Arcus 6Y UK & Europe Defensive Step Down Kick Out Plan – MS16

Morgan Stanley & Co. International plc  (https://sp.morganstanley.com/EU/). The product issuer is  Morgan Stanley BV with a guarantee by Morgan Stanley.

The product is designed to provide a return in the form of a cash  payment on termination of the product. The timing and amount  of this payment will depend on the change in value of the  preference shares, which in turn will depend on the performance  of the underlyings. The product has a fixed term and will  terminate on the maturity date, unless terminated early. If, at  maturity, the final reference level of the worst performing underlying has fallen below its barrier level, the product may  return less than the product notional amount or even zero.

Early termination following an autocall: The product will  terminate prior to the maturity date if, on any autocall  observation date, the reference level of the worst performing  underlying is at or above the relevant autocall barrier level. On  any such early termination, you will on the immediately following autocall payment date receive a cash payment equal to the  applicable autocall payment. The relevant dates, autocall barrier  levels and autocall payments are shown in the table(s) in the key information document.

Termination on the maturity date: If the product has not  terminated early, on the maturity date you will receive:

1. if the final reference level of the worst performing underlying is at or above its barrier level, a cash payment equal to GBP 1,000.00; or

2. if the final reference level of the worst performing underlying  is below its barrier level, a cash payment directly linked to the performance of the worst performing underlying. The cash  payment will equal (i) the product notional amount multiplied by (ii) (A) the final reference level of the worst performing  underlying divided by (B) its strike level.

Investors should note that the payments described above are  based on the expected value of the preference shares. Therefore  any return you may receive on the product depends directly on  the value of the preference shares. As such, your return is only  indirectly dependent on the underlyings.

Under the product terms, certain dates specified above and below will be adjusted if the respective date is either not a business day  or not a trading day (as applicable). Any adjustments may affect  the return, if any, you receive.

The product terms also provide  that if certain exceptional events occur (1) adjustments may be  made to the product and/or (2) the issuer may terminate the  product, as applicable, early. These events are specified in the  product terms and principally relate to the product and the  issuer. The preference shares in turn contain provisions allowing  the preference shares to be adjusted or terminated early in the  case of certain exceptional events, in particular relating to the  underlyings. Any such adjustments or early termination are likely to affect the amount and timing of return you receive under the  product, meaning the return (if any) that you receive on such  early termination is likely to be different from the scenarios  described above and may be less than the amount you invested.

You do not have any entitlement to a dividend from any of the underlyings and you have no right to any further entitlement resulting from any
such underlying (e.g., voting rights).

The product is intended to be offered to retail investors who fulfil all of the criteria below:

1. they have the ability to make an informed investment decision  through sufficient knowledge and understanding of the product  and its specific risks and rewards, either independently or  through professional advice, and they may have experience of  investing in and/or holding a number of similar products  providing a similar market exposure;

2. they expect the movement in the underlyings to perform in a  way that generates a positive return. They have a long investment horizon and understand that the product may terminate early;

3. they are able to bear a total loss of their initial investment,  consistent with the redemption profile of the product at maturity  (market risk);

4. they accept the risk that the issuer or guarantor could fail to  pay or perform its obligations under the product irrespective of  the redemption profile of the product (credit risk);

5. they are willing to accept a level of risk of 5 out of 7 to achieve  potential returns, which reflects a medium-high risk (as shown in the summary risk indicator in the key information document which takes into account both market risk and credit risk).