The issuer has filed a registration
statement (including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at
www.sec.gov. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the
prospectus if you request it by calling toll-free
1-800-584-6837.
Underlyings
For more information about the
underlyings, including historical performance information, see the
accompanying preliminary terms.
Risk
Considerations
The risks set forth below are discussed in
more detail in the “Risk Factors” section in the accompanying
preliminary terms. Please review those risk factors carefully prior
to making an investment decision.
Risks Relating to an
Investment in the Securities
●The
securities provide a minimum payment at maturity of only 20% of
your principal.
●The
securities do not provide for the regular payment of interest and
may pay no interest over the entire term of the
securities.
●The
contingent quarterly coupon, if any, is based only on the
determination closing levels of the underlyings on the related
quarterly observation date at the end of the related interest
period.
●Investors
will not participate in any appreciation of either of the
underlyings.
●The
securities are subject to our credit risk, and any actual or
anticipated changes to our credit ratings or credit spreads may
adversely affect the market value of the
securities.
●As
a finance subsidiary, MSFL has no independent operations and will
have no independent assets.
●The
market price will be influenced by many unpredictable
factors.
●Reinvestment
risk.
●The
securities will not be listed on any securities exchange and
secondary trading may be limited, and accordingly, you should be
willing to hold your securities for the entire 1.5-year term of the
securities.
●The
rate we are willing to pay for securities of this type, maturity
and issuance size is likely to be lower than the rate implied by
our secondary market credit spreads and advantageous to us. Both
the lower rate and the inclusion of costs associated with issuing,
selling, structuring and hedging the securities in the original
issue price reduce the economic terms of the securities, cause the
estimated value of the securities to be less than the original
issue price and will adversely affect secondary market
prices.
●The
estimated value of the securities is approximately $968.00 per
security, or within $35.00 of that estimate, and is determined by
reference to our pricing and valuation models, which may differ
from those of other dealers and is not a maximum or minimum
secondary market price.
●Not
equivalent to investing in the underlyings or the stocks composing
the RTY Index or the Technology Select Sector
Index.
●Hedging
and trading activity by our affiliates could potentially affect the
value of the securities.
●The
calculation agent, which is a subsidiary of Morgan Stanley and an
affiliate of MSFL, will make determinations with respect to the
securities.
●The
U.S. federal income tax consequences of an investment in the
securities are uncertain.
Risks Relating to the
Underlyings
●You
are exposed to the price risk of each of the underlyings, with
respect to both the contingent quarterly coupons, if any, and the
payment at maturity.
●Because
the securities are linked to the performance of the worst
performing underlying, you are exposed to greater risks of
receiving no contingent quarterly coupons and sustaining a
significant loss on your investment than if the securities were
linked to just one underlying.
●The
securities are linked to the Russell 2000® Index and are
subject to risks associated with small-capitalization
companies.
●Adjustments
to the RTY Index could adversely affect the value of the
securities.
●Investing
in the securities exposes investors to risks associated with
investments in securities with a concentration in the technology
sector.
●The
antidilution adjustments the calculation agent is required to make
do not cover every event that could affect the XLK
Shares.
●Adjustments
to the XLK Shares or the index tracked by the XLK Shares could
adversely affect the value of the
securities.
●The
performance and market price of the XLK Shares, particularly during
periods of market volatility, may not correlate with the
performance of the Technology Select Sector Index, the performance
of the component securities of the Technology Select Sector Index
or the net asset value per share of the XLK
Shares.
Tax
Considerations
You should review carefully the discussion
in the accompanying preliminary terms under the caption “Additional
Information About the Securities–Tax considerations” concerning the
U.S. federal income tax consequences of an investment in the
securities, and you should consult your tax
adviser.