Bond Morgan Stanley Financial 1.5% ( US61766YAB74 ) in USD

Morgan Stanley Financial

100.402 % ▲

United States

US61766YAB74 ( in USD )

1.5% per year ( payment 2 times a year)

25/05/2026

Prospectus brochure of the bond Morgan Stanley Finance US61766YAB74 en USD 1.5%, maturity 25/05/2026

1 000 USD

2 000 000 USD

61766YAB7

A- ( Upper medium grade - Investment-grade )

A1 ( Upper medium grade - Investment-grade )

25/05/2026 ( In 53 days )

Morgan Stanley is a leading global financial services firm offering investment banking, securities, wealth management, and investment management services to corporations, governments, and individuals.

A bond, identified by ISIN US61766YAB74 and CUSIP 61766YAB7, has been issued by Morgan Stanley Finance, a key financing arm operating out of the United States and affiliated with the globally recognized financial services institution Morgan Stanley, offering investors a fixed-income opportunity with a 1.5% annual interest rate, paid semi-annually, and set to mature on May 25, 2026. Currently trading at 100% of its par value in the market, this USD-denominated instrument represents a total issue size of 2,000,000 USD, with a minimum purchase requirement of 1,000 USD, and benefits from strong credit ratings of A- from Standard & Poor's and A1 from Moody's, reflecting the issuer's robust financial health and its capacity to fulfill its debt obligations.

424B2 1 dp65954_424b2-ps897a1.htm FORM 424B2
CALCULATION OF REGISTRATION FEE

Maximum Aggregate

Amount of Registration
Title of Each Class of Securities Offered

Offering Price

Fee
Fixed to Floating Rate Note due 2026

$1,000,000

$100.70

(1) The maximum aggregate offering price relates to an additional $1,000,000 of securities offered and sold pursuant to this Amendment No. 1 to
Pricing Supplement No. 897 to Registration Statement Nos. 333-200365; 333-200365-12.

April 2 0 1 6
Amendment No. 1 dated May 24, 2016 relating to
Pricing Supplement No. 897
Registration Statement Nos. 333-200365; 333-200365-12
Dated April 26, 2016
Filed pursuant to Rule 424(b)(2)
Morgan Stanley Finance LLC
INTEREST RATE STRUCTURED INVESTMENTS
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
Fully a nd U nc ondit iona lly Gua ra nt e e d by M orga n St a nle y
As further described below, interest will accrue and be payable on the notes quarterly, in arrears, (i) from the original issue date to May 25, 2018: at a rate of
4.00% per annum and (ii) from May 25, 2018 to maturity: at a variable rate equal to 3-Month USD LIBOR plus 1.25%, subject to the minimum interest rate
of 0.00% per annum and the applicable maximum interest rate.
All pa ym e nt s a re subje c t t o our c re dit risk . I f w e de fa ult on our obliga t ions, you c ould lose som e or a ll of your inve st m e nt .
T he se se c urit ie s a re not se c ure d obliga t ions a nd you w ill not ha ve a ny se c urit y int e re st in, or ot he rw ise ha ve a ny a c c e ss t o,
a ny unde rlying re fe re nc e a sse t or a sse t s.
FI N AL T ERM S
I ssue r:
Morgan Stanley Finance LLC ("MSFL")
Gua ra nt or:
Morgan Stanley
Aggre ga t e princ ipa l a m ount :
$3,000,000.
I ssue pric e :
$1,000 per note
St a t e d princ ipa l a m ount :
$1,000 per note
Pric ing da t e :
April 26, 2016
Origina l issue da t e :
May 25, 2016 (21 business days after the pricing date)
M a t urit y da t e :
May 25, 2026
I nt e re st a c c rua l da t e :
May 25, 2016
Pa ym e nt a t m a t urit y:
The payment at maturity per note will be the stated principal amount plus accrued and unpaid interest, if any
Re fe re nc e ra t e :
3-Month USD-LIBOR. Please see "Additional Provisions--Reference Rate" below.
I nt e re st ra t e :
From and including the original issue date to but excluding May 25, 2018: 4.00% per annum
From and including May 25, 2018 to but excluding the maturity date (the "floating interest rate period"):
Reference rate plus 1.25%; subject to the minimum interest rate and the applicable maximum interest
rate.
For the purpose of determining the level of the reference rate applicable to an interest payment period, the level
of the reference rate will be determined two (2) London banking days prior to the related interest reset date at
the start of such interest payment period (each, an "interest determination date").
Interest for each interest payment period during the floating interest rate period is subject to the minimum interest
rate of 0.00% per annum and the applicable maximum interest rate for such interest payment period.
I nt e re st pa ym e nt pe riod:
Quarterly
I nt e re st pa ym e nt pe riod e nd
Unadjusted
da t e s:
I nt e re st pa ym e nt da t e s:
Each February 25, May 25, August 25 and November 25, beginning August 25, 2016; provided that if any such
day is not a business day, that interest payment will be made on the next succeeding business day and no
adjustment will be made to any interest payment made on that succeeding business day.
I nt e re st re se t da t e s:
Each February 25, May 25, August 25 and November 25, beginning May 25, 2018; provided that such interest
reset dates shall not be adjusted for non-business days.
Da y-c ount c onve nt ion:
30/360
M inim um int e re st ra t e :
0.00% per annum during the floating interest rate period
M a x im um int e re st ra t e :
During the floating interest rate period:
· From and including May 25, 2018 to but excluding May 25, 2022: 4.50% per annum
· From and including May 25, 2022 to but excluding May 25, 2024: 5.00% per annum
· From and including May 25, 2024 to but excluding May 25, 2025: 5.50% per annum
· From and including May 25, 2025 to but excluding the maturity date: 6.00% per annum
Re de m pt ion:
Not applicable
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Spe c ifie d c urre nc y:
U.S. dollars
CU SI P / I SI N :
61766YAB7 / US61766YAB74
Book -e nt ry or c e rt ific a t e d not e :
Book-entry
Busine ss da y:
New York
Age nt :
Morgan Stanley & Co. LLC ("MS & Co."), an affiliate of MSFL and a wholly owned subsidiary of Morgan
Stanley. See "Supplemental Information Concerning Plan of Distribution; Conflicts of Interest."
Ca lc ula t ion a ge nt :
Morgan Stanley Capital Services LLC
T rust e e :
The Bank of New York Mellon
Est im a t e d va lue on t he pric ing
$974.40 per note. See "The Notes" on page 2.
da t e :
Com m issions a nd issue pric e :
Pric e t o public
Age nt 's c om m issions(1)
Proc e e ds t o issue r(2)
Pe r not e
$1,000
$3.25
$996.75
T ot a l
$3,000,000
$9,750
$2,990,250
(1) Morgan Stanley or one of our affiliates will pay varying discounts and commissions to dealers, including Morgan Stanley Wealth Management (an
affiliate of the agent) and their financial advisors, of $3.25 per note depending on market conditions. See "Supplemental Information Concerning Plan of
Distribution; Conflicts of Interest." For additional information, see "Plan of Distribution (Conflicts of Interest)" in the accompanying prospectus
supplement.
(2) See "Use of Proceeds and Hedging" on page 6.

T he not e s involve risk s not a ssoc ia t e d w it h a n inve st m e nt in ordina ry de bt se c urit ie s. Se e "Risk Fa c t ors" be ginning on pa ge
1 0 .

T he Se c urit ie s a nd Ex c ha nge Com m ission a nd st a t e se c urit ie s re gula t ors ha ve not a pprove d or disa pprove d t he se se c urit ie s,
or de t e rm ine d if t his pric ing supple m e nt or t he a c c om pa nying prospe c t us supple m e nt a nd prospe c t us is t rut hful or c om ple t e .
Any re pre se nt a t ion t o t he c ont ra ry is a c rim ina l offe nse .

Y ou should re a d t his doc um e nt t oge t he r w it h t he re la t e d prospe c t us supple m e nt a nd prospe c t us, e a c h of w hic h c a n be
a c c e sse d via t he hype rlink s be low .

Prospe c t us Supple m e nt da t e d Fe brua ry 1 6 , 2 0 1 6 Prospe c t us da t e d Fe brua ry 1 6 , 2 0 1 6

Re fe re nc e s t o "w e ," "us," a nd "our" re fe r t o M orga n St a nle y or M SFL, or M orga n St a nle y a nd M SFL c olle c t ive ly, a s t he
c ont e x t re quire s.

T he not e s a re not de posit s or sa vings a c c ount s a nd a re not insure d by t he Fe de ra l De posit I nsura nc e Corpora t ion or a ny
ot he r gove rnm e nt a l a ge nc y or inst rum e nt a lit y, nor a re t he y obliga t ions of, or gua ra nt e e d by, a ba nk .

Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
The Notes

The notes are debt securities of Morgan Stanley Finance LLC ("MSFL") and are fully and unconditionally guaranteed by Morgan
Stanley. From the original issue date until May 25, 2018, interest on the notes will accrue and be payable on the notes quarterly, in
arrears, at 4.00% per annum, and thereafter, during the floating interest rate period, interest on the notes will accrue and be
payable on the notes quarterly, in arrears, at a variable rate equal to 3-Month USD LIBOR plus 1.25%, subject to the minimum
interest rate of 0.00% per annum and the applicable maximum interest rate. We describe the basic features of these notes in the
sections of the accompanying prospectus called "Description of Debt Securities--Floating Rate Debt Securities" and prospectus
supplement called "Description of Notes," subject to and as modified by the provisions described below. All payments on the notes
are subject to our credit risk.

The stated principal amount and issue price of each note is $1,000. This price includes costs associated with issuing, selling,
structuring and hedging the notes, which are borne by you, and, consequently, the estimated value of the notes on the pricing date
is less than the issue price. We estimate that the value of each note on the pricing date is $974.40.

What goes into the estimated value on the pricing date?

In valuing the notes on the pricing date, we take into account that the notes comprise both a debt component and a performance-
based component linked to LIBOR. The estimated value of the notes is determined using our own pricing and valuation models,
market inputs and assumptions relating to LIBOR, instruments based on LIBOR, 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
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at which our conventional fixed rate debt trades in the secondary market.

What determines the economic terms of the notes?

In determining the economic terms of the notes, including the interest rate and the maximum interest rate applicable to each
interest payment period during the floating interest rate period, 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 notes?

The price at which MS & Co. purchases the notes in the secondary market, absent changes in market conditions, including those
related to interest rates and LIBOR, 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 spread as well as the bid-offer spread that MS & Co. would
charge in a secondary market transaction of this type, the costs of unwinding the related hedging transactions and other factors.

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

Additional Provisions

Re fe re nc e Ra t e

"LIBOR" as defined in the accompanying prospectus in the section called "Description of Debt Securities--Floating Rate Debt
Securities" and "--Base Rates" with an index maturity of 3 months and an index currency of U.S. dollars and as displayed on
Reuters Page LIBOR01.

April 2016
Page 2
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
Historical Information

The following graph sets forth the historical percentage levels of the reference rate for the period from January 1, 2006 to May 24,
2016. The historical levels of the reference rate do not reflect the 1.25% spread that will apply to the interest that will accrue on the
notes for each interest payment period during the floating interest rate period, and should not be taken as an indication of its future
performance. We obtained the information in the graph below from Bloomberg Financial Markets, without independent verification.

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* T he bold line s in t he gra ph a bove re pre se nt t he a pplic a ble m a x im um int e re st ra t e for e a c h int e re st
pa ym e nt pe riod during t he floa t ing int e re st ra t e pe riod, a s furt he r de sc ribe d on t he c ove r of t his doc um e nt .

April 2016
Page 3
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
Risk Factors

The notes involve risks not associated with an investment in ordinary floating rate notes. An investment in the notes entails
significant risks not associated with similar investments in a conventional debt security, including, but not limited to, fluctuations in
the reference rate, and other events that are difficult to predict and beyond our control. This section describes the most significant
risks relating to the notes. For a complete list of risk factors, please see the accompanying prospectus supplement and prospectus.
Investors should consult their financial and legal advisers as to the risks entailed by an investment in the notes and the suitability of
the notes in light of their particular circumstances.

The historical performance of the reference rate is not an indication of future performance. The historical
performance of the reference rate should not be taken as an indication of future performance during the term of the notes.
Changes in the levels of the reference rate will affect the trading price of the notes, but it is impossible to predict whether such
levels will rise or fall.

The amount of interest payable on the notes for each interest payment period during the floating
int e re st ra t e pe riod is c a ppe d. The interest rate on the notes for each interest payment period during the floating interest
rate period is capped at the applicable maximum interest rate for such interest payment period. From and including May 25,
2018 to but excluding May 25, 2022, the interest rate on the notes for each interest payment is capped at the maximum
interest rate of 4.50% per annum (equal to a maximum quarterly interest payment of $11.25 for each $1,000 stated principal
amount of notes). From and including May 25, 2022 to but excluding May 25, 2024, the interest rate on the notes for each
interest payment is capped at the maximum interest rate of 5.00% per annum (equal to a maximum quarterly interest payment
of $12.50 for each $1,000 stated principal amount of notes). From and including May 25, 2024 to but excluding May 25, 2025,
the interest rate on the notes for each interest payment is capped at the maximum interest rate of 5.50% per annum (equal to
a maximum quarterly interest payment of $13.75 for each $1,000 stated principal amount of notes). From and including May
25, 2025 to but excluding May 25, 2026, the interest rate on the notes for each interest payment is capped at the maximum
interest rate of 6.00% per annum (equal to a maximum quarterly interest payment of $15.00 for each $1,000 stated principal
amount of notes).

Investors are subject to our credit risk, and any actual or anticipated changes to our credit ratings or
c re dit spre a ds m a y a dve rse ly a ffe c t t he m a rk e t va lue of t he not e s. Investors are dependent on our ability to pay
all amounts due on the notes on interest payment dates and at maturity and therefore investors are subject to our credit risk
and to changes in the market's view of our creditworthiness. If we default on our obligations under the notes, your investment
would be at risk and you could lose some or all of your investment. As a result, the market value of the notes prior to maturity
will be affected by changes in the market's view of our creditworthiness. Any actual or anticipated decline in our credit ratings
or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely affect the value of the
notes.

As a finance subsidiary, MSFL has no independent operations and w ill have no independent assets. As a
finance subsidiary, MSFL has no independent operations beyond the issuance and administration of its securities and will have
no independent assets available for distributions to holders of MSFL securities if they make claims in respect of such securities
in a bankruptcy, resolution or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available
under the related guarantee by Morgan Stanley and that guarantee will rank pari passu with all other unsecured,
unsubordinated obligations of Morgan Stanley. Holders will have recourse only to a single claim against Morgan Stanley and its
assets under the guarantee. Holders of securities issued by MSFL should accordingly assume that in any such proceedings
they would not have any priority over and should be treated pari passu with the claims of other unsecured, unsubordinated
creditors of Morgan Stanley, including holders of Morgan Stanley-issued securities.

The price at w hich the notes may be sold prior to maturity w ill depend on a number of factors and may
be subst a nt ia lly le ss t ha n t he a m ount for w hic h t he y w e re origina lly purc ha se d. Some of these factors
include, but are not limited to: (i) actual or anticipated changes in the level of the reference rate, (ii) volatility of the level of the
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reference rate, (iii) changes in interest and yield rates, (iv) any actual or anticipated changes in our credit ratings or credit
spreads and (v) time remaining to maturity. Generally, the longer the time remaining to maturity and the more tailored the
exposure, the more the market price of the notes will be affected by the other factors described in the preceding sentence.
This can lead to significant adverse changes in the market price of securities like the notes. Depending on the actual or
anticipated level of the reference rate, the market value of the notes is expected to decrease and you may receive substantially
less than 100% of the issue price if you are able to sell your notes prior to maturity.

April 2016
Page 4
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
The rate w e are w illing to pay for securities of this type, maturity and issuance size is likely to be low er
t ha n t he ra t e im plie d by our se c onda ry m a rk e t c re dit spre a ds a nd a dva nt a ge ous t o us. Bot h t he low e r
ra t e a nd t he inc lusion of c ost s a ssoc ia t e d w it h issuing, se lling, st ruc t uring a nd he dging t he not e s in t he
origina l issue pric e re duc e t he e c onom ic t e rm s of t he not e s, c a use t he e st im a t e d va lue of t he not e s t o
be le ss t ha n t he origina l issue pric e a nd w ill a dve rse ly a ffe c t se c onda ry m a rk e t pric e s. Assuming no
change in market conditions or any other relevant factors, the prices, if any, at which dealers, including MS & Co., are willing to
purchase the notes 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, the costs of unwinding the
related hedging transactions as well as other factors.

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

The estimated value of the notes is determined by reference to our pricing and valuation models, w hich
m a y diffe r from t hose of ot he r de a le rs a nd is not a m a x im um or m inim um se c onda ry m a rk e t pric e . 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 notes than those generated by others,
including other dealers in the market, if they attempted to value the notes. 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
notes in the secondary market (if any exists) at any time. The value of your notes 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.

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

Morgan Stanley & Co. LLC, w hich is a subsidiary of Morgan Stanley and an affiliate of MSFL, has
de t e rm ine d t he e st im a t e d va lue on t he pric ing da t e . MS & Co. has determined the estimated value of the notes on
the pricing date.

Our affiliates may publish research that could affect the market value of the notes. They also expect to
he dge t he issue r's obliga t ions unde r t he not e s. One or more of our affiliates may, at present or in the future, publish
research reports with respect to movements in interest rates generally or the reference rate specifically. This research is
modified from time to time without notice to you and may express opinions or provide recommendations that are inconsistent
with purchasing or holding the notes. Any of these activities may affect the market value of the notes. In addition, our affiliates
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expect to hedge the issuer's obligations under the notes and they may realize a profit from that expected hedging activity even
if investors do not receive a favorable investment return under the terms of the notes or in any secondary market transaction.

The calculation agent, w hich is a subsidiary of Morgan Stanley and an affiliate of MSFL, w ill make
de t e rm ina t ions w it h re spe c t t o t he not e s. Any of these determinations made by the calculation agent may adversely
affect the payout to investors. Moreover, certain determinations made by the calculation agent may require it to exercise
discretion and make subjective judgments, such as with respect to the reference rate. These potentially subjective
determinations may adversely affect the payout to you on the notes. For further information regarding these types of
determinations, see "Description of Debt Securities--Base Rates--LIBOR Debt Securities" and related definitions in the
accompanying prospectus.

April 2016
Page 5
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
Use of Proceeds and Hedging

The proceeds from the sale of the notes will be used by us for general corporate purposes. We will receive, in aggregate, $1,000
per note issued, because, when we enter into hedging transactions in order to meet our obligations under the notes, our hedging
counterparty will reimburse the cost of the Agent's commissions. The costs of the notes borne by you and described on page 2
above comprise the Agent's commissions and the cost of issuing, structuring and hedging the notes.

Supplemental Information Concerning Plan of Distribution; Conflicts of Interest

We expect to deliver the notes against payment therefor in New York, New York on May 25, 2016, which will be the twenty-first
scheduled business day following the date of the pricing of the notes. Under Rule 15c6-1 of the Exchange Act, trades in the
secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree
otherwise. Accordingly, purchasers who wish to trade notes on the date of pricing or on or prior to the third business day prior to
the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.

Morgan Stanley or one of our affiliates will pay varying discounts and commissions to dealers, including Morgan Stanley Smith
Barney LLC ("Morgan Stanley Wealth Management") and their financial advisors, of $3.25 per note depending on market
conditions. The agent may distribute the notes through 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.

MS & Co. is an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley, and it and other affiliates of ours expect to
make a profit by selling, structuring and, when applicable, hedging the notes.

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.

Acceleration Amount in Case of an Event of Default

In case an event of default with respect to the notes shall have occurred and be continuing, the amount declared due and payable
per note upon any acceleration of the notes shall be an amount in cash equal to the stated principal amount plus accrued and
unpaid interest.

Validity of the Notes

In the opinion of Davis Polk & Wardwell LLP, as special counsel to MSFL and Morgan Stanley, when the notes offered by this
pricing supplement have been executed and issued by MSFL, authenticated by the trustee pursuant to the MSFL Senior Debt
Indenture (as defined in the accompanying prospectus) and delivered against payment as contemplated herein, such notes will be
valid and binding obligations of MSFL and the related guarantee will be a valid and binding obligation of Morgan Stanley,
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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 (i) the effect of fraudulent
conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above and (ii) any provision of
the MSFL Senior Debt Indenture that purports to avoid the effect of fraudulent conveyance, fraudulent transfer or similar provision
of applicable law by limiting the amount of Morgan Stanley's obligation under the related guarantee. This opinion is given as of the
date hereof and is limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the
Delaware Limited Liability Company Act. In addition, this opinion is subject to customary assumptions about the trustee's
authorization, execution and delivery of the MSFL Senior Debt Indenture and its authentication of the notes and the validity, binding
nature and enforceability of the MSFL Senior Debt Indenture with respect to the trustee, all as stated in the letter of such counsel
dated February 16, 2016, which is Exhibit 5-a to Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 filed
by Morgan Stanley on February 16, 2016.
April 2016
Page 6
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR

Tax Considerations

In the opinion of our counsel, Davis Polk & Wardwell LLP, the notes will be treated as debt for U.S. federal tax purposes. Whether
the notes should be treated as "variable rate debt instruments" or "contingent payment debt instruments," however, will depend,
among other things, upon the facts at the time of issuance of the notes. Although there is uncertainty due to the maximum interest
rates, based on market conditions as of the date hereof, we expect to treat the notes as "variable rate debt instruments," in which
case they will be taxed in the manner described in the section of the accompanying prospectus supplement called "United States
Federal Taxation--Tax Consequences to U.S. Holders--Notes--Floating Rate Notes."

Assuming the treatment of the notes as "variable rate debt instruments" is respected, the notes will be treated as providing for a
single fixed rate followed by a single qualified floating rate ("QFR"), as described in the sections of the accompanying prospectus
supplement called "United States Federal Taxation?Tax Consequences to U.S. Holders?Notes?Floating Rate Notes?General" and
"?Floating Rate Notes that Provide for Multiple Rates." Under applicable Treasury Regulations, in order to determine the amount of
qualified stated interest ("QSI") and original issue discount ("OID") in respect of the notes, an equivalent fixed rate debt instrument
must be constructed. The equivalent fixed rate debt instrument is constructed in the following manner: (i) first, the initial fixed rate
is converted to a QFR that would preserve the fair market value of the notes, and (ii) second, each QFR (including the QFR
determined under (i) above) is converted to a fixed rate substitute (which will generally be the value of that QFR as of the issue
date of the notes). The rules under "United States Federal Taxation?Tax Consequences to U.S. Holders?Notes?Discount Notes?
General" must be applied to the equivalent fixed rate debt instrument to determine the amounts of QSI and OID on the notes.
Under this method, the notes may be issued with OID.

A U.S. holder is required to include any QSI in income in accordance with the U.S. holder's regular method of accounting for U.S.
federal income tax purposes. U.S. holders will be required to include OID in income for U.S. federal income tax purposes as it
accrues, in accordance with a constant yield method based on a compounding of interest. QSI allocable to an accrual period must
be increased (or decreased) by the amount, if any, which the interest actually accrued or paid during an accrual period (including
the fixed rate payments made during the initial period) exceeds (or is less than) the interest assumed to be accrued or paid during
the accrual period under the equivalent fixed rate debt instrument. For the QSI and the amount of OID (if any) on a note, please
contact Morgan Stanley at 212-761-4000.

If, based on market conditions as of the issue date, the notes are not treated as "variable rate debt instruments," they will instead
be treated as "contingent payment debt instruments" for U.S. federal income tax purposes, as described in the section of the
accompanying prospectus supplement called "United States Federal Taxation--Tax Consequences to U.S. Holders--Notes--
Contingent Payment Notes." Under this treatment, U.S. taxable investors generally would be subject to annual income tax based on
the "comparable yield" (as defined in the accompanying prospectus supplement) of the notes, adjusted upward or downward to
reflect the difference, if any, between the actual and the projected amount of any contingent payments on the notes. In addition,
any gain recognized by U.S. taxable investors on the sale or exchange, or at maturity, of the notes generally would be treated as
ordinary income. If the notes are treated as contingent payment debt instruments, the comparable yield and the projected payment
schedule with respect to a note can be obtained by contacting Morgan Stanley at 212-761-4000.

http://www.sec.gov/Archives/edgar/data/895421/000095010316013566/dp65954_424b2-ps897a1.htm[5/25/2016 12:15:32 PM]

If you are a non-U.S. holder, please read the section of the accompanying prospectus supplement called "United States Federal
Taxation--Tax Consequences to Non-U.S. Holders."

Both U.S. and non-U.S. holders should read the section of the accompanying prospectus supplement entitled "United States
Federal Taxation."

Y ou should c onsult your t a x a dvise r re ga rding a ll a spe c t s of t he U .S. fe de ra l t a x c onse que nc e s of a n
inve st m e nt in t he not e s, a s w e ll a s a ny t a x c onse que nc e s a rising unde r t he la w s of a ny st a t e , loc a l or non -
U .S. t a x ing jurisdic t ion.

T he disc ussion in t he pre c e ding pa ra gra phs unde r "T a x Conside ra t ions," a nd t he disc ussion c ont a ine d in
t he se c t ion e nt it le d "U nit e d St a t e s Fe de ra l T a x a t ion" in t he a c c om pa nying prospe c t us supple m e nt , insofa r
a s t he y purport t o de sc ribe provisions of U .S. fe de ra l inc om e t a x la w s or le ga l c onc lusions w it h re spe c t
t he re t o, c onst it ut e t he full opinion of Da vis Polk & Wa rdw e ll LLP re ga rding t he m a t e ria l U .S. fe de ra l t a x
c onse que nc e s of a n inve st m e nt in t he not e s.

April 2016
Page 7
Morgan Stanley Finance LLC
Fixed to Floating Rate Notes due 2026
Ba se d on 3 -M ont h U SD LI BOR
Contact Information

Morgan Stanley Wealth Management clients may contact their local Morgan Stanley branch office or Morgan Stanley's 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

MSFL and Morgan Stanley have filed a registration statement (including a prospectus, as supplemented by a prospectus
supplement) with the Securities and Exchange Commission, or SEC, for the offering to which this pricing supplement relates. You
should read the prospectus in that registration statement, the prospectus supplement and any other documents relating to this
offering that MSFL and Morgan Stanley have filed with the SEC for more complete information about MSFL, 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,
MSFL or Morgan Stanley will arrange to send you the prospectus and the prospectus supplement 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:

Prospe c t us Supple m e nt da t e d Fe brua ry 1 6 , 2 0 1 6
Prospe c t us da t e d Fe brua ry 1 6 , 2 0 1 6

Terms used but not defined in this pricing supplement are defined in the prospectus supplement or in the prospectus.

April 2016
Page 8
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Document Outline

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