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MORGAN STANLEY 8% DAILY R ANGE ACCRUAL

8 Y E A RS (11/2019)

HOW IS THE RETURN CALCULATED?

The Morgan Stanley 8% Daily Range Accrual has a maturity of 8 years. The Note offers investors the opportunity to receive attractive interest payments of up to 8.00% p.a. during scenarios of a flat or a steep yield curve. Interest payments are made for every day on which the 30-year Euro Swap rate was equal or exceeded the 10-year Euro Swap rate. Therefore, interest payments can accrue to 8.00% p.a. Interest payments are made on a quarterly basis. Negative interest payments are not possible.

This is a convenience translation of German marketing documentation. It is intended for the use of the distribution partner only and not for onward distribution to third parties or clients. It may only be read in connection with the corresponding German version, which will prevail the convenience translation.

EVOLUTION OF THE 30-YEAR AND 10-YEAR EURO-SWAP RATES1

5.5 5 4.5 4 INTEREST IN PERCENT 3.5 3 2.5 2 Oct 06 YEAR Oct 07 Oct 08 Oct 09 Oct 10 30-YEAR EURO-SWAP RATE 10-YEAR EURO-SWAP RATE

KEY ADVANTAGES
XX Opportunity to collect interest for each day on which the spread between

the 30-year and 10-year Euro Swap rate is positive

XX Chance to receive 8,00% p.a. interest payments during flat or steep yield curve scenarios XX On 95.8% of the days since the Euro induction the 30-year Euro Swap

rate was equal or higher than the 30-year Euro Swap rate1
XX 100% capital protection at maturity provided by the issuer

KEY RISKS
XX The secondary market price of the notes will depend on many factors,

including, but not limited to, the then-prevailing reference rates. If investors sell before maturity, they may receive less than their initial investment.
XX Morgan Stanley will make a daily secondary market under normal market

conditions. There is no guarantee that this secondary market will be active or liquid. An illiquid market can adversely influence the price at which the Notes can be sold.
XX Investors are exposed to the credit risk of the issuer. Although the notes

HISTORICAL SPREAD BETWEEN THE 30-YEAR AND 10-YEAR EURO SWAP RATES SINCE EURO INDUCTION ON 1.1.19991
1.0 0.8 0.6 0.4 0.2 0 SPREAD BETWEEN THE 30-YEAR AND 10-YEAR EURO-SWAP RATE

are designed to provide the returns described, payments depend on the ability of the issuer to meet its financial obligations. The Note is not protected by the deposit guarantee.

SPREAD IN PERCENT

PRODUCT CATEGORY
Capital Protection Conditional Capital Protection Participation

0.20.40.60.81.0Jan 1999 YEAR Jan 2001 Jan 2003 Jan 2005 Jan 2007 Jan Jan 2009 2011

MATURITY
short-term 1 2 3 4 medium-term 5 6 7 8 long-term 9 10
YEAR

UNDERLYING EXPECTATION
falling flat rising

Commissions, fees and other charges have a diminishing impact on performance. Examples of this are transaction costs such as order fees and brokerage fees, as well as any securities account fees and other custody fees. For an investment amount of 5.000 Euro and an investment period of 5 years, there could be costs of 20 Euro for your securities account and 50 Euro for a transaction.

Source: Bloomberg, 29 September 2011. Past Performance is no guide to future performance.

MORGAN STANLEY 8% DAILY RANGE ACCRUAL

ABOUT MORGAN STANLEY
XXFounded 1935 in New York. XX62,000 employees globally in 1,300 offices in 42 countries. XXTotal Assets of USD 831 billion.2 XXTier 14 capital ratio of approximately 16.8%3 XX#1 in Mergers and Acquisitions (M&A) and #2 in Initial Public Offerings

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8 YEARS (11/2019) Page 2 of 2 | 29 September 2011

PRODUCT DETAILS
Issuer: Morgan Stanley & Co. International plc. (United Kingdom) Issuer Rating: A+ (S&P), A2 (Moodys) Maturity: 8 Years Specified Denomination: EUR 1000 Issue Price: 100% of the Specified Denomination Subscription Surcharge: Up to 2.00% of the Specified Denomination Upfront Fee: Up to 2.00% of the Specified Denomination Rate of Interest: 8% x N/M (p.a.) where: n is the total number of calendar days in the interest period on which the interest spread is larger than 0% p.a. or equal to 0% p.a. and M is the total number of Calendar days in the Interest Period. The rate of interest is capped at 8% p.a. A negative rate of interest is not possible. Interest Spread: 30-year Euro Swap rate - 10-year Euro Swap rate Redemption: 100% of the Specified Denomination Quotation: Percentage (dirty pricing) Subscription Period: 07 October 2011 - 31 October 2011 (1pm CET)5 Trade Date: 31 October 2011 Issue Date / Primary Settlement Date: 04 November 2011 First Listing Date: 04 November 2011 Maturity Date: 04 November 2019 ISIn / Wkn: DE000MS0KDV2 / MS0KDV Listing: Frankfurt Stock Exchange (Scoach), Stuttgart Stock Exchange (EUWAX) Prospectus: Legally binding are the final terms and the base prospectus from 29 September 2011 for the EUR 2.000.000.000 German Structured Securities Programm with any possible amendments Placing Partner: BPM - Berlin Portfolio Management GmbH

(IPOs) worldwide.2
XXLeading in Wealth Management with client assets of USD 1.7 trillion.2

IMPORTANT INFORMATION
Investment decisions should only be made on the basis of the information in the base prospectus and final terms for the product including the risk factors (the Offering Documents), which is the only binding document and the terms of which will supersede the terms herein. Investment decisions should just be made on the basis of the final terms and the base prospectus from 29 September 2011 for the EUR 2.000.000.000 German Structured Securities Program with any possible amendments, which are containing a detailed description of the chances and risks of this product. This information is not an offer or a solicitation to buy or sell the product and has been prepared solely for information purposes. Investors bear the issuer risk. Accordingly, the value of the Notes is dependent not only on the development of the underlying assets but, among others, also on the creditworthiness of the issuer which may vary over the term of the Notes. The product and this marketing communication may only be offered, sold or published in jurisdictions in which such offer, sale or publication is permitted. The product may not be offered, sold or transferred in the United States to, or for the account or benefit of, any U.S. Person (as defined in Regulation S under the Securities Act 1933). This communication is not directed to persons in the UK. No representation or warranty is given with respect to the accuracy or completeness of the information herein. Morgan Stanley does not give investment, tax, or other advice; prospective investors should consult their own professional advisors. Investors are exposed to the credit risk of the issuer. Accordingly, the value of investment product is dependent not only on the development of the underlying assets but, among others, also the creditworthiness of the issuer which may vary over the term of the investment product. A simplified prospectus and the final terms can be obtained free of charge from Morgan Stanley Bank AG, Junghofstrae 1315, 60311 Frankfurt am Main, Germany, and on the website www.MorganStanleyIQ.de. The issue price contains an upfront fee of 2.00% of the specified denomination, which gets paid once. Additionally, the agent or the house bank can charge a surcharge of up to 2.00% of the specified denomination from the investor, which is determined by the house bank respectively the agent. Please contact your agent or house bank for detailed information on this. 2011 Morgan Stanley. All rights reserved.

CONTACT
MORGAN STANLEY BANK AG JUNGHOFSTRASSE 1315 60311 FRANKFURT AM MAIN TEL.: +49 (0)69 2166 4400 FAX: +49 (0)69 2166 4499 E-MAIL: INFO@MORGANSTANLEYIQ.DE WWW.MORGAnSTAnLEYIQ.DE

2 4

Source: Morgan Stanley, Earnings Release 2 / 2011. 3 21 July 2011. under Basel I. 5 the Issuer has the right to terminate the subscription period at any point.