Final Terms dated 23 October 2017 MORGAN STANLEY& CO. INTERNATIONAL plc Issue of SEK 200,000,000 Equity Linked Notes due 2023 under the Regulation S Program for the Issuance of Notes, Series A and Series B, Warrants and Certificates PART A CONTRACTUAL TERMS This document constitutes Final Terms relating to the issue of Notes described herein. Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions of the Notes set forth in the Base Prospectus dated 10 October 2017 which constitutes a base prospectus (the "Base Prospectus") for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the Base Prospectus. Full information on the Issuer and the offer of the Notes is only available on the basis of the combination of these Final Terms and the Base Prospectus. However, a summary of the Issue is annexed to these Final Terms. Copies of the Base Prospectus are available from the offices of Morgan Stanley & Co. International plc at 25 Cabot Square, Canary Wharf, London, E14 4QA and on the Issuers' website at http://sp.morganstanley.com/eu/documents and copies of the Base Prospectus and these Final Terms are available on the website of the Luxembourg Stock Exchange at www.bourse.lu. 1. (i) Series Number: EU389 (ii) Series Designation: Series A (iii) Tranche Number: 1 2. Specified Currency or Currencies: 3. Aggregate Nominal Amount of the Notes: Swedish Kroner ( SEK ) SEK 200,000,000 (i) Series: SEK 200,000,000 (ii) Tranche: SEK 200,000,000 4. Issue Price 100 per cent. of par per Note 5. (i) Specified Denominations (Par): SEK 10,000 (ii) Calculation Amount: SEK 10,000 6. (i) Issue Date: 29 December 2017 (ii) Trade Date: 15 December 2017 (iii) Interest Commencement Date (iv) Strike Date: 19 December 2017 (v) Determination Date: 19 December 2022 1
7. Maturity Date: Scheduled Maturity Date is 2 January 2023 8. Specified Day(s): Applicable 9. Interest Basis: Equity-Linked Interest 10. Redemption/Payment Basis: Equity-Linked Redemption 11. Put/Call Options: (i) Redemption at the option of the Issuer: (General 15.5) Condition (ii) Redemption at the option of the Noteholders: (General 15.7) Condition 12. Method of distribution: Non-syndicated PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 13. Linked Interest Provisions: Relevant Underlying Applicable (A) (General Conditions 6.8 and 8) Equity-Linked Interest Notes: Single Share-Linked Interest Notes, Share Basket-Linked Interest Notes: (General Condition 9) Applicable (i) Whether the Notes relate to a single share or a basket of shares (each, a "Share"): Share Basket-Linked Interest Notes (ii) The identity of the relevant issuer(s) (each an "Underlying Issuer"), class of the Share and ISINs or other security identification code for the Share: (a) Share/Shares: Advanced Micro Devices, Inc. (ISIN: US0079031078) (Bloomberg code AMD UW Equity); AMS AG (ISIN: AT0000A18XM4) (Bloomberg code AMS SE Equity); Micron Technology, Inc. (ISIN: US5951121038) (Bloomberg code MU UW Equity); Qualcomm, Inc. (ISIN: US7475251036) (Bloomberg code QCOM UW Equity); (b) Share Issuer(s): 2
(iii) (iv) Partial Lookthrough ADR Provisions: Full Lookthrough ADR Provisions: Advanced Micro Devices, Inc. AMS AG; Micron Technology, Inc. ; and Qualcomm, Inc. (v) Exchange(s): New York Stock Exchange in respect of Advanced Micro Devices, Inc.; (vi) Related Exchange(s): All Exchanges SIX Swiss Exchange in respect of AMS AG; NASDAQ Stock Market, inc. in respect of Micron Technology, Inc. and Qualcomm, Inc. (vii) Determination Agent responsible for calculating Interest Amount: Morgan Stanley & Co. International plc (viii) Determination Time: As per General Condition 9.9 (ix) (x) (xi) Additional Disruption Event(s): (General Condition 9.6) Correction Cut Off Time: (General Condition 9.3(b)) Weighting for each Share comprised in the Basket: Change in Law, Hedging Disruption, Loss of Stock Borrow, and Increased Cost of Hedging within one Settlement Cycle after the original publication and prior to the relevant Interest Payment Date (B) (C) Equity-Linked Interest Notes: Single Index-Linked Interest Notes / Index Basket-Linked Interest Notes: Equity-Linked Interest Notes: Single ETF-Linked Interest Notes, ETF Basket Linked Interest Notes: 3
(General Condition 9) (D) Commodity-Linked Interest Notes (General Condition 10) (E) Currency Linked Interest Notes (General Condition 11) (F) Inflation-Linked Interest Notes (General Condition 12) (G) Fund-Linked Interest Notes (General Condition 13) 14. Linked Interest Provisions: Interest Terms (General Condition 6.8 and Section 3 of the Additional Conditions) (A) Autocallable Notes (No Coupon): (Paragraph 1.1 of Section 3 of the Additional Conditions) Applicable (B) Autocallable Notes (Regular Coupon): (Paragraph 1.2 of Section 3 of the Additional Conditions) (C) Autocallable Notes (Barrier Conditional Coupon): (Paragraph 1.3 of Section 3 of the Additional Conditions) Applicable (i) Interest Payment Dates: 28 March 2018, 29 June 2018, 28 September 2018, 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 30 June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023 adjusted in accordance with the Business Day Convention specified below (ii) Memory Barrier Conditional Coupon: Applicable 4
(iii) Interest Amount is payable if Knock-in Value as of: the relevant Interest Determination Date greater than or equal to the relevant Coupon Barrier Value (iv) Knock-in Value: is the Relevant Underlying Value (v) Coupon Rate: A percentage rate to be determined by the Determination Agent before the Issue Date and notified to the Noteholders not more than 15 Business Days thereafter by publication on www.exceed.se, provided that such percentage rate shall be not less than 2.00 per cent. (vi) Coupon Barrier Value: 70 per cent. of Initial Reference Value (vii) Interest Determination Date(s): (viii) Barrier Observation Date(s): (ix) Barrier Observation Period: 19 March 2018, 19 June 2018, 19 September 2018, 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 (x) Business Day Convention: Following Business Day Convention (xi) Initial Reference Value: Determined in accordance with the Value Determination Terms specified below (xii) (xiii) (xiv) Value Determination Terms for Initial Reference Value: (Section 7 of the Additional Conditions) Value Determination Terms for Final Reference Value: (Section 7 of the Additional Conditions) Value Determination Terms for Relevant Underlying Value: (Section 7 of the Additional Conditions) Closing Value Closing Value 5
(D) Autocallable Notes (Memory Double Barrier Conditional Coupon): (Paragraph 1.4 of Section 3 of the Additional Conditions) PROVISIONS RELATING TO REDEMPTION 15. Call Option (General Condition 15.5) 16. Put Option (General Condition 15.7) 17. Final Redemption Amount of each Note As determined in accordance with paragraph 19 (Linked Redemption Provisions: Final Redemption Amount) below (General Condition 15.1) 18. Linked Redemption Provisions: Relevant Underlying (General Conditions 9 and 15) (A) Equity-Linked Redemption Notes: Single Share-Linked Redemption Notes/ Share Basket-Linked Redemption Notes: (General Condition 9) (i) Whether the Notes relate to a single share or a basket of shares (each, a "Share"): Applicable Share Basket-Linked Redemption Notes (ii) The identity of the relevant issuer(s) (each an "Underlying Issuer"), class of the Share and ISINs or other security identification code for the Share: (a) Share/Shares: Advanced Micro Devices, Inc. (ISIN: US0079031078) (Bloomberg code AMD UW Equity); AMS AG (ISIN: AT0000A18XM4) (Bloomberg code AMS SE Equity); Micron Technology, Inc. (ISIN: US5951121038) (Bloomberg code MU UW Equity); Qualcomm, Inc. (ISIN: US7475251036) (Bloomberg code QCOM UW Equity); (b) Share Issuer(s): Advanced Micro Devices, Inc. AMS AG; Micron Technology, Inc.; and 6
Qualcomm, Inc. (iii) Partial Lookthrough ADR Provisions: (iv) Full Lookthrough ADR Provisions: (v) Exchange(s): New York Stock Exchange in respect of Advanced Micro Devices, Inc.; (vi) Related Exchange(s): All Exchanges SIX Swiss Exchange in respect of AMS AG; NASDAQ Stock Market, inc. in respect of Micron Technology, Inc. and Qualcomm, Inc. (vii) Determination Agent responsible for calculating the Final Redemption Amount: Morgan Stanley & Co. International plc (viii) Determination Time: As per General Condition 9.9 (ix) Additional Disruption Event(s): (General Condition 9.6) (x) Correction Cut Off Time: (General 9.3(b)) Condition Change in Law, Hedging Disruption, Loss of Stock Borrow and Increased Cost of Hedging within one Settlement Cycle after the original publication and prior to the relevant Interest Payment Date (xi) Weighting for each Share comprising the Basket: (B) (C) (D) Equity-Linked Redemption Notes: Single Index-Linked Redemption Notes/ Index Basket-Linked Redemption Notes: (General Condition 9) Equity-Linked Redemption Notes: Single ETF-Linked Redemption Notes/ ETF Basket-Linked Redemption Notes: (General Condition 9) Commodity-Linked Redemption Notes (General Condition 10) 7
(E) (F) Currency-Linked Redemption Notes (General Condition 11) Inflation-Linked Redemption Provisions (General Condition 12) (G) Fund-Linked Redemption Provisions (General Condition 13) 19. Linked Redemption Provisions: Final Redemption Amount (General Condition 15 and Section 3 of the Additional Conditions) (i) Autocallable Notes (Fixed Redemption): (Paragraph 3.1 of Section 3 of the Additional Conditions) (ii) Autocallable Notes (Capitalised Non- Memory Redemption): (Paragraph 3.2 of Section 3 of the Additional Conditions) (iii) Autocallable Notes (Capitalised Memory Redemption): (Paragraph 3.3 of Section 3 of the Additional Conditions) (iv) Autocallable Notes (Basic Performance Linked Redemption): (Paragraph 3.4 of Section 3 of the Additional Conditions) (v) Autocallable Notes (Single Barrier Final Redemption): (Paragraph 3.5 of Section 3 of the Additional Conditions) Applicable 8
Knock-in Value: Elections for Paragraph 3.5(a) of Section 3 of the Additional Conditions: Elections for Paragraph 3.5(b) of Section 3 of the Additional Conditions: Elections for Paragraph 3.5(c) of Section 3 of the Additional Conditions: Final Redemption Barrier Value: Specified Rate 1: Specified Rate 2: Participation Rate: (vi) Autocallable Notes (Dual Barrier Final Redemption 1): (Paragraph 3.6 of Section 3 of the Additional Conditions) (vii) Autocallable Notes (Dual Barrier Final Redemption 2): (Paragraph 3.7 of Section 3 of the Additional Conditions) (viii) Autocallable Notes (Dual Barrier Final Redemption 3): (Paragraph 3.8 of Section 3 of the Additional Conditions) Worst Performance and "N" is equal to 4 If the Determination Agent determines that the Knockin Value as of the Determination Date greater than or equal to the Final Redemption Barrier Value, Fixed Redemption shall apply. Worst-of Basket Performance-Linked Redemption 1 50 per cent of Initial Reference Value 100 per cent. 100 per cent. 100 per cent. 9
(ix) Determination Date: 19 December 2022 (x) Final Redemption Observation Date(s): (xi) Barrier Observation Period: (xii) Initial Reference Value: Determined in accordance with the Value Determination Terms specified below (xiii) (xiv) (xv) Value Determination Terms for Initial Reference Value as of Strike Date: (Section 7 of the Additional Conditions) Value Determination Terms for Final Reference Value as of the Determination Date Value Determination Terms for Relevant Underlying Value as of the relevant date or period: (Section 7 of the Additional Conditions) Closing Value Closing Value Closing Value 20. Early Redemption (A) Autocallable Notes (Autocall 1): (Paragraph 2.1 of Section 3 of the Additional Conditions) Applicable. Fixed Redemption applies. (i) Knock-in Value: is the Relevant Underlying Value (ii) Automatic Early Redemption Event occurs if: the Knock-in Value as of the relevant Automatic Early Redemption Determination Date is greater than or equal to the Autocall Barrier Value in respect of such Automatic Early Redemption Determination Date. (iii) Automatic Early Redemption Determination Date(s): (iv) Barrier Observation Date(s): 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 (vi) Automatic Early Redemption Date(s): Scheduled Automatic Early Redemption Date are 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 30 10
(vii) Automatic Early Redemption Specified Day(s): June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023 Applicable 7 Business Days (viii) Autocall Barrier Value: 80 per cent. of the Initial Reference Value (ix) Automatic Early Redemption Rate: (x) Specified Rate: 100 per cent. (xi) Multiplier: (xii) Value: Initial Reference Determined in accordance with the Value Determination Terms specified below (xiii) Value Determination Terms for Initial Reference Value as of Strike Date: (Section 7 of the Additional Conditions) Closing Value (xiv) Value Determination Terms for determining Final Reference Value (Autocall): Value Determinatio n Terms for Relevant Underlying Value as of the relevant date or period: (Section 7 of the Additional Conditions) Closing Value Closing Value 11
(B) (C) Autocallable Notes (Autocall 2): (Paragraph 2.2 of Section 3 of the Additional Conditions) Autocallable Notes (Autocall 3): (Paragraph 2.3 of Section 3 of the Additional Conditions) (D) (i) Early Redemption Amount upon Event of Default (General Condition 20): (ii) Early Redemption Amount (Tax) upon redemption pursuant to Condition 15.3 (Tax Redemption MSI plc and MSBV Notes). Qualified Financial Institution Determination. The Determination Agent will determine the amount a Qualified Financial Institution would charge to assume all of the Issuer's payment and other obligations with respect to such Notes as if no such Event of Default had occurred or to undertake obligations that would have the effect of preserving the economic equivalent of any payment by the Issuer to the Noteholder with respect to the Notes Early Redemption Amount (Tax) Fair Market Value (E) Inconvertibility Event Provisions: (General Condition 32) GENERAL PROVISIONS APPLICABLE TO THE NOTES 21. Form of Notes: (General Condition 3) 22. Additional Business Centre(s) or other special provisions relating to Payment Dates: Swedish Notes Stockholm 23. Record Date: As set out in the General Conditions 24. Redenomination, renominalisation reconventioning provisions: 25. Taxation: and (i) General Condition 19.1: "Additional Amounts" is (ii) General Condition 19.3: Implementation of Financial Transaction Tax Event is Applicable 26. CNY Centre: 12
27. Illegality and Regulatory Event: (General Condition 21) (i) Illegality and Regulatory Event (General Condition 21): (ii) Early Redemption Amount (Illegality and Regulatory Event): 28. Index Adjustment Events: (General Condition 9.2(b)) Applicable Early Redemption Amount (Illegality and Regulatory Event) Fair Market Value 29. Merger Event or Tender Offer: (General Condition 9.4(a)) 30. Nationalisation, Insolvency and Delisting: (General Condition 9.4(b)) 31. Extraordinary ETF Events: (General Condition 9.5) 32. Additional Disruption Events: (General Condition 9.6) 33. Partial Lookthrough Depositary Receipt Provisions: (General Condition 9.7) 34. Full Lookthrough Depositary Receipt Provisions: (General Condition 9.8) 35. Additional Disruption Events: (General Condition 10.7) 36. Additional Disruption Events: (General Condition 11.5) 37. Additional Disruption Events: (General Condition 12.7) 38. Fund Events: (General Condition 13.5) Merger Event Settlement Amount Fair Market Value shall apply Tender Offer Settlement Amount Fair Market Value shall apply Early Redemption Amount (Nationalisation, Insolvency and Delisting) Fair Market Value Early Redemption Amount (Additional Disruption Event) Fair Market Value shall apply 39. CNY Disruption Events: 13
(General Condition 33) 40. Substitution of Issuer or Guarantor with non Morgan Stanley Group entities: (General Condition 34.2) Applicable 41. FX Final Determination Date: 42. FX Initial Determination Date: DISTRIBUTION (i) If syndicated, names and addresses of Managers and underwriting commitments: and names and addresses of the entities agreeing to place the issue without a firm commitment or on a "best efforts" basis if such entities are not the same as the Managers.) (ii) Date of Subscription Agreement: (iii) Stabilising Manager(s) (if any): 43. If non-syndicated, name and address of dealer: 44. Non-exempt Offer and Offer Period: Morgan Stanley & Co. International plc 25 Cabot Square London E14 4QA An offer of the Notes may be made by the Distributor other than pursuant to Article 3(2) of the Prospective Directive in Sweden ("Public Offer Jurisdictions") during the period from, and including, 23 October 2017 to, and including, 8 December 2017 ("Offer Period") 45. Total commission and concession: In connection with the offer and sale of the Notes, Morgan Stanley & Co. International plc will pay the Distributor a one time distribution fee amount which will not exceed an amount equal to 6 per cent. of the Aggregate Nominal Amount Taxation This discussion is limited to the U.S. federal tax issues addressed below. Additional issues may exist that are not addressed in this discussion and that could affect the federal tax treatment of an 14
investment in the Notes. Holders should seek their own advice based upon their particular circumstances from an independent tax advisor. A Non-U.S. Holder (as defined in the Base Prospectus) should review carefully the section entitled "United States Federal Taxation" in the Base Prospectus. POTENTIAL SECTION 871(M) TRANSACTION Please see paragraph 10 of Part B Other Information of these Final Terms for additional information regarding withholding under Section 871(m) of the Code. Signed on behalf of the Issuer: By: Duly authorised 15
PART B OTHER INFORMATION 1. LISTING AND ADMISSION TO TRADING Listing and admission to Trading: Last day of Trading: Application is expected to be made by the Issuer (or on its behalf) for the Notes to be admitted to trading on the NDX Market by the Issuer (or on its behalf) for the Notes to be admitted to listing and/or trading on NDX with effect from Issue Date No assurances can be given that such application for listing and/or admission to trading will be granted (or, if granted, will be granted by the Issue Date. Determination Date 2. RATINGS Ratings: The Notes will not be rated 3. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER "So far as the Issuer is aware, no person involved in the offer of the Notes has an interest material to the offer". 4. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES (i) Reasons for the offer: (ii) Estimated net proceeds: SEK 200,000,000 (If reasons for offer different from making profit and/or hedging, certain risks will need to include those reasons here.) (If proceeds are intended for more than one use, will need to split out and present in order of priority. If proceeds insufficient to fund all proposed uses state amount and sources of other funding.) (iii) Estimated total expenses: None 5. PERFORMANCE OF UNDERLYING/ EXPLANATION OF EFFECT ON VALUE OF INVESTMENT AND ASSOCIATED RISKS AND OTHER INFORMATION CONCERNING THE UNDERLYING Further details on each of the Underlyings can be found on Bloomberg at <AMD UW Equity> in respect of Advanced Micro Devices, Inc., on Bloomberg at <AMS SE Equity> in respect of AMS AG, on Bloomberg <MU UW Equity> in respect of Micron Technology, Inc. and <QCOM UW Equity> in respect of Qualcomm, Inc.. The value of the Notes is linked to the positive or negative performance of the relevant Underlying. An increase in the value of the relevant Underlying will have a positive effect on the value of the Notes, and a decrease in the value of the relevant Underlying will have a negative effect on the value of the Notes. The interest and redemption amounts payable on the Notes are dependent on the value or 16
performance of the Relevant Underlying reaching a threshold or barrier and a small increase or decrease in the value or performance of the Relevant Underlying near to the threshold or barrier may lead to a significant increase or decrease in the return of the Notes and Noteholders may receive no interest at all. The market price or value of the Notes at any time is expected to be affected by changes in the value of the Relevant Underlying to which the Notes are linked. The Issuer does not intend to provide post-issuance information. The Issuer does not intend to provide post-issuance information. 6. OPERATIONAL INFORMATION ISIN Code: Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking société anonyme and the relevant identification number(s): Delivery: Names and addresses of initial Paying Agent(s): Names and addresses of additional Paying Agent(s) (if any): Intended to be held in a manner which would allow Eurosystem eligibility: SE0010494344 Swedish CSD: Euroclear Sweden AB, Klarabergsviadukten 63, Box 191, SE 101 23, Stockholm, Sweden Delivery free of payment Skandinaviska Enskilda Banken AB Kungstradgardsgatan 8 SE-106 40 Stockholm Sweden No 7. TERMS AND CONDITIONS OF THE OFFER Offer Price: Conditions to which the offer is subject: Description of the application process: Description of possibility to reduce subscriptions and manner for refunding excess amount paid by applicants: Details of the minimum and/or maximum amount of application: Details of the method and time limited for paying up and delivering the Notes: Manner in and date on which Issue Price 17
results of the offer are to be made public: Procedure for exercise of any right of pre-emption, negotiability of subscription rights and treatment of subscription rights not exercised: Process for notification to applicants of the amount allotted and the indication whether dealing may begin before notification is made: Amount of any expenses and taxes specifically charged to the subscriber or purchaser: Name(s) and address(es), to the extent known to the Issuer, of the placers in the various countries where the offer takes place. Not applicable. There are no estimated expenses charged to the investor by the Issuer None 8. PLACING AND UNDERWRITING Name and address of the coordinator(s) of the global offer and of single parts of the offer and, to the extend known to the issuer or to the offeror, of the placers in the various countries where the offer takes place: Name and address of any paying agents and depository agents in each country: Entities agreeing to underwrite the issue on a firm commitment basis, and entities agreeing to place the issue without a firm commitment or under "best efforts" agreements. Where not all of the issue is underwritten, a statement of the portion not covered: 9. OTHER MARKETS All the regulated markets or equivalent markets on which, to the knowledge of the issuer, securities of the same class of securities to be offered or admitted to trading are already admitted to trading: None 10. POTENTIAL SECTION The Issuer has determined that the Notes should not be subject to withholding under Section 871(m) of the 18
871(M) TRANSACTION 11. Prohibition of Sales to EEA Retail Investors: Code, and hereby instructs its agents and withholding agents that no withholding is required, unless such agent or withholding agent knows or has reason to know otherwise 12. Index Sponsor: 19
ISSUE-SPECIFIC SUMMARY OF THE NOTES Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A E (A.1 E.7). This Summary contains all the Elements required to be included in a Summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the Summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the Summary with the mention of "". Section A Introduction and warnings A.1 Introduction and warnings: This summary should be read as an introduction to the Base Prospectus. Any decision to invest in the Notes should be based on consideration of this Base Prospectus as a whole by the investor. 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 the Member States, have to bear the costs of translating this 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 this Base Prospectus or it does not provide, when read together with the other parts of this Base Prospectus, key information in order to aid investors when considering whether to invest in such Notes. A.2 Consent: The Issuer consent to the use of the Base Prospectus in connection with an offer of Notes which is not made within an exemption to publish a prospectus under the Prospectus Directive (Directive 2003/71/EC, as amended) (a "Non-exempt Offer") during the offer period, being from and including 23 October 2017 to and including 8 December 2017 in Sweden by Exceed Capital Sverige (which is authorised to make such offers under the Markets in Financial Instruments Directive (Directive 2004/39/EC)) (each such person an "Authorised Offeror"), subject to the following conditions: An investor intending to acquire or acquiring any Notes from an Authorised Offeror will do so, and offers and sales of the Notes to an investor by an Authorised Offeror will be made, in accordance with any terms and other arrangements in place between such Authorised Offeror and such investor including as to price, allocation, settlement arrangements and any expenses or taxes to be charged to the investor (the "Terms and Conditions of the Non-exempt Offer"). Neither the Issuer will be a party to any such arrangements with investors (other than Exceed Capital Sverige (the "Distribution Agent")) in connection with the offer or sale of the Notes and, accordingly, this Base Prospectus and the final terms of the Notes (the "Final Terms") will not contain such information. In the event of a Non-exempt Offer being made by an Authorised Offeror, the Terms and Conditions of the Non-exempt Offer shall be provided to Investors by that Authorised Offeror at the time the offer is made. None of the Issuers, the Guarantor, the Distribution Agent or other Authorised Offerors has any responsibility or liability for such information. 20
Section B Issuer B.1 Legal name and commercial name of the Issuer: B.2 Domicile and legal form of the Issuer, the legislation under which the Issuer operates and its country of incorporation: Morgan Stanley & Co. International plc ("MSI plc") MSI plc was incorporated as a company limited by shares under the Companies Act 1985 and operates under the Companies Act 2006 in England and Wales. MSI plc was re-registered as a public limited company. MSI plc has its registered office in London, UK B.4b Trends: The business of Morgan Stanley, the ultimate holding company of MSI plc in the past has been, and in the future may continue to be, materially affected by many factors, including: the effect of economic and political conditions and geopolitical events, including the United Kingdom s (the UK ) anticipated withdrawal from the European Union (the EU ); sovereign risk; the effect of market conditions, particularly in the global equity, fixed income, currency, credit and commodities markets, including corporate and mortgage (commercial and residential) lending and commercial real estate markets and energy markets; the impact of current, pending and future legislation (including with respect to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act")) or changes thereto, regulation (including capital, leverage, funding, liquidity and tax requirements), policies (including fiscal and monetary policies established by central banks and financial regulators, and changes to global trade policies), and other 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 Morgan Stanley s unsecured short-term and long-term debt; investor, consumer and business sentiment and confidence in the financial markets; the performance and results of Morgan Stanley s acquisitions, divestitures, joint ventures, strategic alliances or other strategic arrangements; Morgan Stanley 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, central banks, regulators and self-regulatory organizations; the effectiveness of Morgan Stanley s risk management policies; technological changes instituted by Morgan Stanley, its competitors or counterparties and technological risks, including cybersecurity, business continuity and related operational risks; Morgan Stanley 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 Morgan Stanley s businesses are likely to increase costs, thereby affecting results of operations. B.5 The group and the Issuer's position within the group: Morgan Stanley is the ultimate parent undertaking of the group comprising Morgan Stanley and its consolidated subsidiaries (the "Morgan Stanley Group"). MSI plc forms part of a group of companies including MSI plc and all of its subsidiary and associated undertakings ("MSI plc Group"). MSI 21
plc's ultimate UK parent undertaking is Morgan Stanley International Limited and MSI plc's ultimate parent undertaking and controlling entity is Morgan Stanley. B.9 Profit forecast:. MSI plc does not provide profit forecasts. B.10 Audit report qualifications: B.12 Selected historical key financial information:. There are no qualifications in the auditor's reports MSI plc on the financial statements of MSI plc for the years ended 31 December 2015 and 31 December 2016. Selected key financial information relating to MSI plc: Consolidated Balance Sheet (in U.S.$ millions) 31 Dec 2015 31 Dec 2016 Six months ended 30 June 2016 2017 Total assets 394,084 423,346 470,491 439,296 Total liabilities and equity 394,084 423,346 470,491 439,296 Consolidated Income Statement (in U.S.$ millions) 31 Dec 2015 31 Dec 2016 Six months ended 30 June 2016 (restated) 2017 Net gains on financial instruments classified as held for trading Profit (loss) before tax Profit (loss) for the year/period 3,508 3,816 1,911 3,252 710 735 468 999 401 451 296 695 There has been no material adverse change in the prospects of MSI plc since 31 December 2016, the date of the latest published annual audited financial statements of MSI plc. There has been no significant change in the financial or trading position of the MSI plc since 30 June 2017, the date of the latest published interim (unaudited) financial statements of MSI plc. B.13 Recent events materially relevant to evaluation of solvency of the Issuer: B.14 Dependence upon other entities within the group:. MSI plc considers that no event particular to itself and which is to a material extent relevant to the evaluation of its solvency has taken place since the publication of its last annual financial statements. See Element B.5 for the group and the Issuer's position within the group. MSI plc's ultimate parent undertaking and controlling entity is Morgan Stanley. There are substantial inter-relationships between MSI plc and Morgan Stanley as well as other companies in the Morgan Stanley 22
Group, including the provision of funding, capital, services and logistical support to or by MSI plc, as well as common or shared business or operational platforms or systems, including employees. B.15 The Issuer's principal activities: The principal activity of the MSI plc Group is the provision of financial services to corporations, governments and financial institutions. MSI plc operates globally. It operates branches in the Dubai International Financial Centre, South Korea, the Netherlands, Poland, the Qatar Financial Centre and Switzerland. B.16 Controlling persons: MSI plc is wholly and directly owned by Morgan Stanley Investments UK and is ultimately controlled by Morgan Stanley. Section C - The Notes C.1 Type and class of the Notes and ISIN number: C.2 Currency of Issue: C.5 Restrictions on free transferability: C.8 Rights attached to the Notes, Ranking and ISIN: SE0010494344 The Notes are not Notes in respect of which physical settlement may apply or may be elected to apply ("Cash Settlement Notes"). Interest is payable on the notes calculated by reference to the value or performance of shares ("Equity-Linked Interest Notes"). Redemption amounts payable in respect of the Notes are linked to the value or performance of shares ("Equity-Linked Redemption Notes"). Notes are denominated in Swedish Kroner (SEK). The Notes cannot be offered or sold in the U.S. or to U.S. persons, nor held in the U.S. or by U.S. Persons at any time. The Notes may not be acquired or held by, or acquired with the assets of, any employee benefit plan subject to Title I of the United States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), any individual retirement account or plan subject to Section 4975 of the United States Internal Revenue Code of 1986, or any entity whose underlying assets include "plan assets" within the meaning of Section 3(42) of ERISA by reason of any such employee benefit plan's account's or plan's investment therein. THE NOTES, ANY INTEREST THEREIN AND ANY GUARANTEE IN RESPECT THEREOF, AND THE SECURITIES TO BE DELIVERED ON EXERCISE OR REDEMPTION OF THE NOTES (IF ANY), 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 OR OTHER JURISDICTION OF THE UNITED STATES, ARE SUBJECT TO U.S. TAX LAW REQUIREMENTS AND MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED, DELIVERED OR OTHERWISE TRANSFERRED, EXERCISED OR REDEEMED AT ANY TIME, DIRECTLY OR INDIRECTLY, WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT). Rights attached to the Notes: Interest: See Element C.10/C.18 below for interest payable in respect of 23
Limitations to those Rights: the Notes Redemption: See Element C.18 below for the redemption amount payable on the Maturity Date. Governing Law: The Notes will be governed by and construed in accordance with English law. Events of Default: If an Event of Default occurs, the Notes may be redeemed prior to their Maturity Date at the Early Redemption Amount if the Noteholders of not less than 25% in aggregate principal amount of the Notes give written notice to the Issuer declaring the Notes to be immediately due and payable. The Events of Default applicable to the Notes are as follows: (1) non-payment of any amount of principal (within 30 days of the due date) or any amount of interest (within 30 days of the due date) in respect of the Notes; and (2) the Issuer becomes insolvent or is unable to pay its debts as they fall due, or an administrator or liquidator is appointed in respect of the Issuer or the whole or a substantial part of its undertaking, assets and revenues (otherwise than for the purposes of or pursuant to an amalgamation, reorganisation or restructuring whilst solvent), or the Issuer takes any action for a composition with or for the benefit of its creditors generally, or an order is made or an effective resolution is passed for the winding up, liquidation or dissolution of the Issuer (otherwise than for the purposes of or pursuant to an amalgamation, reorganisation or restructuring whilst solvent) and such order or effective resolution has remained in force and has not been rescinded, revoked or set aside for sixty days after the date on which such order is made or effective resolution is passed. Early Redemption Amount: The Early Redemption Amount will be determined by the Determination Agent to be the amount a qualified financial institution (being a financial institution organised under the laws of any jurisdiction in the USA, European Union or Japan and which satisfies certain credit ratings requirements, which the Determination Agent selects for this purposes at the time when the Early Redemption Amount is to be determined) would charge to assume all of the Issuer's obligations in respect of the Notes or to undertake obligations that would have the effect of preserving the economic equivalent of any payments by the Issuer to the Noteholder with respect to the Notes. Status of the Notes: The Notes constitute direct and general obligations of the Issuer ranking pari passu among themselves. Limitations to the rights: Prescription. Claims for principal and interest on redemption in respect of the Notes shall become void unless made, in the case of claims for principal, within a period of 10 years after the due date for payment, and in the case of claims for interest made within five years after the due date for payment. C.10 Derivative component in interest payment (explanation as to how the value Derivative component in interest payment: AUTOCALLABLE NOTES (BARRIER CONDITIONAL COUPON) 24
of the investment is affected by the value of the Relevant Underlying, especially under circumstances where the risks are most evident): C.11 Admission to Trading: C.15 How the value of the investment is affected by the Relevant Underlying (unless the securities have a denomination of at least EUR100,000): The Notes are "Autocallable Notes (Barrier Conditional Coupon)". On an Interest Determination Date, if the Determination Agent determines that the Knock-in Value is greater than or equal to the Coupon Barrier Value in respect of that Interest Determination Date, the Issuer will pay the Coupon Amount on the immediately succeeding Interest Payment Date. No interest will otherwise be paid by the Issuer. The Coupon Amount, if payable, will be an amount per Calculation Amount calculated by the Determination Agent by multiplying the Coupon Rate in respect of that Interest Determination Date and the Calculation Amount and subtracting from this amount any interest which had been previously determined as being payable in respect of the Notes]. Where: Initial Reference Value is, in respect of each of the Basket Components / the Relevant Underlying Value as of the Strike Date; Strike Date: 19 December 2017 Knock-in Value means the Relevant Underlying Value Relevant Underlying Value means the value of the Relevant Underlying determined according to the Value Determination Terms specified below; Interest Payment Dates means 28 March 2018, 29 June 2018, 28 September 2018, 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 30 June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023; and the Interest Determination Dates 19 March 2018, 19 June 2018, 19 September 2018, 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 and the corresponding Coupon Rates indicatively set at 3.75 per cent. but will not be less than 2.00 per cent. Coupon Barrier Values 70 per cent. of the Initial Reference Value Application has been made for Notes to be admitted to trading on the regulated market of NDX Market The market price or value of Notes at any time is expected to be affected by changes in the value of the Relevant Underlying to which the Notes are linked. The interest and redemption amounts payable on the Notes are dependent on the value or performance of the Relevant Underlying reaching a threshold or barrier and a small increase or decrease in the value or performance of the Relevant Underlying near to the threshold or barrier may lead to a significant increase or decrease in the return of the Notes and Noteholders may receive no interest at all The interest and redemption amounts payable on the Notes are linked to the value or performance of the Relevant Underlying as of one or more predefined dates and, irrespective of the level of the Relevant Underlying between these dates, the values or performance of the Relevant Underlying on these dates will affect the value of the Notes more than any other factor. 25
The Final Redemption Amount payable on the Notes is linked to a specified percentage of the performance of the Relevant Underlying and Noteholders may not receive the amount initially invested, and may receive a significantly lesser amount. The market price or value of the Notes at any time is expected to be affected by changes in the value of the Relevant Underlying to which the Notes are linked. C.16 Expiration/ maturity date of the derivative securities the exercise date/final reference date: C.17 Settlement procedure of the derivative securities: C.18 How the return on the derivative securities takes place: Unless previously redeemed, each series of Notes will be redeemed on the applicable Maturity Date at their Final Redemption Amount.. The value or performance of a Relevant Underlying will be determined as of the Determination Date. The Notes are Cash Settlement Notes and will be redeemed by the payment of the Final Redemption Amount. On the relevant date for redemption of the Notes, the Issuer shall pay the relevant redemption amount per Calculation Amount to the Noteholders through the relevant clearing systems, and such amounts shall be credited to the relevant Noteholders' respective accounts held either with such clearing systems or with a financial intermediary that is a member of such clearing systems. Notes are not ordinary debt securities and the interest and/or redemption amount are linked to the performance of the share(s) identified as the Relevant Underlying. Relevant Underlying: Advanced Micro Devices, Inc. (ISIN: US0079031078) (Bloomberg code AMD UW Equity); AMS AG (ISIN: AT0000A18XM4) (Bloomberg code AMS SE Equity); Micron Technology, Inc. (ISIN: US5951121038) (Bloomberg code MU UW Equity); Qualcomm, Inc. (ISIN: US7475251036) (Bloomberg code QCOM UW Equity) Maturity Date: 2 January 2023, subject to adjustment for valuation and non-business days. Final Redemption Amount: Autocallable Notes (Single Barrier Final Redemption) Derivative component in interest payment: Description of the Relevant Underlying to which interest payments are linked: Interest amounts payable in respect of the Notes are linked to the value or performance of a basket of shares being a "Relevant Underlying". See Element C.1 above for further details. AUTOCALLABLE NOTES (BARRIER CONDITIONAL COUPON) The Notes are "Autocallable Notes (Barrier Conditional Coupon)". On an Interest Determination Date, if the Determination Agent determines that the Knock-in Value is greater than or equal to the Coupon Barrier Value in respect of that Interest Determination Date, 26
the Issuer will pay the Coupon Amount on the immediately succeeding Interest Payment Date. No interest will otherwise be paid by the Issuer. The Coupon Amount, if payable, will be an amount per Calculation Amount calculated by the Determination Agent by multiplying the Coupon Rate in respect of that Interest Determination Date and the Calculation Amount and subtracting from this amount any interest which had been previously determined as being payable in respect of the Notes. Where: Initial Reference Value is, in respect of each of the Basket Components / the Relevant Underlying Value as of the Strike Date; Strike Date: 19 December 2017 Knock-In Value means the Relevant Underlying Value Relevant Underlying Value means the value of the Relevant Underlying determined according to the Value Determination Terms specified below; Interest Payment Dates means 28 March 2018, 29 June 2018, 28 September 2018, 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 30 June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023; and the Interest Determination Dates 19 March 2018, 19 June 2018, 19 September 2018, 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 and the corresponding Coupon Rates indicatively set at 3.75 per cent. but will not be less than 2.00 per cent. Coupon Barrier Values 70 per cent. of the Initial Reference Value Early Redemption. Automatic Early Redemption Event applies in respect of the Notes. The Notes will be redeemed on the immediately succeeding Automatic Early Redemption Date at the Automatic Early Redemption Amount, if, on any Automatic Early Redemption Valuation Date, the Determination Agent determines that an Automatic Early Redemption Event has occurred. An Automatic Early Redemption Event occurs if, as of any Automatic Early Redemption Valuation Date, the Relevant Underlying Value is / greater than or equal to the Automatic Early Redemption Level. Where: Automatic Early Redemption Level means 80% of the Initial Reference Value; Automatic Early Redemption Valuation Dates means 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 Automatic Early Redemption Dates means 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 27
30 June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023 Automatic Early Redemption Amount means an amount equal to 100 per cent. of the Calculation Amount AUTOCALL NOTES (AUTOCALL 1) If, on any Automatic Early Redemption Determination Date, the Determination Agent determines that the Knock-in Value is greater than or equal to the Autocall Barrier Value in respect of such Automatic Early Redemption Determination Date, the Notes will be redeemed on the immediately succeeding Automatic Early Redemption Date at an amount per Calculation Amount equal to the product of (A) the Calculation Amount and the Specified Rate. Where: Automatic Early Redemption Dates means 4 January 2019, 28 March 2019, 1 July 2019, 30 September 2019, 7 January 2020, 30 March 2020, 30 June 2020, 30 September 2020, 5 January 2021, 30 March 2021, 1 July 2021, 29 September 2021, 30 December 2021, 30 March 2022, 30 June 2022, 28 September 2022 and 2 January 2023 Specified Automatic Early Redemption Determination Dates means 19 December 2018, 19 March 2019, 19 June 2019, 19 September 2019, 19 December 2019, 19 March 2020, 19 June 2020, 21 September 2020, 21 December 2020, 19 March 2021, 21 June 2021, 20 September 2021, 20 December 2021, 21 March 2022, 20 June 2022, 19 September 2022 and 19 December 2022 Initial Reference Value means the Relevant Underlying Value as of the Strike Date; Relevant Underlying Value is the value of the Relevant Underlying, determined according to the Value Determination Terms specified below; Knock-in Value means the Relevant Underlying Value, determined according to the Value Determination Terms specified below Specified Rate is 100 per cent. VALUE DETERMINATION TERMS For determining Initial Reference Value, Final Reference Value and Relevant Underlying Value: The Determination Agent will determine the value of the Relevant Underlying as of closing price on the relevant date as the Determination Agent determines is appropriate Derivative component in redemption payment: AUTOCALLABLE NOTES OPTION 5 - AUTOCALLABLE NOTES (SINGLE BARRIER FINAL REDEMPTION) If, on the Determination Date, the Determination Agent determines that the Knock-in Value is greater than or equal to the Final Redemption Barrier Value, the Issuer will pay an amount per Calculation Amount equal to (i) the product of the Calculation Amount and the Specified Rate 1. In all other cases, the Issuer will pay an amount per Calculation Amount equal to the product of the Calculation Amount and the sum of (A) the 28