, the withholding rules commonly referred to as “FATCA” would apply to the securities if they were recharacterized as debt instruments. The risk that financial instruments providing for buffers, triggers or similar downside protection features, such as the securities, would be recharacterized as debt is greater than the risk of recharacterization for comparable financial instruments that do not have such features. We do not plan to request a ruling from the IRS regarding the tax treatment of the securities, and the IRS or a court may not agree with the tax treatment described in the Tax Disclosure Sections.

In 2007, the U.S. 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. 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” rule, as discussed in this document. 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 securities, 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 securities, including possible alternative treatments, the potential application of the constructive ownership rule, the issues presented by this notice and any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.

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iShares ® MSCI Emerging Markets ETF Overview

The iShares ® MSCI Emerging Markets ETF is an exchange-traded fund that seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Emerging Markets Index ® . The iShares ® MSCI Emerging Markets ETF is managed by iShares ® , Inc. (“iShares”), a registered investment company that consists of numerous separate investment portfolios, including the iShares ® MSCI Emerging Markets ETF. Information provided to or filed with the Securities and Exchange Commission (the “Commission”") by iShares pursuant to the Securities Act of 1933 and the Investment Company Act of 1940 can be located by reference to Commission file numbers 033-97598 and 811-09102, respectively, through the Commission’s website at www.sec.gov. In addition, information may be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated documents. Neither the issuer nor the agent makes any representation that such publicly available documents or any other publicly available information regarding the iShares ® MSCI Emerging Markets ETF is accurate or complete.

Information as of market close on June 11, 2015:

| Ticker
Symbol: | EEM UP | 52
Week High (on 9/5/2014): | $45.85 |
| --- | --- | --- | --- |
| Current
Share Price: | $40.24 | 52
Week Low (on 12/16/2014): | $37.73 |
| 52
Weeks Ago: | $43.80 | | |

The following graph sets forth the daily closing prices of the underlying shares for the period from January 1, 2010 through June 11, 2015. The related table sets forth the published high and low closing prices, as well as the end-of-quarter closing prices, of the underlying shares for each quarter in the same period. The closing price of the underlying shares on June 11, 2015 was $40.24. We obtained the information in the table and graph below from Bloomberg Financial Markets, without independent verification. The historical closing prices of the underlying shares should not be taken as an indication of future performance, and no assurance can be given as to the price of the underlying shares on the valuation date.

Shares of the iShares ® MSCI Emerging Markets ETF Daily Closing Prices, January 1, 2010 to June 11, 2015

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iShares ® MSCI Emerging Markets ETF (CUSIP 61759G182)	High ($)	Low ($)	Period End ($)
2010
First Quarter	43.22	36.83	42.12
Second Quarter	43.98	36.16	37.32
Third Quarter	44.77	37.59	44.77
Fourth Quarter	48.58	44.77	47.62
2011
First Quarter	48.69	44.63	48.69
Second Quarter	50.21	45.50	47.60
Third Quarter	48.46	34.95	35.07
Fourth Quarter	42.80	34.36	37.94
2012
First Quarter	44.76	38.23	42.94
Second Quarter	43.54	36.68	39.19
Third Quarter	42.37	37.42	41.32
Fourth Quarter	44.35	40.14	44.35
2013
First Quarter	45.20	41.80	42.78
Second Quarter	44.23	36.63	38.57
Third Quarter	43.29	37.34	40.77
Fourth Quarter	43.66	40.44	41.77
2014
First Quarter	40.99	37.09	40.99
Second Quarter	43.95	40.82	43.23
Third Quarter	45.85	41.56	41.56
Fourth Quarter	42.44	37.73	39.29
2015
First Quarter	41.07	37.92	40.13
Second Quarter (through June 11, 2015)	44.09	39.86	40.24

This document relates only to the securities referenced hereby and does not relate to the underlying shares. We have derived all disclosures contained in this document regarding iShares from the publicly available documents described above. In connection with the offering of the securities, neither we nor the agent has participated in the preparation of such documents or made any due diligence inquiry with respect to iShares. Neither we nor the agent makes any representation that such publicly available documents or any other publicly available information regarding iShares is accurate or complete. Furthermore, we cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of the underlying shares (and therefore the price of the underlying shares at the time we priced the securities) have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning iShares could affect the value received at maturity with respect to the securities and therefore the value of the securities.

Neither we nor any of our affiliates makes any representation to you as to the performance of the underlying shares.

We and/or our affiliates may presently or from time to time engage in business with iShares. In the course of such business, we and/or our affiliates may acquire non-public information with respect to iShares, and neither we nor any of our affiliates undertakes to disclose any such information to you. In addition, one or more of our affiliates may publish research reports with respect to the underlying shares. The statements in the preceding two sentences are not intended to affect the rights of investors in the securities under the securities laws. As a prospective purchaser of the securities, you should undertake an independent investigation of iShares as in your judgment is appropriate to make an informed decision with respect to an investment in the underlying shares.

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iShares ® is a registered trademark of BlackRock Institutional Trust Company, N.A. (“BTC”). The securities are not sponsored, endorsed, sold, or promoted by BTC. BTC makes no representations or warranties to the owners of the securities or any member of the public regarding the advisability of investing in the securities. BTC has no obligation or liability in connection with the operation, marketing, trading or sale of the securities.

The MSCI Emerging Markets Index SM . The MSCI Emerging Markets Index SM is a stock index calculated, published and disseminated daily by MSCI Inc. and is intended to provide performance benchmarks for certain emerging equity markets including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Russia, Qatar, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates. The MSCI Emerging Markets Index SM is described in “MSCI Emerging Markets Index SM ” and “MSCI Global Investable Market Indices Methodology” in the accompanying index supplement.

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Additional Information About the Securities

Please read this information in conjunction with the summary terms on the front cover of this document.

| Additional
provisions: | |
| --- | --- |
| Share
underlying index: | MSCI Emerging Markets Index |
| Securities: | The accompanying product supplement refers to the securities as
the “PLUS” and “Trigger PLUS.” |
| Denominations: | $10 per security and integral multiples thereof |
| Minimum
ticketing size: | $1,000 / 100 securities |
| Interest: | None |
| Postponement
of call observation date: | If the scheduled call observation date is not a trading day or if
a market disruption event occurs on that day, the call observation date will be postponed in accordance with the procedures
set forth in the section entitled “Description of PLUS—Postponement of Valuation Date(s)” in the accompanying
product supplement for PLUS. |
| 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 postponed to the second business day following the valuation date as postponed. |
| Additional
information related to calculating the final share price: | If a market disruption
event occurs with respect to the underlying shares, the calculation agent may determine the share closing price in accordance
with the procedures set forth in the product supplement for PLUS. You should refer to the section “Description of
PLUS—Share Closing Price” in the product supplement for PLUS for more information. If the underlying shares
are subject to a stock split or reverse stock split, the calculation agent may make the antidilution adjustments in accordance
with the procedures set forth in the product supplement for PLUS. You should refer to the section “Description of
PLUS—Antidilution Adjustments for PLUS linked to Exchange-Traded Funds” in the product supplement for PLUS
for more information. If no closing price of
the underlying shares is available on the valuation date or the call observation date, as applicable, through discontinuance or
liquidation of the Fund, the calculation agent may determine the share closing price in accordance with the procedures set forth
in the product supplement for PLUS. You should refer to the section “Description of PLUS—Discontinuance of Any ETF
Shares and/or Share Underlying Index; Alteration of Method of Calculation” in the product supplement for PLUS for more information. |
| Tax considerations: | Although there is uncertainty
regarding the U.S. federal income tax consequences of an investment in the securities due to the lack of governing authority,
in the opinion of our counsel, Davis Polk & Wardwell LLP, under current law, and based on current market conditions, a
security should be treated as a single financial contract that is an “open transaction” for U.S. federal income
tax purposes. |
| | Assuming this treatment
of the securities is respected and subject to the discussion in “United States Federal Taxation” in the accompanying
product supplement for PLUS, 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 securities prior to settlement, other
than pursuant to a sale or exchange. |
| | § Upon sale, exchange or settlement of the securities, 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 securities. Subject to the discussion below concerning
the potential application of the “constructive ownership” rule, such gain or loss should be long-term capital
gain or loss if the investor has held the securities for more than one year, and short-term capital gain or loss otherwise. |
| | Because the securities
are linked to shares of an exchange-traded fund, although the matter is not clear, there is a substantial risk that an investment
in the securities will be treated as a “constructive ownership transaction” under Section 1260 of the Internal
Revenue Code of 1986, as amended (the “Code”). If this treatment applies, all or a portion of any long-term
capital gain of the U.S. Holder in respect of the securities could be recharacterized as ordinary income (in which case an
interest charge will be imposed). Due to the lack of governing authority, our counsel is unable to opine as to
whether or how Section 1260 of the Code applies to the securities. U.S. investors should read the section entitled
“United States Federal |

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| | Taxation—Tax
Consequences to U.S. Holders—Tax Treatment of the PLUS—Possible Application of Section 1260 of the Code”
in the accompanying product supplement for PLUS for additional information and consult their tax advisers regarding the
potential application of the “constructive ownership” rule. In
2007, the U.S. 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.
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” rule, as discussed above. 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 securities, possibly with retroactive effect. Both
U.S. and non-U.S. investors considering an investment in the securities should read the discussion under “Risk Factors”
in this document and the discussion under “United States Federal Taxation” in the accompanying product supplement
for PLUS and consult their tax advisers regarding all aspects of the U.S. federal income tax consequences of an investment
in the securities, including possible alternative treatments, the potential application of the constructive ownership
rule, the issues presented by the aforementioned notice and any tax consequences arising under the laws of any state,
local or non-U.S. taxing jurisdiction. The
discussion in the preceding paragraphs under “Tax considerations” and the discussion contained in the section entitled
“United States Federal Taxation” in the accompanying product supplement for PLUS, insofar as they purport to describe
provisions of U.S. federal income tax laws or legal conclusions with respect thereto, constitute the full opinion of Davis Polk
& Wardwell LLP regarding the material U.S. federal tax consequences of an investment in the securities. |
| --- | --- |
| Trustee: | The Bank of New York Mellon |
| Calculation
agent: | MS & Co. |
| Use
of proceeds and hedging: | The proceeds we receive
from the sale of the securities will be used for general corporate purposes. We will receive, in aggregate, $10 per security
issued, because, when we enter into hedging transactions in order to meet our obligations under the securities, our hedging
counterparty will reimburse the cost of the agent’s commissions. The costs of the securities borne by you and described
beginning on page 2 above comprise the agent’s commissions and the cost of issuing, structuring and hedging the
securities. On or prior to the pricing
date, we hedged our anticipated exposure in connection with the securities by entering into hedging transactions with our subsidiaries
and/or third party dealers. We expect our hedging counterparties to have taken positions in the underlying shares and in futures
and options contracts on the underlying shares or any component stocks of the share underlying index. Such purchase activity could
have increased the price of the underlying shares on the pricing date, and therefore, could have increased the trigger level,
which, if the securities are not redeemed prior to maturity, is the price at or above which the underlying shares must close on
the valuation date so that investors do not suffer a significant loss on their initial investment in the securities. In addition,
through our subsidiaries, we are likely to modify our hedge position throughout the life of the securities, including on the valuation
date, by purchasing and selling the underlying shares, futures or options contracts on the underlying shares or component stocks
of the share underlying index listed on major securities markets or positions in any other available securities or instruments
that we may wish to use in connection with such hedging activities. As a result, these entities may be unwinding or adjusting
hedge positions during the term of the securities, and the hedging strategy may involve greater and more frequent dynamic adjustments
to the hedge as the valuation date approaches. We cannot give any assurance that our hedging activities will not affect the price
of the underlying shares, and, therefore, adversely affect the value of the securities or the payment you will receive at maturity,
if any. For further information on our use of proceeds and hedging, see “Use of Proceeds and Hedging” in the accompanying
product supplement for 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 |

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consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances before authorizing an investment in the securities. 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”). 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 securities 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 securities 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 securities. 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 securities. Because we may be considered a party in interest with respect to many Plans, the securities 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 securities will be deemed to have represented, in its corporate and its fiduciary capacity, by its purchase and holding of the securities that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing such securities 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 securities on behalf of or with “plan assets” of any Plan consult with their counsel regarding the availability of exemptive relief. The securities are contractual financial instruments. The financial exposure provided by the securities is not a substitute or proxy for, and is not intended as a substitute or proxy for, individualized investment management or advice for the benefit of any purchaser or holder of the securities. The securities have not been designed and will not be administered in a manner intended to reflect the individualized needs and objectives of any purchaser or holder of the securities. Each purchaser or holder of any securities acknowledges and agrees that: (i) the purchaser or holder or its fiduciary has made and shall make all investment decisions for the purchaser or holder and the purchaser or holder has not relied and

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| | shall
not rely in any way upon us or our affiliates to act as a fiduciary or adviser of the purchaser or holder with respect
to (A) the design and terms of the securities, (B) the purchaser or holder’s investment in the securities, or (C)
the exercise of or failure to exercise any rights we have under or with respect to the securities; (ii) we
and our affiliates have acted and will act solely for our own account in connection with (A) all transactions relating
to the securities and (B) all hedging transactions in connection with our obligations under the securities; (iii) any
and all assets and positions relating to hedging transactions by us or our affiliates are assets and positions of those
entities and are not assets and positions held for the benefit of the purchaser or holder; (iv) our
interests are adverse to the interests of the purchaser or holder; and (v)
neither we nor any of our affiliates is a fiduciary or adviser of the purchaser or holder in connection with any such
assets, positions or transactions, and any information that we or any of our affiliates may provide is not intended
to be impartial investment advice. Each purchaser and holder
of the securities has exclusive responsibility for ensuring that its purchase, holding and disposition of the securities
do not violate the prohibited transaction rules of ERISA or the Code or any Similar Law. The sale of any securities 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 securities if the account, plan or annuity is
for the benefit of an employee of Morgan Stanley or Morgan Stanley Wealth Management or a family member and the employee receives
any compensation (such as, for example, an addition to bonus) based on the purchase of the securities by the account, plan or
annuity. |
| --- | --- |
| Additional
considerations: | Client accounts over which Morgan Stanley, Morgan Stanley Wealth
Management or any of their respective subsidiaries have investment discretion are not permitted to purchase the securities,
either directly or indirectly. |
| Supplemental
information regarding plan of distribution; conflicts of interest: | The agent may distribute
the securities through Morgan Stanley Smith Barney LLC (“Morgan Stanley Wealth Management”), as selected dealer,
or other dealers, which may include Morgan Stanley & Co. International plc (“MSIP”) and Bank Morgan Stanley
AG. Morgan Stanley Wealth Management, MSIP and Bank Morgan Stanley AG are affiliates of Morgan Stanley. Selected dealers,
including Morgan Stanley Wealth Management, and their financial advisors will collectively receive from the agent, Morgan
Stanley & Co. LLC, a fixed sales commission of $0.25 for each security they sell. In addition, Morgan Stanley Wealth
Management will receive a structuring fee of $0.05 for each security. MS & Co. is our wholly-owned
subsidiary and it and other subsidiaries of ours expect to make a profit by selling, structuring and, when applicable,
hedging the securities. MS & Co. will conduct
this offering in compliance with the requirements of FINRA Rule 5121 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
product supplement for PLUS. |
| Validity
of the securities: | In the opinion of Davis Polk & Wardwell LLP, as special counsel
to Morgan Stanley, when the securities offered by this pricing supplement have been executed and issued by Morgan Stanley,
authenticated by the trustee pursuant to the Senior Debt Indenture and delivered against payment as contemplated herein, such
securities will be valid and binding obligations of Morgan Stanley, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness
and equitable principles of general applicability (including, without limitation, concepts of good faith, fair dealing and
the lack of bad faith), provided that such counsel expresses no opinion as to the effect of fraudulent conveyance,
fraudulent transfer or similar provision of applicable law on the conclusions expressed above. This opinion is
given as of the date hereof and is limited to the laws of the State of New York and the General Corporation |

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| | Law of the State of Delaware. In addition,
this opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the Senior
Debt Indenture and its authentication of the securities and the validity, binding nature and enforceability of the Senior
Debt Indenture with respect to the trustee, all as stated in the letter of such counsel dated November 19, 2014, which is
Exhibit 5-a to the Registration Statement on Form S-3 filed by Morgan Stanley on November 19, 2014. |
| --- | --- |
| Contact: | Morgan Stanley Wealth Management clients may contact their local
Morgan Stanley 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. |
| Where
you can find more information: | Morgan Stanley has filed
a registration statement (including a prospectus, as supplemented by the product supplement for PLUS and the index supplement)
with the Securities and Exchange Commission, or SEC, for the offering to which this communication relates. You should
read the prospectus in that registration statement, the product supplement for PLUS, the index supplement 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 product supplement for PLUS, index supplement and prospectus
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: Product
Supplement for PLUS dated November 19, 2014 Index
Supplement dated November 19, 2014 Prospectus
dated November 19, 2014 Terms used but not defined
in this document are defined in the product supplement for PLUS, in the index supplement or in the prospectus. As used
in this document, the “Company,” “we,” “us” and “our” refer to Morgan
Stanley. “Performance Leveraged
Upside Securities SM ” and “PLUS SM ” are our service marks. |

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