Morgan Stanley - Central Bank of Ireland · PDF filecase oflndex Warrants and Share Warrants, Underlying Currency) of the Shares converted ... Dealers other than or in addition to

The Final Terms relating to each issue of Unitary Warrants will contain (without limitation) such of the following information as is applicable in respect of such Unitary Warrants. All references to numbered conditions are to the terms and conditions of the Unitary Warrants set out in Schedule 3 of the Agency Agreement (as defined in the Unitary Warrant Conditions) and reproduced in the Base Prospectus and words and expressions defined in those terms and conditions shall have the same meaning in the applicable Unitary Warrant Final Terms.

MORGAN STANLEY ASIA PRODUCTS LIMITED (incorporated with limited liability in the Cayman Islands)

Guaranteed by

Morgan Stanley (incorporated in Delaware, U.S.A.)

Warrant Programme

The Warrants and the Guarantee have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act), or the securities laws of any state in the United States. The Issuer may offer, sell or deliver Warrants only (a) to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) reasonably believed by the Issuer to be qualified institutional buyers (each a QIB) as defined in Rule 144A under the Securities Act (Rule 144A) that are also "qualified purchasers" (QPs) within the meaning of Section 3(c)(7) (Section 3(c)(7)) and as defined in Section 2(a)(51)(A) of the United States Investment Company Act of 1940, as amended (the 1940 Act) or (b) outside the United States to, or for the account or benefit of, a purchaser that is not a U.S. person in an offshore transaction in compliance with Regulation S under the Securities Act. Each purchaser of Warrants being offered to, or for the account or benefit of a U.S. person is hereby notified that the offer and sale of such Warrants is being made in reliance upon an exemption from the registration requirements of the Securities Act. The Warrants are eligible for purchase by Plans (as defined herein) subject to certain conditions. See "ERISA Considerations for Unitary Warrants" herein.

1,000,000 American Style Unitary Cash Settled Call Warrants due 13 May 2019 linked to local ordinary shares ofHangzhou Robam Appliances Company Limited (China Connect)

This document constitutes the Final Terms relating to the issue of Unitary Warrants described herein. This document constitutes final terms for the purposes of Article 5.4 of Directive 2003/71/EC, as amended (the Prospectus Directive).

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 22 September 2016 approved by the Central Bank of Ireland on 22 September 2016 (as supplemented from time to time, the Base Prospectus). These Final Terms contain the final terms of the Unitary Warrants and must be read in conjunction with such Base Prospectus in order to obtain full information on the Issuer and the Unitary Warrants themselves. Copies of such Base Prospectus are available free of charge to the public during normal business hours at the registered office of the Issuer and from the specified office of the Irish Agent or may be downloaded free of charge from http://www.ise.ie/Market-Data-Announcements/Debtllndividual-DebtInstrument-Data/Dept-Security-Documents/?progiD=121&FIELDSORT=docld.

Save as disclosed in "Offering and Sale", so far as the Issuer is aware, no person involved in the offer of the Unitary Warrants has an interest material to the offer.

All purchasers of the Warrants must provide certain representations to the Dealer in the form of the Master Purchaser Certificate set out as the Appendix attached to the Unitary Warrant Conditions set out in the Base Prospectus.

References herein to numbered Conditions are to the Terms and Conditions of the Unitary Warrants and words and expressions defmed in such terms and conditions shall bear the same meaning in these Final Terms, save as where otherwise expressly provided.

Part A- Information about the Warrants

l.(a) The series number of the Warrants; I2543

l.(b) Whether or not the Warrants are to be consolidated and No. form a single series with the warrants of an existing series;

2. Whether the Warrants are Share Warrants or Index Share Warrants relating to the local ordinary Warrants or a Basket; shares of Hangzhou Rob am Appliances

Company Limited (China Connect) (the Share Company) with the Bloomberg Code 002508 C2 (the Shares)

3. Launch Date; 12 May 2017

4. The Issue Date of the Warrants; 17 May 2017

5. Whether the Warrants are American Style Warrants or American Style Warrants European Style Warrants;

6. Whether the Warrants are Call Warrants or Put Call Warrants Warrants;

7. Whether the Warrants are Global Warrants or Definitive Global Warrants exchangeable into Definitive Warrants; Warrants Ill registered form in limited

circumstances as set out in the Conditions

8.(a) If the Warrants are Share Warrants, whether the Market Access Warrants Warrants are Outperformance Warrants or Market Access Warrants;

8.(b) If the Warrants are Outperformance Warrants, whether Not applicable Upfront Discount is applicable, and if so, Up front Discount (as a percentage);

8.(c) If the Warrants are Outperformance Warrants, whether Not applicable Daily Accrual is applicable, and if so, the Daily Accrual Rate (as a percentage) (except where Rerate is also applicable, in which case, please see paragraph 8.(d)(i));

8.(d) If the Warrants are Outperformance Warrants, and Not applicable Upfront Discount or Daily Accrual is applicable, the Commission Rate (as a percentage);

8.(d)(i) If the Warrants are Outperformance Warrants, whether Not applicable Daily Accrual and Rerate are applicable, and if so, the Daily Accrual Rate (as a percentage) in respect of the First Period;

8.( d)(ii) If the Warrants are Outperformance Warrants, Daily Not applicable Accrual and Rerate are applicable, the Rerate Date;

8.( d)( iii) If Rerate is applicable, Default Adjusted Rate (as a Not applicable percentage);

8.(e) If the Warrants are Outperformance Warrants, whether Not applicable Variable Daily Accrual is applicable, and if so, the Variable Daily Accrual Rate (as a percentage);

9. The number of Warrants being issued; 1,000,000.

10.(a) The Issue Price per Warrant (which may be subject to United States Dollars (USD) 6.0717, being the adjustment in accordance with Condition 17 or 18 in the Issuer's weighted average execution price (in the case oflndex Warrants and Share Warrants, Underlying Currency) of the Shares converted respectively); into the Settlement Currency at the Exchange

Rate.

10.(b) Currency in which Warrants are to be denominated and USD traded;

11. The Strike Price per Warrant (which may be subject to USD0.00001 adjustment in accordance with Condition 17 or 18 in the case oflndex Warrants and Share Warrants, respectively);

12. The Relevant Jurisdiction of the Warrants; The People's Republic of China

13.(a) If Warrantholder Break Fee is applicable, and if so, the Not applicable Warrantholder Break Fee Rate and if the Warrantholder Break Fee Rate is Flat or Amortised;

13.(b) IfWarrantholder Break Fee Rate is Amortised and Day Not applicable Count Fraction is applicable, the start date and end date over which Day Count Fraction applies;

14. The Settlement Price per Warrant (which may be As defined in Condition 19 subject to adjustment in accordance with Condition 17 or 18 in the case of Index Warrants and Share Warrants, respectively); (NB: This must be expressed as a monetary amount in respect oflndex Warrants);

15. The Interim Payment Amount or the Basket Dividend As defined in Condition 19 Payment Amount (in the case of Basket Warrants);

16. The Applicable Cash Dividend Amount; As defined in Condition 19

17.(a) If the Warrants are Index Warrants, whether Not applicable Commissions applies and if so, the Commissions (as a percentage);

17.(b) If the Warrants are Index Warrants, whether Not applicable Outperformance is applicable, and if so, if Outperformance Average, Outperformance Initial or Outperformance Final is applicable and the Outperformance Rate (as a percentage);

18.(a) The Cash Settlement Amount per Warrant; As specified in Condition 3(b)

18.(b) Whether a Management Fee is applicable, and if so the Not applicable Management Fee Rate (as a percentage);

19.(a) The Settlement Date; As defined in Condition 19

19.(b) The Basket Dividend Payment Date; As defined in Condition 19

20.(a) If the Warrants are Index Warrants, the Index Initial; Not applicable

20.{b) If the Warrants are Index Warrants, the Index Final; Not applicable

20.(c) If the Warrants are Index Warrants, the Index Average; Not applicable

21. In the case of European Style Warrants, the Exercise Not applicable Date for the Warrants;

22. In the case of American Style Warrants, the Exercise From the fourth Business Day following the date Period in respect of the Warrants; of purchase of the Warrants up to and including

10:00 a.m. Brussels or Luxembourg time as appropriate, depending upon whether the Warrants are held through Euroclear or Clearstream, Luxembourg on the Expiration Date.

23. In the case of American Style Warrants, the Expiration 13 May2019 Date for the Warrants;

24. In the case of American Style Warrants, whether Yes Automatic Exercise will apply;

25. The Share Amount which shall be applied to ascertain One Share per Warrant the Cash Settlement Amount (as defined in Condition 19) for each Warrant (such Share Amount shall be subject to adjustment in accordance with Condition 18);

26. The applicable Business Day Centre(s) for the purposes London, New York and Shenzhen of the definition of Business Day in Condition 19;

27. The Spot Exchange Rate for conversion of any amount As defined in Condition 19 into the relevant Settlement Currency for the purposes of determining the Cash Settlement Amount;

28. The Settlement Currency for the payment of the Cash USD Settlement Amount;

29. The Local Currency in respect of the Shares or the Renminbi (RMB) currency equivalent thereof (if different);

30. Qualified Investor; As defined in Condition 19

3l.(a) In the case of American Style Warrants, the Minimum One Warrant Exercise Number;

3l.(b) In the case of American Style Warrants, the Maximum 1,000,000. Exercise Number;

32.(a) The Minimum Purchase Amount of the Warrants; 41,175 Warrants

32.(b) The Minimum Trading Amount of Warrants; One Warrant

33.(a) For the purposes of Condition 17 {Additional Terms for Not applicable Index Warrants), details of the Exchange and Related Exchange (if any);

33.(b) For the purposes of Condition 17 {Additional Terms for Not applicable Index Warrants), details of the relevant Sponsor;

34. For the purposes of Condition 18 (Additional Terms for Exchange(s): Shenzhen Stock Exchange (China Share Warrants) details of the Exchange and Related Connect) Exchange (if any);

Related Exchange(s): All Exchanges

35. Whether Payment Disruption Event is applicable; Yes

36. Details of any certifications required in the Exercise Certification relating to China as indicated in the Notice; form of Exercise Notice Ill the Agency

Agreement.

37.(a) Whether the Warrants are Additional Warrants; No

37.(b) If the Warrants are Additional Warrants, whether they Not applicable are Fungible Additional Warrants or Non-Fungible Additional Warrants;

37.(c) Ifthe Warrants are Non-Fungible Additional Warrants, Not applicable the Original Series;

38. The method of distribution of the Warrants (syndicated Private placement or non-syndicated) including, if any, the names of any

Non-syndicated Dealers other than or in addition to Morgan Stanley & Co. International pic (Additional Dealers);

39. Potential Section 871(m) transaction under the U.S. The Issuer believes the Warrants should not be Internal Revenue Code (Code). subject to withholding under Section 871(m) of

the Code.

Responsibility Statement:

The Issuer accepts responsibility for the information contained in these Final Terms. The Guarantor accepts responsibility for the information contained in these Final Terms in relation to itself and the Guarantee. To the best of the knowledge and belief of the Issuer (who has taken all reasonable care to ensure that such is the case), the information contained in the Base Prospectus, as completed by these Final Terms in relation to the Warrants, is in accordance with the facts and does not omit anything likely to affect the import of such information. To the best of the knowledge and belief of the Guarantor (who has taken all reasonable care to ensure that such is the case), the information contained in the Base Prospectus, in relation to itself and the Guarantee, as completed by these Final Terms in relation to the Warrants, is in accordance with the facts and does not omit anything likely to affect the import of such information.

The information included in these Final Terms with regard to the underlying shares (the Information) consists of extracts from or summaries of information in respect of the underlying assets that is publicly available from Bloomberg Financial Markets Information Service and is not necessarily the latest information available. The Issuer only confirms that the Information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by the issuer, owner or sponsor, as the case may be, of such underlying assets, no facts have been omitted that would render the reproduced extracts or summaries inaccurate or misleading. The Issuer makes no representation that the Information, any other publicly available information or any other publicly available documents regarding the underlying assets to which the Warrants relate are accurate or complete. There can be no assurance that all events occurring prior to the date of these Final Terms that would affect the trading price of the underlying assets to which the Warrants relate (and therefore the trading price and value of the Warrants) have been publicly disclosed. Subsequent disclosure of any such events or the disclosure or failure to disclose material future events concerning the underlying assets to which the Warrants relate could affect the trading price and value of the Warrants.

The Central Bank of Ireland has approved the Base Prospectus dated 22 September 2016 under Part 7 of the Prospectus (Directive 2003171/EC) Regulations 2005 as amended (the Regulation) as having been drawn up in accordance with the Regulation and Commission Regulation (EC) No 809/2004 and has further approved the Base Prospectus Supplement dated 18 November 2016 and the Base Prospectus Supplement dated 19 January 2017.

The Issuer does not intend to provide any post-issuance information in relation to any assets and/or underlying in relation to any issue of Warrants constituting derivative securities (as such term is used in the Commission Regulation (EC) No. 809/2004).

Signed on behalf of the Issuer:

PART B - Other Information

1 Listing and admission to trading

(i) Listing: Ireland

(i) Admission to trading: The issue of Warrants is conditional upon the Irish Stock Exchange granting listing of the Warrants. Listing of the Warrants on the Irish Stock Exchange is expected to occur on 1 7 May 20 17.

2 Rating

Ratings: The Unitary Warrants to be issued have not been rated.

3 Notification

The Central Bank has provided the competent authority(ies) of Ireland with a certificate of approval attesting that the Base Prospectus dated 22 September 2016, has been drawn up in accordance with the provisions of the Prospectus Directive and Commission Regulation (EC) No 809/2004 and has further approved the Base Prospectus Supplement dated 18 November 2016 and the Base Prospectus Supplement dated 19 January 2017.

4 Interests of natural and legal persons involved in the issue

Save for any fees payable to the Dealers, so far as the Issuer is aware, no person involved in the issue of the Warrants has an interest material to the offer.

5 Reasons for the offer, estimated net proceeds and use of proceeds

(i) Reasons for the offer and use of proceeds: See "Use of Proceeds" in the Base Prospectus

(ii) Estimated net proceeds: Not applicable

(iii) Estimated total expenses: Not applicable

6 Details relating to the Underlying Asset(s)

(i) Underlying Asset(s): The Shares

(ii) Issuer of Underlying Asset: Hangzhou Robam Appliances Company Limited

(iii) !SIN/Security information code relating to the 002508 C2 (China Connect) Underlying Asset(s):

(iv) Description of Underlying Asset(s): Not applicable

(v) Details of where information about the past Bloomberg Financial Markets Information Services and the further performance on the Underlying Asset(s) and its volatility can be obtained:

7 Operational information

(i) ISIN Code: US61766D4464

(ii) Common Code: 161690317

(iii) Any clearing system(s) other than Euroclear Not applicable Bank S.A./N.V. and Clearstream Banking S.A. and the relevant identification number(s):

8 Additional Disclosure relating to the Share

(i) Jurisdiction of incorporation: The People's Republic of China

(ii) Closing price as at the Launch Date: The closing price of Hangzhou Robam Appliances Company Limited as at the Launch Date was RMB 41.93.

(iii) Registered office: The registered office of Hangzhou Robam Appliances Company Limited is at No. 592, Linping Avenue, Yuhang Economic Development Zone, Hangzhou 311100, China.

(iv) Brief description of business of Share Hangzhou Rob am Appliances Company Limited Company: develops, manufactures and sells household electrical

kitchen appliances. Hangzhou Rob am Appliances Company Limited's major products include range hoods, gas stoves, disinfection cabinets, electric pressure cookers, induction cookers, electric kettles and food processing machines.

(v) Market capitalisation: The market capitalisation of Hangzhou Rob am Appliances Company Limited as at the Launch Date was RMB 39,792,947,200.

(vi) Historical price information for the previous 3 The table below shows the range of prices for the years: Shares of Hangzhou Robam Appliances Company

Limited as quoted on Shenzhen Stock Exchange for the periods specified.

Relevant Period High Price Low Price (RMB) (RMB)

2014 First Quarter 11.564 8.793 Second Quarter 10.989 8.996 Third Quarter 11.053 8.721 Fourth Quarter 12.578 10.274



2017 2017, January 30.231 28.138 2017, February 33.923 29.846 2017,March 38.462 32.169 2017,Apri1 45.60 37.323 2017, May (up to and 43.215 39.615 including the Launch Date)

(vii) Historical dividend information for the Relevant Payable Date Gross 'Ijlpe

previous 3 years: Ex-Date Amount (RMB)

16May 16 May2014 0.136752 Regular 2014 Cash

16May 16May2014 25% Bonus 2014

14May 14May2015 0.17094 Regular 2015 Cash

14May 14May2015 50% Bonus 2015

02 June 02 June 2016 0.307692 Regular 2016 Cash

02 June 02 June 2016 50% Bonus 2016

lOMay 10May2017 0.384615 Regular 2017 Cash

lOMay 10 May 2017 30% Bonus 2017

(viii) Historical Exchange Rate information for the RMBIUSD High Low Period

previous 3 years: Exchanf(e Rate End 2014 6.0406 6.2598 6.2055 2015 6.1883 6.4937 6.4937 2016 6.4536 6.9615 6.9450

2017 (up to the 6.8450 6.9640 6.8995 Launch Date)

9 Authorisation

The Issuer has obtained all necessary consents, approvals and authorisations in the Cayman Islands in connection with the establishment and the updates of the Programme and the issue of the Warrants. The establishment of the Programme and the issue of the Warrants pursuant to this Base Prospectus dated 22 September 2016 was authorised by resolutions of the board of directors of the Issuer passed on 21 September 2016.

The Guarantor has obtained all necessary consents, approvals, and authorisations in connection with the execution, delivery and performance of the Guarantee.

10 Summary

(i) Issue specific summary:

I The summary for this series of Warrants is annexed to these Final Terms.

SUMMARY

This section comprises a summary in the format, and with the content, required by Article 5(2) of the Prospectus Directive.

Summaries are made up of disclosure requirements known as elements (Elements). These Elements are set out in Sections A toE below (and numbered AI to E.7). This summary contains all the Elements required for a summary for the type of securities offered under this Base Prospectus and the type of issuer. Because some Elements are not required, there are gaps in the numbering sequence of the Elements. Even though an Element may need to be inserted in the summary because of the type of securities and the type of issuer, it is possible that no relevant information can be given regarding the Element, in which case the Element shall be described as "not applicable".

Section A- Introduction and warnings

A.l This summary must be read as an introduction to this Base Prospectus. Any decision to invest in the Warrants should be based on a consideration of the Base Prospectus as a whole, including any documents incorporated by reference. Where a claim relating to the information contained in this Base Prospectus is brought before a court, the plaintiff investor might, under the national legislation of Member States, be required to bear the costs of translating the Base Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus or it does not provide, when read together with the other parts of the Base Prospectus, key information in order to aid investors when considering whether to invest in the Warrants.

A.2 Consent by the Issuer will be required for the use of this Base Prospectus in relation to any subsequent resale or final placement of the Warrants by any financial intermediary.

Any consent (if given) by the Issuer shall indicate: (a) the offer period within which any subsequent resale or final placement of the Warrants by such financial intermediary can be made and for which consent to the use of the Base Prospectus is given; and (b) any other conditions which are relevant for the use of the Base Prospectus.

Information on the terms and conditions of the offer of the Warrants by the Issuer is to be provided at the time of the offer by the Issuer.

Section B -Issuer and Guarantor

Issuer

B.l The legal and Morgan Stanley Asia Products Limited. commercial name of the Issuer

B.2 The domicile and The Issuer is an exempted company incorporated with limited liability in the Cayman Islands legal form of the pursuant to the Companies Law (2004 Revision) of the Cayman Islands (as amended from time to Issuer, the time). legislation under

The Issuer is domiciled in the Cayman Islands. which the Issuer operates and its country of incorporation

B.4b A description of The business of the Guarantor (the ultimate holding company of the Issuer) in the past has been, any known trends and in the future may continue to be, materially affected by many factors, including: the effect of affecting the economic and political conditions and geopolitical events; sovereign risk; the effect of market Issuer and the conditions, particularly in the global equity, fixed income, currency, credit and commodities industries in markets, including corporate and mortgage (commercial and residential) lending and commercial which it operates real estate markets and energy markets; the impact of current, pending and future legislation

(including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act)), regulation (including capital, leverage, funding and liquidity requirements), policies (including fiscal and monetary), and legal and regulatory actions in the United States of America (U.S.) and worldwide; the level and volatility of equity, fixed income and commodity prices

(including oil prices), interest rates, currency values and other market indices; the availability and cost of both credit and capital as well as the credit ratings assigned to the Guarantor's unsecured short-term and long-term debt; investor, consumer and business sentiment and confidence in the financial markets; the performance and results of the Guarantor's acquisitions, divestitures, joint ventures, strategic alliances or other strategic arrangements; the Guarantor's reputation and the general perception of the financial services industry; inflation, natural disasters, pandemics and acts of war or terrorism; the actions and initiatives of current and potential competitors as well as governments, regulators and self-regulatory organizations; the effectiveness of the Guarantor's risk management policies; technological changes instituted by the Guarantor, its competitors or counterparties and technological risks, including cybersecurity, business continuity and related operational risks); the Guarantor's ability to provide innovative products and services and execute its strategic objectives; or a combination of these or other factors. In addition, legislative, legal and regulatory developments related to the Guarantor's businesses are likely to increase costs, thereby affecting results of operations.

B.S Description of the The Issuer has no subsidiaries. It is wholly owned by Morgan Stanley Asia Securities Products Group and the LLC, which is itself a subsidiary of the Guarantor. The Guarantor, a financial holding company, is Issuer's position a global financial services firm that maintains significant market positions in each of its business within the Group segments - Institutional Securities, Wealth Management and Investment Management. The

Guarantor, through its subsidiaries and affiliates (together with the Guarantor, the Group), provides a wide variety of products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals.

B.9 Profit forecast or Not Applicable; the Issuer has chosen not to include a profit forecast or estimate. estimate

B.lO Qualifications in Not Applicable; the auditors' report contains no such qualifications in respect of the audited the auditors' reports and financial statements of the Issuer for the years ended 31 December 2015 and 2014. report on the Issuer's historical financial information

B.12 Selected financial The selected financial information set out below has been extracted without material adjustment from information the interim report for the half year ended 30 June 2016 and the audited reports and financial statements relating to the of the Issuer for the year ended 31 December 2015.

Issuer Balance Sheet (in U.S.$ '000) 31 Dec2014 31 Dec 2015 30June 2016

Total assets 10,987,562 6,524,965 3,477,699

Total liabilities and equity 10,987,562 6,524,965 3,477,699

Condensed statement of Six months comprehensive income 31 Dec 31 Dec ended 30 June (in U.S.$ '000) 2014 2015 2015 2016

Net gains/ (losses) on financial (5,004) 871 (5,689) 418 instruments classified as held for trading Net gains/ (losses) on financial 5,004 (871) 5,689 (418) instruments designated at fair value through profit or loss Income (net of tax) - - - -

There has been no significant change in the financial or trading position of the Issuer since 30 June 2016, the date of the latest published interim unaudited financial statements of the Issuer and no material adverse change in the prospects of the Issuer since 31 December 2015, the date of the

latest published annual audited financial statements of the Issuer.

B.13 Recent material Not Applicable. The Issuer considers that no event particular to itself and which is to a material events particular extent relevant to the evaluation of its solvency has taken place since the publication of its last to the Issuer annual financial statements.

B.14 Extent to which See Element B.5 for information about the Issuer's position in the Group. the Issuer is The Warrants issued by the Issuer are guaranteed by the Guarantor. The Arranger and Dealer, dependent on other entities

which is also an affiliate of the Issuer, arranges and distributes the Warrants that are issued by the

within the Group Issuer. The Issuer is also reliant on the Guarantor or other members of the Group for the purposes of entering into hedging transactions to hedge exposures under the Warrants it issues.

B.lS Principal activities The Issuer's business consists of the issuance of financial instruments, with a primary focus on of the Issuer the Asia markets, and the hedging of obligations relating thereto.

B.16 Extent to which The Issuer is wholly owned by Morgan Stanley Asia Securities Products LLC. It is indirectly the Issuer is owned or controlled by the Guarantor through a number of subsidiaries. directly or indirectly owned or controlled

B.18 Description and The Guarantor will absolutely, unconditionally and irrevocably guarantee the Issuer's payment scope of the obligations under each series of Warrants pursuant to a guarantee dated 22 September 2016 (the Guarantee Guarantee).

B.19 SectionB The following items B.1 to B.16 shall relate to the Guarantor as if it were the Issuer: information about the Guarantor

Guarantor

B.l The legal and Morgan Stanley. commercial name of the Guarantor

B.2 The domicile and The Guarantor was incorporated under the laws of the State of Delaware. As a financial holding legal form of the company, it is regulated by the Board of Governors of the Federal Reserve System (the Federal Guarantor, the Reserve) under the Bank Holding Company Act of 1956, as amended (the BHC Act). As a major legislation under financial services firm that operates through its subsidiaries and affiliates, the Guarantor is subject which the to extensive regulation by U.S. federal and state regulatory agencies and securities exchanges and Guarantor by regulators and exchanges in each of the major markets where it conducts its business. The operates and its Guarantor has its registered office at The Corporation Trust Center, 1209 Orange Street, country of Wilmington, Delaware 19801, U.S.A, and its principal executive office at 1585 Broadway, New incorporation York, New York 10036, U.S.A.

The Guarantor conducts its business from its headquarters in and around New York City, its regional offices and branches throughout the United States and its principal offices in London, Tokyo, Hong Kong and other world financial centres.

B.4b A description of See B.4b in relation to the Issuer above. any known trends affecting the Guarantor and the industries in which it operates

B.S Description of the The Guarantor, a financial holding company, is a global financial services firm that maintains Group and the significant market positions in each of its business segments - Institutional Securities, Wealth Guarantor's Management and Investment Management. The Guarantor, through its subsidiaries and affiliates,

. position within the provides a wide variety of products and services to a large and diversified group of clients and

Group customers, including corporations, governments, financial institutions and individuals.

The Guarantor is the parent and financial holding company of the companies in the Group.

B.9 Profit forecast or Not Applicable; the Guarantor has chosen not to include a profit forecast or estimate. estimate

B.lO Qualifications in Not Applicable. The auditors' report contains no such qualifications in respect of the audited the auditors' reports and financial statements of the Guarantor for the years ended 31 December 2015 and report on the 2014. Issuer's historical financial information

B.12 Selected financial The selected financial information set out below has been extracted without material adjustment information from interim report for the half year ended 30 June 2016 and the audited reports and financial relating to the statements of the Guarantor for the year ended 31 December 2015. Guarantor

Consolidated Balance Sheet At 31 Dec 2014 At 31 Dec 2015 At 30 June 2016 (U.S.$ in millions) Total assets 801,510 787,465 828,873

Total liabilities and equity 801,510 787,465 828,873

Consolidated Income Six months Statement 2014 2015 ended 30 June (U.S.$ in millions) 2015 2016

Net revenues 34,275 35,155 19,650 16,701

Income from continuing 3,591 8,495 5,582 4,221 operations before income taxes Net income 3,667 6,279 4,294 2,803

There has been no material adverse change in the prospects of the Guarantor since 31 December 2015, the date of the latest published annual audited financial statements of the Guarantor, nor any significant change in the financial or trading position of the Guarantor since 30 June 2016, the date of the latest published interim unaudited financial statements of the Guarantor.

B.13 Recent material Not Applicable. The Guarantor considers that no event particular to itself and which is to a events particular material extent relevant to the evaluation of its solvency has taken place since the publication of to the Guarantor its last annual financial statements.

B.14 Extent to which The Guarantor is a holding company for a number of subsidiary companies (directly or indirectly) the Guarantor is and is dependent on their performance. dependent on other entities within the Group

B.15 Principal activities The Guarantor, a financial holding company, is a global financial services firm that maintains of the Guarantor significant market positions in each of its business segments - Institutional Securities, Wealth

Management and Investment Management. A summary of the activities of each of the Guarantor's business segments is as follows:

. Institutional Securities provides investment banking, sales and trading and other services to corporations, governments, financial institutions, and high-to-ultra high net worth clients. Investment banking services comprise capital raising and financial advisory services, including services relating to the underwriting of debt, equity and other securities as well as advice on mergers and acquisitions, restructurings, real estate and project finance. Sales and trading services include sales, financing and market-making activities in equity securities and fixed income products, including foreign exchange and commodities, as well as prime

B.16 Extent to which the Guarantor is directly or indirectly owned or controlled

Section C - Securities

C.l

C.2

c.s

Type and class of Warrants

Currencies

A description of any restrictions on the free transferability of the Warrants

brokerage services. Other services include corporate lending activities and credit products, investments and research.

• Wealth Management provides a comprehensive array of financial services and solutions to individual investors and small-to-medium sized businesses and institutions covering brokerage and investment advisory services, market-making activities in fixed income securities, financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services.

• Investment Management provides a broad range of investment strategies and products that span geographies, asset classes, and public and private markets, to a diverse group of clients across institutional and intermediary channels. Strategies and products comprise equity, fixed income, liquidity and alternative I other products. Institutional clients include defined benefit/defined contribution pensions, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors and corporations. Individual clients are serviced through intermediaries, including affiliated and non-affiliated distributors.

The Guarantor is a publicly traded company with a principal listing of its ordinary shares on the New York Stock Exchange.

As of 21 March 2016, the following entities beneficially own more than 5% of the Guarantor's common stock: Mitsubishi UFJ Financial Group, Inc. (22.4% holding); State Street (7.1% holding); T. Rowe Price Associates, Inc. (6.7% holding); BlackRock, Inc (5.3% holding). The percentage holdings are based on the number of common shares as of 21 March 2016.

The Warrants are Unitary Warrants which are also Share Warrants.

The Warrants will be issued in registered form and will be represented on issue by a Global Warrant which is exchangeable for Definitive Warrants in the limited circumstances specified in the Global Warrant. The Global Warrant will be deposited with a depositary common to Euroclear Bank S.A./N.A. (Euroclear) and Clearstream Banking, societe anonyme (Clearstream, Luxembourg) with interests in such Global Warrant being traded in the relevant clearing system(s).

ISIN: US61766D4464

Common Code: 161690317

Subject to compliance with all relevant laws, regulations and directives, Warrants under the Programme may be denominated in any currency or units of exchange and settled in any deliverable currency.

The Issue Price of the Warrants is denominated in USD and will be settled in USD.

The free transfer of the Warrants is subject to the selling restrictions of the United States, the European Economic Area (including Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Lichtenstein, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom), Australia, the People's Republic of China (PRC), the Cayman Islands, the Hong Kong Special Administrative Region of the People's Republic of China (Ho11g Ko11g), Kingdom of Bahrain, Indonesia, Japan, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Thailand, the Republic of Korea (South Korea), the Republic of China (Taiwa11), the United Arab Emirates and Vietnam.

Unitary Warrants shall comply with the selling restrictions applicable to them as set out in the section "Offering and Sale".

The "Additional Selling Restrictions" in respect of Unitary Warrants for which Alternative Provisions are not applicable shall apply, for which the Relevant Jurisdiction is not India.

Warrants held in a clearing system must be transferred in accordance with the rules, procedures and regulations of that clearing system.

C.8 Description of the The Warrants are Unitary Warrants which are also American Style Warrants and Call Warrants to rights attaching to which Automatic Exercise applies. the Warrants

Status: The Warrants constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and rank pari passu without preference amongst themselves and, subject to any applicable statutory provisions or judicial order, at least equally with all other present and future direct, unconditional, unsecured and unsubordinated obligations of the Issuer.

Guarantee: The Warrants have the benefit of an absolute, unconditional and irrevocable guarantee of payments of obligations of the Issuer by the Guarantor.

The Warrants relate to the local ordinary shares of Hangzhou Robam Appliances Company Limited with the Bloomberg Code 002508 C2 (the Shares).

See C.18 for rights relating to Cash Settlement Amounts payable in respect of the Warrants.

C.ll Listing and Application is expected to be made by the Issuer (or on its behalf) for the Warrants to be admitted admission to to trading on the Irish Stock Exchange's regulated market with effect from 17 May 2017. trading/ indication of market where securities will be traded

C.15 Effect of value of The Cash Settlement Amount to which the holder of each Warrant is entitled is as set out in C.18. underlying Depending on the value of the underlying Share on the Exercise Date, Actual Exercise Date or instrument(s) on Expiration Date, as the case may be, the Cash Settlement Amount may be a positive amount or it value of derivative may be zero (although it may not be lower than zero). The value of the Cash Settlement Amount securities is dependent on the performance of the underlying Share; if the Cash Settlement Amount is zero,

it represents a total loss of the amount paid for the Warrant.

C.16 Expiration! The Warrants expire on 13 May 2019. maturity date of derivative securities

C.17 Settlement The Warrants shall be cash-settled through Clearstream, Luxembourg and/or Euroclear. procedure for derivative securities

C.18 Description of The returns on the Warrants shall depend on the performance of the Share. return on

The Cash Settlement Amount payable in respect of each Warrant is determined as follows: derivative securities Max (0, China Settlement Price- Strike Price)- Max (0, (China Settlement Price- Issue Price) x

Tax Rate)

Unless otherwise specified, capitalised terms shall have the following meanings:

Issue Price shall have the meaning specified in the applicable Final Terms; and

Strike Price shall have the meaning specified in the applicable Final Terms; and

Tax Event means the enactment, promulgation, execution, ratification, or adoption (including clarification, confirmation and explanation) by the Government of the People's Republic of China or any relevant government authority of a capital gains tax applicable to the Issuer's holding, possession, purchase or sale of the Shares. The Calculation Agent will determine the applicability of such capital gains tax in its sole discretion; and

Tax Rate means, unless specified otherwise in the Final Terms, (i) the effective capital gains tax as determined by the Calculation Agent in its sole discretion after a Tax Event, or (ii) if no such Tax Event is determined to be effective by the Calculation Agent prior to the Exercise Date or the

Expiration Date, as applicable, a rate equal to 10% of the gains in respect of the Shares, as the case may be, in Renminbi and converted into the Settlement Currency, in each case, as determined by the Calculation Agent in its sole discretion;

For the purposes of this Element C. 18, China Settlement Price shall have the meaning to it in Element C. 19 below.

C.19 Description of The China Settlement Price of each Warrant shall be exercise price or

the product of(A) the average of the VWAPs of one Share, expressed in the Settlement Currency, final reference price of

on each of the five Exchange Business Days prior to and including the Exercise Date or

underlying asset Expiration Date; and (B) the Share Amount applicable on the Exercise Date or Expiration Date;

in relation to Unless otherwise specified, capitalised terms shall have the following meanings: derivative

VWAP means the volume weighted average price as published by Bloomberg Financial Markets securities Information Service, as determined by the Calculation Agent, after the market close on the relevant date.

C.20 Description of The Shares have been issued by Hangzhou Robam Appliances Company Limited and information underlying asset relating to it can be found at Bloomberg Financial Markets Information Services. and where information on underlying asset can be found

C.21 Listing and Application is expected to be made by the Issuer (or on its behalf) for the Warrants to be admitted admission to to trading on the Irish Stock Exchange's regulated market with effect from 17 May 2017. trading/ indication of market where securities will be traded

Section D - Risks

D.2 Key risks The following key risks affect the Guarantor and, indirectly, the Issuer: regarding the

Market Risk: The Guarantor's results of operations may be materially affected by market Issuer and the Guarantor

fluctuations and by global and economic conditions and other factors. Holding large and concentrated positions may expose the Guarantor to losses. These factors may result in losses for a position or portfolio owned by the Guarantor.

Credit Risk: The Guarantor is exposed to the risk that third parties that are indebted to it will not perform their obligations, as well as that a default by a large financial institution could adversely affect financial markets. Such factors give rise to the risk of loss arising when a borrower, counterparty or issuer does not meet its financial obligations to the Guarantor.

Operational Risk: The Guarantor is subject to the risk of loss, or of damage to its reputation, resulting from inadequate or failed processes, people and systems or from external events (e.g. fraud, theft, legal and compliance risks, cyber attacks or damage to physical assets). The Guarantor may incur operational risk across the full scope of its business activities, including revenue-generating activities (e.g. sales and trading) and support and control groups (e.g. information technology and trade processing).

Liquidity and Funding Risk: Liquidity is essential to the Guarantor's businesses and the Guarantor relies on external sources to finance a significant portion of its operations. The Guarantor's borrowing costs and access to the debt capital markets depend significantly on its credit ratings. The Guarantor is a holding company and depends on payments from its subsidiaries. Further, the Guarantor's liquidity and financial condition have in the past been, and in the future could be, adversely affected by U.S. and international markets and economic conditions. As a result of the foregoing, there is a risk that the Guarantor will be unable to finance its operations due to a loss of access to the capital markets or difficulty in liquidating its assets; or be unable to meet its financial

D.6 Key information on the key risks that are specific to the Warrants

obligations without experiencing significant business disruption or reputational damage that may threaten its viability as a going concern.

Legal, Regulatory and Compliance Risk: The Guarantor is subject to the risk oflegal or regulatory sanctions, material financial loss including fines, penalties, judgments, damages and/or settlements, or loss to reputation it may suffer as a result of its failure to comply with laws, regulations, rules, related self-regulatory organisation standards and codes of conduct applicable to its business activities. The Guarantor is also subject to contractual and commercial risk, such as the risk that a counterparty's performance obligations will be unenforceable. Additionally, the Guarantor is subject to anti-money laundering and terrorist financing rules and regulations. Further, in today's environment of rapid and possibly transformational regulatory change, the Guarantor also views regulatory change as a component of legal, regulatory and compliance risk.

Risk Management: The Guarantor's risk management strategies, models and processes may not be fully effective in mitigating its risk exposures in all market environments or against all types of risk.

Competitive Environment: The Guarantor faces strong competition from other financial services firms, which could lead to pricing pressures that could materially adversely affect its revenue and profitability. Further, automated trading markets may adversely affect the Guarantor's business and may increase competition (for example by putting increased pressure on bid-offer spreads, commissions, markups or comparable fees). Finally, the Guarantor's ability to retain and attract qualified employees is critical to the success of its business and the failure to do so may materially adversely affect its performance.

International Risk: The Guarantor is subject to numerous political, economic, legal, operational, franchise and other risks as a result of its international operations (including risks of possible nationalisation, expropriation, price controls, capital controls, exchange controls, increased taxes and levies and other restrictive governmental actions, as well as the outbreak of hostilities or political and governmental instability) which could adversely impact its businesses in many ways.

Acquisition, Divestiture and Joint Venture Risk: The Guarantor may be unable to fully capture the expected value from acquisitions, divestitures, joint ventures, minority stakes and strategic alliances.

Risk Relating to the Exercise of Potential Resolution Measures Powers: The application of regulatory requirements and strategies in the United States to facilitate the orderly resolution of large financial institutions may pose a greater risk of loss for the holders of securities issued or guaranteed by Morgan Stanley.

The Warrants are being issued with the intention that they will be purchased only by corporations, partnerships and other entities or individuals having such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Warrants, who are experienced in investing in derivative instruments and who are familiar with secondary market trading in instruments such as the Warrants. Prospective investors should conduct independent investigation and analysis regarding the Warrants and the other assets on which the obligations of the Issuer and the Guarantor to which the value of the Warrants relate as they deem appropriate.

The price of the Warrants may fall in value and investors may lose the value of their entire investment if, among other reasons:

• the value of the relevant underlying basis of reference does not move in the anticipated direction;

• the Issuer and the Guarantor are unable to pay any amounts due under the Warrants;

• the price and/or value of the assets underlying the Warrants are influenced by the political, financial and economic stability of the country and/or region in which it is incorporated or has a place of business;

Section E - Offer

E.2b

E.3

E.4

E.7

Reason for the offer and use of proceeds

Terms and Conditions of the Offer

Interests of natural and legal persons involved in the issue of the Warrants

Estimated expenses charged to the investor by the Issuer or the Dealer

• the Guarantor's credit rating has fallen due to a perception of a fall in the Guarantor's creditworthiness; or

• adjustments to the Warrants made by the Calculation Agent pursuant to the terms of the Warrants.

An investment in Warrants linked to Shares is not directly an investment in the Shares. Warrantholders will not have any rights in relation to the underlying assets nor will it have any recourse to the relevant issuer. Neither the Issuer nor the Guarantor has an ability to control or predict any actions of the issuer of the underlying Shares.

The Issuer may limit the number of Warrants that are exercisable on any date (other than the final exercise date).

The Warrants may be amended, or the Warrants may be terminated or suspended, in each case by the Issuer, if an Additional Disruption Event has occurred.

Investments m Unitary Warrants linked to shares of a non-US Issuer require certain considerations, for example, different accounting treatments and regulations, different securities or commodity trading rules and conventions and different economic environments. Investments in emerging market countries may entail additional risks such as risk of market shutdown, greater governmental involvement in the economy and, in some cases, greater volatility, unpredictability and economic and political instability and higher risk of civil or international conflict or war. Warrantholders will also be exposed to currency exchange rate risks. Investments in emerging markets may involve significant risk of loss. There is a risk that the Issuer may not be able to make payments in respect of the Warrants due to actions taken by a government authority in the Relevant Jurisdiction in which the investor is located. This may cause additional administrative burden or costs on the investor in obtaining any payments due under the Warrants.

The net proceeds of the issue of the Warrants will be used by the relevant Issuer for its general business purposes, including the making of profits and the hedging of certain risks.

The Warrants will be offered to investors by the Dealer at an issue price of 6.0717 per Warrant. The minimum number of Warrants that an investor may purchase is 41,175.

So far as the Issuer is aware, no person involved in the offer of the Warrants has an interest material to the offer.

The Warrants are offered to the investors by the Dealer and the estimated expenses are zero in respect of all the Warrants being issued.