Obligation Morgan Stanleigh 5.45% ( US61761JQK87 ) en USD

Morgan Stanleigh

100 % ▲

Etas-Unis

US61761JQK87 ( en USD )

5.45% par an ( paiement semestriel )

Perpétuelle

Prospectus brochure de l'obligation Morgan Stanley US61761JQK87 en USD 5.45%, échéance Perpétuelle

1 000 USD

1 300 000 000 USD

61761JQK8

BB+ ( Spéculatif )

N/A

29/04/2026 ( Dans 138 jours )

Morgan Stanley est une firme mondiale de services financiers offrant des services de banque d'investissement, de gestion de patrimoine et de courtage à une clientèle institutionnelle et privée.

L'Obligation émise par Morgan Stanleigh ( Etas-Unis ) , en USD, avec le code ISIN US61761JQK87, paye un coupon de 5.45% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le Perpétuelle
L'Obligation émise par Morgan Stanleigh ( Etas-Unis ) , en USD, avec le code ISIN US61761JQK87, a été notée BB+ ( Spéculatif ) par l'agence de notation Standard & Poor's ( S&P ).

424B2 1 dp45881_424b2-seriesh.htm FORM 424B2
CALCULATION OF REGISTRATION FEE

Maximum Aggregate
Amount of Registration

Title of Each Class of Securities Offered
Offering Price
Fee
Depositary Shares each representing 1/25th

$1,300,000,000

$167,440
of a Share of Fixed-To-Floating Rate Non-
Cumulative Preferred Stock, Series H

PROSPECTUS SUPPLEMENT
Filed pursuant to Rule 424(b)(2)
(To Prospectus dated November 21, 2011)
Registration Statement No. 333-178081
1,300,000 DEPOSITARY SHARES
EACH REPRESENTING 1/25TH OF A SHARE OF
FIXED-TO-FLOATING RATE NON-CUMULATIVE PREFERRED STOCK, SERIES H
Each of the 1,300,000 depositary shares offered hereby represents a 1/25th ownership interest in a share of perpetual Fixed-to-Floating Rate Non-
Cumulative Preferred Stock, Series H ("Series H Preferred Stock"), liquidation preference $25,000 per share, of Morgan Stanley, deposited with The Bank
of New York Mellon, as depositary. The depositary shares are evidenced by depositary receipts. As a holder of depositary shares, you are entitled to all
proportional rights and preferences of the Series H Preferred Stock (including dividend, voting, redemption and liquidation rights). You must exercise
such rights through the depositary.
Holders of Series H Preferred Stock will be entitled to receive dividend payments only when, as and if declared by our Board of Directors or a duly
authorized committee of the Board. Any such dividends will be payable from the date of original issue on a non-cumulative basis, semi-annually in
arrears on the 15th day of January and July of each year, commencing on July 15, 2014 and ending on July 15, 2019, and thereafter quarterly in arrears
on the 15th day of January, April, July and October of each year. Any such dividends will be payable at a fixed rate per annum equal to 5.45% from the
original issue date to, but excluding, July 15, 2019 and thereafter at a floating rate per annum equal to the three-month U.S. dollar LIBOR on the related
dividend determination date plus 3.61%. Payment of dividends on the Series H Preferred Stock is subject to certain legal, regulatory and other restrictions
as described elsewhere in this prospectus supplement.
In the event dividends are not declared on Series H Preferred Stock for payment on any dividend payment date, then those dividends will not be cumulative
and will cease to accrue or be payable. If we have not declared a dividend before the dividend payment date for any dividend period, we will have no
obligation to pay dividends accrued for that dividend period, whether or not dividends on the Series H Preferred Stock are declared for any future dividend
period.
We may, at our option, redeem the shares of Series H Preferred Stock (i) in whole or in part, from time to time, on any dividend payment date on or after
July 15, 2019 or (ii) in whole but not in part at any time within 90 days of certain changes to regulatory capital requirements as described under
"Description of Series H Preferred Stock -- Redemption," in each case, at a redemption price of $25,000 per share (equivalent to $1,000 per depositary
share), plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series H Preferred Stock will not have voting
rights, except as set forth herein under "Description of Series H Preferred Stock -- Voting Rights."
Neither the Series H Preferred Stock nor the depositary shares will be listed or displayed on any securities exchange or interdealer quotation system.
Investing in the depositary shares involves risks. See "Risk Factors" beginning on page S-9.
The Series H Preferred Stock and the depositary shares 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.
PRICE $1,000 PER DEPOSITARY SHARE
Underwriting
Price to
Discounts and
Proceeds to Morgan

Public(1)
Commissions
Stanley(1)
Per Depositary Share
$1,000
$15
$985
Total
$1,300,000,000
$19,500,000
$1,280,500,000
(1) Does not include accrued dividends, if any, that may be declared. Dividends in respect of the first scheduled dividend payment date, if declared, will
accrue from the date of original issuance, which is expected to be April 29, 2014.
This prospectus supplement and the accompanying prospectus may be used by the underwriters in connection with offers and sales of the depositary shares in
market-making transactions at negotiated prices related to prevailing market prices at the time of sale or otherwise. The underwriters may act as principal or
agent in such transactions.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the depositary shares in book-entry form only through The Depository Trust Company and its participants, including
Euroclear and Clearstream, Luxembourg, as the case may be, on or about April 29, 2014.

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MORGAN STANLEY

MITSUBISHI UFJ SECURITIES

ABN AMRO
BANCA IMI
BARCLAYS
BB&T CAPITAL MARKETS
BBVA
BMO CAPITAL MARKETS
BNY MELLON CAPITAL MARKETS, LLC
CAPITAL ONE SOUTHCOAST
DEUTSCHE BANK SECURITIES
FIFTH THIRD SECURITIES, INC.
FTN FINANCIAL SECURITIES
KEYBANC CAPITAL MARKETS
LLOYDS SECURITIES
RB INTERNATIONAL MARKETS (USA)
RBC CAPITAL MARKETS
RBS
REGIONS SECURITIES LLC
SANTANDER
SCOTIABANK
SOCIETE GENERALE
SUNTRUST ROBINSON HUMPHREY
TD SECURITIES

US BANCORP
April 22, 2014

TABLE OF CONTENTS

Page

Prospectus Supplement
Summary Information
S-1
Consolidated Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends
S-8
Risk Factors
S-9
Description of Series H Preferred Stock
S-14
Description of Depositary Shares
S-24
U.S. Federal Tax Considerations
S-26
Underwriters (Conflicts of Interest)
S-30
Validity of the Securities
S-32
Benefit Plan Investor Considerations
S-33

Prospectus
Summary
1
Risks Factors
5
Where You Can Find More Information
7
Consolidated Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges

and Preferred Stock Dividends
9
Morgan Stanley
10
Use of Proceeds
11
Description of Debt Securities
11
Description of Units
37
Description of Warrants
42
Description of Purchase Contracts
45
Description of Capital Stock
46
Forms of Securities
55
Securities Offered on a Global Basis Through the Depositary
59
United States Federal Taxation
63
Plan of Distribution (Conflicts of Interest)
67
Legal Matters
69
Experts
69
Benefit Plan Investor Considerations
70

ii

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You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus dated
November 21, 2011. Morgan Stanley has not authorized anyone to provide you with information other than that contained or incorporated by reference in
this prospectus supplement and the accompanying prospectus. Morgan Stanley is offering to sell the depositary shares, and is seeking offers to buy the
depositary shares, only in jurisdictions where such offers and sales are permitted.

The distribution of this prospectus supplement and the accompanying prospectus and the offering of the depositary shares in certain jurisdictions may be
restricted by law. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform
themselves about and observe any restrictions relating to the offering of the depositary shares and the distribution of this prospectus supplement and the
accompanying prospectus outside the United States.

This prospectus supplement is not a prospectus for the purposes of the European Union's Directive 2003/71/EC (and any amendments thereto) as
implemented in member states of the European Economic Area (the "Prospectus Directive"). This prospectus supplement has been prepared on the basis that
all offers of the depositary shares made to persons in the European Economic Area will be made pursuant to an exemption under the Prospectus Directive
from the requirement to produce a prospectus in connection with offers of the depositary shares.

For a description of certain restrictions on offers, sales and deliveries of the depositary shares and on the distribution of this prospectus supplement and
the accompanying prospectus and other offering material relating to the depositary shares, see the section of this prospectus supplement called "Underwriters
(Conflicts of Interest)."

iii

SUMMARY INFORMATION

This summary highlights information contained in this prospectus supplement and the accompanying prospectus. This summary is not complete and does
not contain all the information you should consider before investing in the depositary shares representing interests in our Series H Preferred Stock.

Please note that in this prospectus supplement, references to "Morgan Stanley", "we", "our" and "us" mean only Morgan Stanley and do not include its
consolidated subsidiaries. Also, references to the "accompanying prospectus" mean the accompanying prospectus, dated November 21, 2011, of Morgan
Stanley. The terms described here supplement those described in the accompanying prospectus and, if the terms described here are inconsistent with those
described there, the terms described here are controlling.

Issuer
Morgan Stanley

Securities offered
1,300,000 depositary shares each representing a 1/25th ownership interest in
a share of perpetual Fixed-to-Floating Rate Non-Cumulative Preferred
Stock, Series H, $0.01 par value, with a liquidation preference of $25,000
(equivalent to $1,000 per depositary share) of Morgan Stanley. Each holder
of a depositary share will be entitled, through the depositary, in proportion to
the applicable fraction of a share of Series H Preferred Stock represented by
such depositary share, to all the rights and preferences of the Series H
Preferred Stock represented thereby (including dividend, voting, redemption
and liquidation rights).

Dividends
Dividends on the Series H Preferred Stock, when, as and if declared by our
Board of Directors (or a duly authorized committee of the Board), will accrue
or be payable on the liquidation preference amount from the original issue
date (in the case of the initial dividend period only) or the immediately
preceding dividend payment date, on a non-cumulative basis, semi-annually
in arrears on the 15th day of January and July of each year, commencing on
July 15, 2014 and ending on July 15, 2019 and thereafter quarterly in arrears
on the 15th day of January, April, July and October of each year. Any such
dividends will be payable at a fixed rate per annum equal to 5.45% from the
original issue date to, but excluding, July 15, 2019 (the "fixed rate period")
and at a floating rate per annum equal to the three-month U.S. dollar LIBOR
on the related dividend determination date plus 3.61% from and including
July 15, 2019 (the "floating rate period"). Any such dividends will be
distributed to holders of depositary shares in the manner described under
"Description of Depositary Shares -- Dividends and Other Distributions"
below.

LIBOR for each dividend period during the floating rate period will be the
rate for deposits in U.S. dollars for a period of three months, commencing on
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the first day of such dividend period, that appears on Reuters screen page

S-1

LIBOR01, or any successor page, at approximately 11:00 a.m., London time,
on the second London business day immediately preceding the first day of
such dividend period, except in the circumstances described under
"Description of Series H Preferred Stock -- Dividends" below.

A dividend period is the period from and including a dividend payment date
to but excluding the next dividend payment date or any earlier redemption
date, except that the initial dividend period will commence on and include
the original issue date of the Series H Preferred Stock and will end on and
exclude the July 15, 2014 dividend payment date.

Dividends on the Series H Preferred Stock will not be cumulative. If our
Board of Directors (or a duly authorized committee of the Board) has not
declared a dividend before the dividend payment date for any dividend
period, we will have no obligation to pay dividends accrued for such
dividend period after the dividend payment date for that dividend period,
whether or not dividends on the Series H Preferred Stock are declared for any
future dividend period.

Payment of dividends on the Series H Preferred Stock is subject to certain
legal, regulatory and other restrictions described under "Risk Factors -- Our
Ability to Pay Dividends on the Series H Preferred Stock Depends Upon the
Results of Operations of Our Subsidiaries and Will be Subject to Limitations
Imposed by Federal Regulators or Other Regulatory Considerations" and
"Description of Series H Preferred Stock -- Dividends" below.

The Series H Preferred Stock will be junior as to payment of dividends to
any class or series of our preferred stock that is expressly stated to be senior
as to payment of dividends to the Series H Preferred Stock. If at any time we
have failed to pay, on the scheduled payment date, accrued dividends on any
shares that rank in priority to the Series H Preferred Stock with respect to
dividends, we may not pay any dividends on the Series H Preferred Stock or
redeem or otherwise repurchase any shares of Series H Preferred Stock until
we have paid or set aside for payment the full amount of the unpaid
dividends on the shares that rank in priority with respect to dividends that
must, under the terms of such shares, be paid before we may pay dividends
on, or redeem or repurchase, the Series H Preferred Stock.

So long as any share of Series H Preferred Stock remains outstanding, no
dividend or distribution shall be paid or declared on our junior stock (as
defined below), and no junior stock shall be purchased, redeemed or
otherwise acquired for consideration by us, directly or indirectly,

S-2

during a dividend period, unless the full dividends for the latest completed
dividend period on all outstanding shares of Series H Preferred Stock have
been declared and paid (or declared and a sum sufficient for the payment
thereof has been set aside).
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The foregoing limitation does not apply to:

·repurchases, redemptions or other acquisitions of shares of junior stock
of Morgan Stanley in connection with (1) any employment contract,
benefit plan or other similar arrangement with or for the benefit of any
one or more employees, officers, directors or consultants or (2) a
dividend reinvestment or stockholder stock purchase plan;

·an exchange, redemption, reclassification or conversion of any class or
series of Morgan Stanley's junior stock, or any junior stock of a
subsidiary of Morgan Stanley, for any class or series of Morgan
Stanley's junior stock;

·the purchase of fractional interests in shares of Morgan Stanley's junior
stock under the conversion or exchange provisions of the junior stock or
the security being converted or exchanged;

·any declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock or other property under any
stockholders' rights plan, or the redemption or repurchase of rights
pursuant to the plan; or

·any dividend in the form of stock, warrants, options or other rights
where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks equal or junior to that stock.

In addition, the foregoing limitation shall not restrict the ability of Morgan
Stanley & Co. LLC, or any of our other affiliates, to engage in any market-
making transactions in our junior stock in the ordinary course of business.

As used in this prospectus supplement, "junior stock" means any class or
series of capital stock of Morgan Stanley that ranks junior to the Series H
Preferred Stock as to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up of Morgan Stanley. Junior stock
includes our common stock.

When dividends are not paid in full upon the shares of Series H Preferred
Stock and any shares of parity stock

S-3

(as defined below), all dividends declared with respect to shares of Series H
Preferred Stock and all such parity stock for such dividend period shall be
declared pro rata so that the respective amounts of such dividends shall bear
the same ratio to each other as all accrued but unpaid dividends per share on
the shares of Series H Preferred Stock for such dividend period and all such
parity stock for such dividend period bear to each other.

As used in this prospectus supplement, "parity stock" means any other class
or series of stock of Morgan Stanley that ranks equally with the Series H
Preferred Stock in the payment of dividends (whether cumulative or non-
cumulative) and the distribution of assets upon liquidation, dissolution or
winding up of Morgan Stanley. Parity stock includes our previously issued
Floating Rate Non-Cumulative Preferred Stock, Series A, liquidation
preference $25,000 per share ("Series A Preferred Stock"), our previously
issued 10% Series C Non-Cumulative Non-Voting Perpetual Preferred
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Stock, liquidation preference $1,000 per share ("Series C Preferred Stock"),
our previously issued Fixed-to-Floating Rate Non-Cumulative Preferred
Stock, Series E, liquidation preference $25,000 per share ("Series E
Preferred Stock"), our previously issued Fixed-to-Floating Rate Non-
Cumulative Preferred Stock, Series F, liquidation preference $25,000 per
share ("Series F Preferred Stock") and, if issued, the 6.625% Non-
Cumulative Preferred Stock, Series G, liquidation preference $25,000 per
share ("Series G Preferred Stock") that we are offering concurrently with the
Series H Preferred Stock.

Subject to the foregoing, dividends (payable in cash, stock or otherwise) may
be determined by the Board of Directors (or a duly authorized committee of
the Board) and may be declared and paid on our common stock and any
stock ranking, as to dividends, equally with or junior to the Series H
Preferred Stock from time to time out of any funds legally available for such
payment, and the shares of the Series H Preferred Stock shall not be entitled
to participate in any such dividend.

Dividend payment dates
The 15th day of January and July of each year, commencing on July 15, 2014
and ending on July 15, 2019 and thereafter quarterly in arrears on the 15th
day of January, April, July and October of each year. If any scheduled
dividend payment date up to and including the July 15, 2019 scheduled
dividend payment date is not a business day, then the payment will be made
on the next succeeding business day and no additional dividends will accrue
as a result of that postponement. If any scheduled dividend payment date
thereafter is not a business day, then the dividend payment date will be
postponed to the next succeeding business day unless such day falls in the

S-4

next calendar month, in which case the dividend payment date will be
brought forward to the immediately preceding day that is a business day,
and, in either case, dividends will accrue to, but excluding, the date
dividends are paid. "Business day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or regulation to close in The
City of New York.

Redemption
The Series H Preferred Stock is perpetual and has no maturity date. We
may, at our option, redeem the shares of the Series H Preferred Stock (i) in
whole or in part, from time to time, on any dividend payment date on or after
July 15, 2019 or (ii) in whole but not in part at any time within 90 days
following a Regulatory Capital Treatment Event (as defined in "Description
of Series H Preferred Stock Redemption" below), in each case, at a
redemption price equal to $25,000 per share (equivalent to $1,000 per
depositary share), plus any declared and unpaid dividends to, but excluding,
the date fixed for redemption, without accumulation of any undeclared
dividends. If we redeem the Series H Preferred Stock in whole or in part, the
depositary will redeem a proportionate number of depositary shares.

Neither the holders of Series H Preferred Stock nor the holders of depositary
shares will have the right to require the redemption or repurchase of the
Series H Preferred Stock.

Redemption of Series H Preferred Stock is subject to certain legal, regulatory
and other restrictions described under "Description of Series H Preferred
Stock -- Redemption" below.

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Liquidation rights
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Morgan Stanley, holders of shares of Series H Preferred Stock are entitled to
receive out of assets of Morgan Stanley available for distribution to
stockholders, after satisfaction of liabilities to creditors, if any, before any
distribution of assets is made to holders of our common stock or of any other
class or series of our capital stock ranking junior as to such a distribution to
the Series H Preferred Stock, a liquidating distribution in the amount of
$25,000 per share (equivalent to $1,000 per depositary share) plus any
declared and unpaid dividends, without accumulation of any undeclared
dividends. Distributions will be made only to the extent of Morgan Stanley's
assets that are available after satisfaction of all liabilities to creditors, if any
(pro rata as to the Series H Preferred Stock and any other shares of our stock
ranking equally as to such distribution).

S-5

The Series H Preferred Stock may be fully subordinate to interests held by
the U.S. government in the event of a receivership, insolvency, liquidation,
or similar proceeding, including a proceeding under the "orderly liquidation
authority" provisions of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the "Dodd-Frank Act").

Voting rights
None, except with respect to certain changes in the terms of the Series H
Preferred Stock and in the case of certain dividend non-payments. See
"Description of Series H Preferred Stock -- Voting Rights" below. Holders
of depositary shares must act through the depositary to exercise any voting
rights, as described under "Description of Depositary Shares -- Voting the
Series H Preferred Stock" below.

Ranking
Shares of the Series H Preferred Stock will rank (i) senior to our common
stock and any class or series of our capital stock expressly stated to be junior
to the Series H Preferred Stock, (ii) junior to any class or series of our capital
stock expressly stated to be senior to the Series H Preferred Stock (issued
with the requisite consent of the holders of the Series H Preferred Stock, if
required) and (iii) equally with the Series A Preferred Stock, the Series C
Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock
and, if issued, the Series G Preferred Stock and each other class or series of
preferred stock we may issue that is not expressly stated to be senior or
junior to the Series H Preferred Stock, with respect to the payment of
dividends and the distribution of assets upon our liquidation, dissolution or
winding up. We will generally be able to pay dividends and distributions
upon our liquidation, dissolution or winding up only out of lawfully available
funds for such payment (i.e., after taking account of all indebtedness and
other non-equity claims).

We are not restricted from issuing additional Series H Preferred Stock or
depositary shares representing additional Series H Preferred Stock or
securities similar to the Series H Preferred Stock or such depositary shares,
including any securities that are convertible into or exchangeable for, or that
represent the right to receive, the Series H Preferred Stock or such depositary
shares.

Maturity
The Series H Preferred Stock does not have any maturity date, and we are
not required to redeem or repurchase the Series H Preferred
Stock. Accordingly, the Series H Preferred Stock will remain outstanding
indefinitely, unless and until we decide to redeem it and receive prior
approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") (or any successor appropriate federal banking
agency) to do so, if
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S-6

then required by applicable law.

Preemptive and conversion rights
None.

Listing
Neither the depositary shares nor the Series H Preferred Stock will be listed
on any securities exchange or interdealer market quotation system.

Tax consequences
Subject to customary limitations and restrictions, dividends paid to corporate
U.S. Holders will be eligible for the dividends-received
deduction. Dividends paid to a Non-U.S. Holder (as defined in "U.S.
Federal Tax Considerations" below) generally will be subject to withholding
tax at a 30% rate or a reduced rate specified by an applicable income tax
treaty. For further discussion of the tax consequences relating to the
depositary shares, see "U.S. Federal Tax Considerations" below.

Use of proceeds
We intend to use the net proceeds from the sale of the depositary shares
representing interests in the Series H Preferred Stock for general corporate
purposes. See "Use of Proceeds" in the accompanying prospectus.

Transfer Agent, Registrar and Depositary
The Bank of New York Mellon

Calculation Agent
The Bank of New York Mellon

S-7

CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

The following table sets forth our consolidated ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends for the
periods indicated

2013
2012
2011
2010
2009
Ratio of earnings to fixed charges
1.7
1.0
1.9
1.7
1.2
Ratio of earnings to fixed charges and preferred stock
dividends
1.7
1.0
1.8
1.5
0.9
For purposes of calculating the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred stock dividends, income (loss)
from continuing operations before income taxes does not include dividends on preferred securities subject to mandatory redemption, gain (loss) on
discontinued operations, noncontrolling interests and income or loss from equity investees.

For purposes of calculating both ratios, fixed charges consist of:

·
interest cost, including interest on deposits;

·
interest on discontinued operations;

·
dividends on preferred securities subject to mandatory redemption; and

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·
that portion of rent expense estimated to be representative of the interest factor.

Fixed charges do not include interest expense on uncertain tax liabilities as we record these amounts within the provision for income taxes.

The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock.

The earnings for the fiscal year ended December 31, 2009 were inadequate to cover total fixed charges and preferred stock dividends.

The coverage deficiency for total fixed charges and preferred stock dividends for the fiscal year ended December 31, 2009 was $909 million.

S-8

RISK FACTORS

An investment in the depositary shares is subject to risks. You should carefully review the following risk factors and other information contained in this
prospectus supplement, in documents incorporated by reference in this prospectus supplement and in the accompanying prospectus before deciding whether
this investment is suited to your particular circumstances. For a discussion of the risk factors affecting Morgan Stanley and its business, including liquidity
risk, market risk, credit risk, operational risk, competitive environment, legal risk and international risk, among others, see "Risk Factors" in Part I, Item 1A
of our Annual Report on Form 10-K for the year ended December 31, 2013 and our current and periodic reports filed pursuant to the Securities and
Exchange Act of 1934 that are incorporated by reference into this prospectus supplement and the accompanying prospectus.

You Are Making an Investment Decision with Regard to the Depositary Shares as well as the Series H Preferred Stock

As described in the accompanying prospectus, we are issuing fractional interests in shares of Series H Preferred Stock in the form of depositary
shares. Accordingly, the depositary will rely on the payments it receives on the Series H Preferred Stock to fund all payments on the depositary shares. You
should carefully review the information in the accompanying prospectus and in this prospectus supplement regarding both of these securities.

The Series H Preferred Stock Is Equity and Is Subordinate to Our Existing and Future Indebtedness; Certain of Our Outstanding Indebtedness May
Prevent Us from Paying Dividends on the Series H Preferred Stock If an Interest Payment Is Deferred on such Indebtedness

The shares of Series H Preferred Stock are equity interests in Morgan Stanley and do not constitute indebtedness. As such, the shares of Series H
Preferred Stock will rank junior to all indebtedness and other non-equity claims on Morgan Stanley with respect to assets available to satisfy claims on Morgan
Stanley, including in a liquidation of Morgan Stanley. Additionally, unlike indebtedness, where principal and interest would customarily be payable on
specified due dates, in the case of preferred stock like the Series H Preferred Stock (1) dividends are payable only if declared by our Board of Directors (or a
duly authorized committee of the Board), (2) as a corporation, we are subject to restrictions on payments of dividends and any redemption price out of lawfully
available funds and (3) as a bank holding company, our ability to declare and pay dividends is subject to the oversight of the Federal Reserve Board. Morgan
Stanley has issued outstanding debt securities the terms of which permit us to defer interest payments from time to time, provided that, if we defer interest
payments, we would not be permitted to pay dividends on any of our capital stock, including the Series H Preferred Stock, during such deferral periods.

In addition, the Series H Preferred Stock may be fully subordinate to interests held by the U.S. government in the event of a receivership, insolvency,
liquidation, or similar proceeding, including a proceeding under the "orderly liquidation authority" provisions of the Dodd-Frank Act.

The Series H Preferred Stock May Be Subordinate to Other Preferred Stock We May Issue in the Future

The Series H Preferred Stock will be junior as to payment of dividends to any class or series of our preferred stock that may be issued in the future that is
expressly stated to be senior as to payment of dividends to the Series H Preferred Stock. If at any time we have failed to pay, on the applicable payment date,
accrued dividends on any of those shares that rank in priority with respect to dividends, we may not pay any dividends on the Series H Preferred Stock or
redeem or otherwise repurchase any shares of Series H Preferred Stock until we have paid or set aside for payment the full amount of the unpaid dividends on
the shares that rank in priority with respect to dividends that must, under the terms of such shares, be paid before we may pay dividends on, or redeem or
repurchase, the Series H Preferred Stock. In addition, in the event of any liquidation, dissolution or winding up of Morgan Stanley, holders of the Series H
Preferred Stock will not be entitled to receive the liquidation preference of their shares until we have paid or set aside an amount sufficient to pay in full the
liquidation preference of any class or series of our capital stock ranking senior as to rights upon liquidation, dissolution or winding up.

Dividends on the Series H Preferred Stock Are Discretionary and Non-Cumulative

Dividends on the Series H Preferred Stock are discretionary and non-cumulative. Consequently, if our Board of Directors (or a duly authorized committee
of the Board) does not authorize and declare a dividend for any dividend

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period, holders of the Series H Preferred Stock would not be entitled to receive any such dividend, and such unpaid dividend will cease to accrue or be
payable. We will have no obligation to pay dividends accrued for a dividend period after the dividend payment date for such period if our Board of Directors
(or a duly authorized committee of the Board) has not declared such dividend before the related dividend payment date, whether or not dividends are declared
for any subsequent dividend period with respect to the Series H Preferred Stock or any other preferred stock we may issue.

Our Ability to Pay Dividends on the Series H Preferred Stock Depends Upon the Results of Operations of Our Subsidiaries

Our ability to declare and pay dividends is primarily dependent on the receipt of dividends, distributions and other payments from our subsidiaries.
Payments to us by our subsidiaries will be contingent upon our subsidiaries' earnings, business considerations and various regulatory considerations.

Our Ability to Pay Dividends on the Series H Preferred Stock May be Limited by Extensive and Changing Regulatory Considerations

We and our broker-dealer, bank and other subsidiaries are subject to extensive laws, regulations and rules, both in the U.S. and internationally, that may
limit directly or indirectly the payment of dividends on the Series H Preferred Stock.

In particular, our ability to make dividend payments depends on the Federal Reserve Board's assessment of the capital plans and stress tests submitted by
us as part of the Comprehensive Capital Analysis and Review ("CCAR") process. Bank holding companies with $50 billion or more of consolidated assets,
such as us, must submit an annual capital plan to the Federal Reserve, taking into account the results of separate stress tests designed by us and by the Federal
Reserve.

In addition to these capital planning requirements, the Office of the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance
Corporation and certain international regulators have authority to prohibit or to limit the payment of dividends by the banking organizations they supervise,
including our banking subsidiaries, if in the banking regulator's opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the
financial condition of the banking organization. In recent times, regulators in the U.S. and internationally have adopted or are considering extensive new rules
and regulations that impose more stringent capital, leverage and liquidity requirements on us and on our subsidiaries. The direction of the new rules and
regulations is to require the larger bank holding companies such as us to hold more capital, carry less leverage and increase the liquidity of our assets and,
depending upon our results of operations and financial condition in the future, these increased prudential standards may adversely affect our ability to pay
dividends on the Series H Preferred Stock.

Furthermore, many of the new rules and regulations are in proposed form and subject to periods of significant comment and further revisions. As a result,
there is considerable uncertainty about what the final versions of these proposed rules and regulations will be or the impact they may have on us and our
subsidiaries. While we closely monitor various regulatory developments and intend to manage our assets and liabilities and our operations to comply with new
laws, regulations and rules at the time they become effective, there is no assurance that we will be compliant with all such laws, regulations and rules at such
times and a failure to be so compliant could adversely affect our ability to pay dividends on the Series H Preferred Stock.

The Series H Preferred Stock Will be Effectively Subordinated to the Obligations of Our Subsidiaries

We are a bank holding company and conduct substantially all of our operations through our subsidiaries. Our right to receive any assets of any of our
subsidiaries upon their liquidation, reorganization or otherwise, and thus your ability as a holder of the Series H Preferred Stock to benefit indirectly from such
distribution, will be subject to the prior claims of the subsidiaries' creditors. Even if we were a creditor of any of our subsidiaries, our rights as a creditor would
be subordinate to any security interest in the assets of those subsidiaries and any indebtedness of those subsidiaries senior to that held by us.

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General Market Conditions and Unpredictable Factors Could Adversely Affect Market Prices for the Depositary Shares

There can be no assurance about the market prices for the depositary shares. Several factors, many of which are beyond our control, will influence the
market value of the depositary shares. Factors that might influence the market value of the depositary shares include:

·
whether dividends have been declared and are likely to be declared on the Series H Preferred Stock from time to time;

·
our operating performance, financial condition and prospects, or the operating performance, financial condition and prospects of our competitors;

·
our creditworthiness;

·
the ratings given to our securities by credit rating agencies, including any ratings given to the Series H Preferred Stock;

·
changes in interest rates;

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