MORGAN STANLEY ASIA PRODUCTS LIMITED (incorporated with limited liability in the Cayman Islands) (incorporated in Delaware, U.S.A.) Warrant Programme

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1 The Final Terms relating to each issue of Regulation S Warrants will contain (without limitation) such of the following information as is applicable in respect of such Regulation S Warrants. All references to numbered conditions are to the terms and conditions of the Regulation S Warrants set out in Schedule 1 of the Agency Agreement (as defined in the Regulation S 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 Regulation S Warrant Final Terms. MORGAN STANLEY ASIA PRODUCTS LIMITED (incorporated with limited liability in the Cayman Islands) Guaranteed by (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 Warrants and the Guarantee may not be offered, sold or delivered at any time, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. persons as such term is defined in Regulation S under the Securities Act. 15,000,000 American Style Regulation S Cash Settled Call Warrants due 23 November 2018 linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. (China Connect) to be consolidated and form a single series with (i) 540,000 American Style Regulation S Cash Settled Call Warrants issued on 28 November 2016 and expiring 23 November 2018 linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. (China Connect) and (ii) 460,000 American Style Regulation S Cash Settled Call Warrants issued on 2 December 2016 and expiring 23 November 2018 linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. (China Connect) This document constitutes the Final Terms relating to the issue of Regulation S 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 Regulation S Warrants and must be read in conjunction with such Base Prospectus in order to obtain full information on the Issuer and the Regulation S 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 Debt-Instrument-Data/Dept-Security-Documents/?progID=121&FIELDSORT=docId..

2 References herein to numbered Conditions are to the Terms and Conditions of the Regulation S Warrants and words and expressions defined 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 1.(a) The series number of the Warrants; I (b) Whether or not the Warrants are to be consolidated and form a single series with the warrants of an existing series; 2. Whether the Warrants are Share Warrants, Index Warrants or Fund Warrants or Warrants linked to a Basket; 3. Launch Date; 3 July The Issue Date of the Warrants; 6 July Whether the Warrants are American Style Warrants or European Style Warrants; 6. Whether the Warrants are Call Warrants or Put Warrants; 7. Whether the Warrants are Global Warrants or Definitive Warrants; 8.(a) 8.(b) 8.(c) 8.(d) If the Warrants are Share Warrants, Fund Warrants or Warrants linked to a Basket of Units or Shares, whether the Warrants are Market Access Warrants or Outperformance Warrants; If the Warrants are Market Access Warrants, whether they are China Market Access Warrants; If the Warrants are Outperformance Warrants, whether Upfront Discount is applicable, and if so, the Upfront Discount (as a percentage); If the Warrants are Outperformance Warrants, whether Daily Accrual is applicable, and if so, the Daily Accrual Rate (as a percentage) (except where Rerate is also applicable, in which case, Yes. The 15,000,000 American Style Regulation S Cash Settled Call Warrants due 23 November 2018 linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. (the Fungible Warrants ) are to be consolidated and form a single series with (i) 540,000 American Style Regulation S Cash Settled Call Warrants linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. issued on 28 November 2016 and (ii) 460,000 American Style Regulation S Cash Settled Call Warrants linked to local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. issued on 2 December 2016 (the Original Warrants and, together with the Fungible Warrants, the Warrants ) (Bloomberg Code: C1). Share Warrants relating to the local ordinary shares of Inner Mongolia Yili Industrial Group Co., Ltd. (the Share Company) with the Bloomberg Code C1 (the Shares) American Style Warrants Call Warrants Global Warrants exchangeable into Definitive Warrants in registered form in limited circumstances as set out in the Conditions Market Access Warrants Yes

3 8(e) 8.(f) 8.(f)(i) 8.(f)(ii) 8.(g) please see paragraph 8.(f)); If the Warrants are Outperformance Warrants, and Upfront Discount or Daily Accrual is applicable, the Commission Rate (as a percentage); If the Warrants are Outperformance Warrants, whether Daily Accrual and Rerate are applicable and if so, the Daily Accrual Rate (as a percentage) in respect of the First Period; If the Warrants are Outperformance Warrants and Daily Accrual and Rerate are applicable, the Rerate Date; If Rerate is applicable, Default Adjusted Rate (as a percentage); If the Warrants are Outperformance Warrants, whether Variable Daily Accrual is applicable, and if so, the Variable Daily Accrual Rate (as a percentage); 9. The number of Warrants being issued; The number of Original Warrants that were issued on (i) 28 November 2016 was 540,000 and (ii) 2 December 2016 was 460,000. The number of Fungible Warrants being issued is 15,000,000. The total number of Warrants in issue on the Issue Date of the Fungible Warrants is 16,000, (a) The Issue Price per Warrant; The Issue Price of the Original Warrants issued on (i) 28 November 2016 was United States Dollars (USD) and (ii) 2 December 2016 was USD The Issue Price per Fungible Warrant is USD 3.07, being the Issuer s weighted average execution price (in Renminbi (RMB)) of the Shares converted into the Settlement Currency at the Exchange Rate. 10.(b) Currency in which Warrants are denominated and to be traded; 11. The Strike Price per Warrant (which may be subject to adjustment in accordance with Condition 19 or 20 in the case of Index Warrants, Share Warrants or Fund Warrants, respectively); USD USD The Relevant Jurisdiction of the Warrants; The People s Republic of China 13.(a) 13.(b) 13.(c) If Issuer Optional Early Termination is applicable; If Issuer Optional Early Termination is applicable, the number of Business Day s written notice required to be given by the Issuer in order to terminate; If Issuer Optional Early Termination is applicable, whether Issuer Break Fee is applicable and if so, the Issuer Break Fee Rate (as a percentage) and if the Issuer Break Fee Rate is Flat or Amortised; Yes Five (5) Business Days

4 13.(d) If Issuer Break Fee Rate is Amortised and Day Count Fraction is applicable, the start date and end date over which Day Count Fraction applies; 14. If the Warrants are China Market Access Warrants, whether Tax Event is applicable; 15.(a) 15.(b) 16.(a) 16.(b) 16.(c) 16.(d) 16.(e) If Warrantholder Break Fee is applicable, and if so, the Warrantholder Break Fee Rate (as a percentage) and if the Warrantholder Break Fee Rate is Flat or Amortised; If Warrantholder Break Fee Rate is Amortised and Day Count Fraction is applicable, the start date and end date over which Day Count Fraction applies; If the Warrants are Index Warrants, whether Commissions applies and if so, the Commissions (as a percentage); Applicable If the Warrants are Index Warrants, whether Outperformance is applicable, and if so, if Outperformance Average, Outperformance Initial or Outperformance Final is applicable and the Outperformance Rate (as a percentage); If the Warrants are Index Warrants, the Index Initial; If the Warrants are Index Warrants, the Index Final; If the Warrants are Index Warrants, the Index Average; 17. The Settlement Price per Warrant (which may be subject to adjustment in accordance with Condition 19 or 20 in the case of Index Warrants, Share Warrants or Fund Warrants, respectively); As defined in Condition (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 Management Fee Rate (as a percentage); 19. Valuation Date(s); The Actual Exercise Date or the Expiration Date (as applicable) 20.(a) Whether Averaging is applicable; No 20.(b) If Averaging applies, Averaging Dates; 20.(c) If Averaging applies, whether, in the event of a Disrupted Day (as defined in Condition 21) occurring on an Averaging Date, Omission, Postponement or Modified Postponement (as defined in Condition 21) applies; 21. Settlement Date; As defined in Condition In the case of European Style Warrants, the Exercise Date for the Warrants;

5 23. In the case of American Style Warrants, the Exercise Period in respect of the Warrants; 24. In the case of American Style Warrants, the Expiration Date for the Warrants; 25. In the case of American Style Warrants, whether Automatic Exercise will apply; 26. The Ratio identifying the number of Warrants per underlying Share, Index, Unit or Basket which shall be applied to the Settlement Price in order to ascertain the Cash Settlement Amount for each Warrant (such Ratio shall be subject to adjustment in accordance with Condition 19 or 20 in respect of Index Warrants, Share Warrants and Fund Warrants, respectively); 27. The applicable Business Day Centre(s) for the purposes of the definitions of Business Day in Condition 21; From the fifth Business Day following the date 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 November 2018 Yes 28.(a) Whether Exchange Rate is applicable; Yes 28.(b) If Exchange Rate is applicable, the applicable Exchange Rate for conversion of any amount into the relevant Settlement Currency for the purposes of determining the Cash Settlement Amount (as defined in Condition 21) and details of when and how such rate is to be ascertained; 29. The Settlement Currency for the payment of the Cash Settlement Amount; 30.(a) 30.(b) 31.(a) In the case of American Style Warrants, the Minimum Exercise Number; In the case of American Style Warrants, the Maximum Exercise Number; One Warrant per Share London, New York and Shanghai As defined in Condition 21 USD One Warrant The Minimum Purchase Amount of the Warrants; One Warrant 31.(b) The Minimum Trading Amount of Warrants; One Warrant The Maximum Exercise Number of the Warrants as of the Issue Date of the Fungible Warrants shall be 16,000, The Relevant Time; As defined in Condition Whether Alternative Provisions are applicable; No 34. Whether Alternative Index Cash Settlement Amount is applicable; 35. If Alternative Index Cash Settlement Amount is applicable, the Commission Rate; 36.(a) For the purposes of Condition 19 (Additional Terms for Index Warrants), details of the Exchange and Related Exchange (if any); No Exchange(s): Related Exchange(s):

6 36.(b) For the purposes of Condition 19 (Additional Terms for Index Warrants), details of the relevant Sponsor; 37. For the purposes of Condition 20 (Additional Terms for Share Warrants and Fund Warrants), details of the relevant Exchange and Related Exchange (if any); 38. Whether Exchange Settlement Failure is applicable; 39. In respect of Fund Warrants, applicable Extraordinary Fund Event(s); 40. If a Fund Insolvency Event is applicable under paragraph 39, the Fund Insolvency Entity; 41. If an Adviser Resignation Event and/or Regulatory Action is applicable under paragraph [39], the Fund Administrator, the Fund Adviser or any other relevant key person for the purposes of Condition 20(c)(ii); 42. If the Warrants are Fund Warrants, the Fund Interest; 43. If NAV Threshold Event or Elective Extraordinary Fund Event is applicable under paragraph [39], the NAV Threshold Amount; 44. In the case where Fund Modification, Strategy Breach, Fund Investment Modification and/or Elective Extraordinary Fund Event is applicable under paragraph [39], any relevant Additional Fund Documents; 45. If Reporting Disruption is applicable under paragraph 39, the relevant time period; 46. Details of any certifications required in the Exercise Notice; 47.(a) Whether the Warrants are Additional Warrants; No 47.(b) 47.(c) If the Warrants are Additional Warrants, whether they are Fungible Additional Warrants or Non- Fungible Additional Warrants; If the Warrants are Non-Fungible Additional Warrants, the Original Series; 48. The method of distribution of the Warrants (syndicated or non-syndicated) including, if any, the names of any Dealers other than or in addition to Morgan Stanley & Co. International plc (Additional Dealers); 49. Potential Section 871(m) transaction under the U.S. Internal Revenue Code (Code). Exchange(s): Shanghai Stock Exchange (China Connect) Related Exchange(s): All Exchanges Yes Certification relating to China as indicated in the form of Exercise Notice in the Agency Agreement (unless otherwise agreed by the Issuer). Private placement Non-Syndicated The Issuer believes the Warrants should not be subject to withholding under Section 871(m) of the Code.

7 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 Services 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 2003/71/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 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: By:... Duly authorised

8 PART B Other Information 1 Listing and admission to trading (i) Listing: Ireland (ii) 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 6 July Rating Ratings: 3 Notification The Regulation S Warrants to be issued have not been rated. The Central Bank of Ireland 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 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 Details relating to the Underlying Asset(s) (i) Underlying Asset(s): The Shares (ii) Issuer of Underlying Asset: Inner Mongolia Yili Industrial Group Co., Ltd. (iii) ISIN/Security information code relating to the Underlying Asset(s): C1 (China Connect) (iv) Description of Underlying Asset(s): (v) Details of where information about the past and the further performance on the Underlying Asset(s) and its volatility can be obtained: 6 Operational information (i) ISIN: KYG6272M7146 (ii) Common Code: (iii) Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, S.A. and the relevant identification number(s): 7 Additional Disclosure in relation to the Shares Bloomberg Financial Markets Information Services (i) Jurisdiction of incorporation: The People s Republic of China (ii) Closing price as at the Launch Date: The closing price of Inner Mongolia Yili Industrial Group Co., Ltd. as at the Launch

9 8 Authorisation Date was RMB on the Shanghai Stock Exchange 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 The Guarantor has obtained all necessary consents, approvals, and authorisations in connection with the execution, delivery and performance of the Guarantee. 9 Summary (iii) Issue specific summary: The summary for this series of Warrants is annexed to these Final Terms.

10 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 to E below (and numbered A.1 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.1 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.1 The legal and commercial name of the Issuer B.2 The domicile and legal form of the Issuer, the legislation under which the Issuer operates and its country of incorporation B.4b A description of any known trends affecting the Issuer and the industries in which it operates Morgan Stanley Asia Products Limited. The Issuer is an exempted company incorporated with limited liability in the Cayman Islands pursuant to the Companies Law (2004 Revision) of the Cayman Islands (as amended from time to time). The Issuer is domiciled in the Cayman Islands. The business of the Guarantor (the ultimate holding company of the Issuer) 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; 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 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

11 B.5 Description of the Group and the Issuer s position within the Group B.9 Profit forecast or estimate B.10 Qualifications in the auditors report on the Issuer s historical financial information B.12 Selected financial information relating to the Issuer (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. The Issuer has no subsidiaries. It is wholly owned by Morgan Stanley Asia Securities Products LLC, which is itself a subsidiary of the Guarantor. The Guarantor, a financial holding company, is a global financial services firm that maintains significant market positions in each of its business 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. Not Applicable; the Issuer has chosen not to include a profit forecast or estimate. Not Applicable; the auditors report contains no such qualifications in respect of the audited reports and financial statements of the Issuer for the years ended 31 December 2015 and The selected financial information set out below has been extracted without material adjustment from the interim report for the half year ended 30 June 2016 and the audited reports and financial statements of the Issuer for the year ended 31 December Balance Sheet (in U.S.$ 000) 31 Dec Dec June 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 22( 22( 22( 22( 22( 22( Condensed statement of comprehensive income (in U.S.$ 000) Net gains/ (losses) on financial instruments classified as held for trading Net gains/ (losses) on financial instruments designated at fair value through profit or loss 31 Dec Dec 2015 Six months ended 30 June (5,004) 871 (5,689) 418 5,004 (871) 5,689 (418) 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

12 B.13 Recent material events particular to the Issuer B.14 Extent to which the Issuer is dependent on other entities within the Group B.15 Principal activities of the Issuer B.16 Extent to which the Issuer is directly or indirectly owned or controlled B.18 Description and scope of the Guarantee B.19 Section B information about the Guarantor Guarantor B.1 The legal and commercial name of the Guarantor B.2 The domicile and legal form of the Guarantor, the legislation under which the Guarantor operates and its country of incorporation B.4b A description of any known trends affecting the Guarantor and the industries in which it operates B.5 Description of the Group and the Guarantor s position within the 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. Not Applicable. The Issuer 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 information about the Issuer s position in the Group. The Warrants issued by the Issuer are guaranteed by the Guarantor. The Arranger and Dealer, which is also an affiliate of the Issuer, arranges and distributes the Warrants that are issued by the 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. The Issuer s business consists of the issuance of financial instruments, with a primary focus on the Asia markets, and the hedging of obligations relating thereto. The Issuer is wholly owned by Morgan Stanley Asia Securities Products LLC. It is indirectly owned or controlled by the Guarantor through a number of subsidiaries. The Guarantor will absolutely, unconditionally and irrevocably guarantee the Issuer s payment obligations under each series of Warrants pursuant to a guarantee dated 22 September 2016 (the Guarantee). The following items B.1 to B.16 shall relate to the Guarantor as if it were the Issuer: Morgan Stanley. The Guarantor was incorporated under the laws of the State of Delaware. As a financial holding company, it is regulated by the Board of Governors of the Federal Reserve System (the Federal Reserve) under the Bank Holding Company Act of 1956, as amended (the BHC Act). As a major financial services firm that operates through its subsidiaries and affiliates, the Guarantor is subject to extensive regulation by U.S. federal and state regulatory agencies and securities exchanges and by regulators and exchanges in each of the major markets where it conducts its business. The Guarantor has its registered office at The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, U.S.A., and its principal executive office at 1585 Broadway, New 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. See B.4b in relation to the Issuer above. The Guarantor, a financial holding company, is a global financial services firm that maintains significant market positions in each of its business segments Institutional Securities, Wealth Management and Investment Management. The Guarantor, through its subsidiaries and affiliates, provides a wide variety of products and services to a large and diversified group of clients and (4 22(9 22(

13 Group B.9 Profit forecast or estimate B.10 Qualifications in the auditors report on the Issuer s historical financial information B.12 Selected financial information relating to the Guarantor customers, including corporations, governments, financial institutions and individuals. The Guarantor is the parent and financial holding company of the companies in the Group. Not Applicable; the Guarantor has chosen not to include a profit forecast or estimate. Not Applicable. The auditors report contains no such qualifications in respect of the audited reports and financial statements of the Guarantor for the years ended 31 December 2015 and The selected financial information set out below has been extracted without material adjustment from interim report for the half year ended 30 June 2016 and the audited reports and financial statements of the Guarantor for the year ended 31 December Consolidated Balance Sheet At 31 Dec 2014 At 31 Dec 2015 At 30 June 2016 (U.S.$ in millions) Total assets 801, , ,873 Total liabilities and equity 801, , ,873 B.13 Recent material events particular to the Guarantor B.14 Extent to which the Guarantor is dependent on other entities within the Group B.15 Principal activities of the Guarantor Consolidated Income Six months Statement ended 30 June (U.S.$ in millions) 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. Not Applicable. The Guarantor 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. The Guarantor is a holding company for a number of subsidiary companies (directly or indirectly) and is dependent on their performance. The Guarantor, a financial holding company, is a global financial services firm that maintains 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

14 B.16 Extent to which the Guarantor is directly or indirectly owned or controlled 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 / 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 (4 22(9 22(1 Section C Securities C.1 Type and class of Warrants The Warrants are Regulation S 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 Euroclear Bank S.A./N.A. (Euroclear) and Clearstream Banking, societé anonyme (Clearstream, Luxembourg)with interests in such Global Warrant being traded in the relevant clearing system(s). The Fungible Warrants are to be consolidated and form a single series with the warrants of an existing series. ISIN: KYG6272M7146 Common Code: C.2 Currencies 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. C.5 A description of any restrictions on the free transferability of the Warrants 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 (Hong Kong), Kingdom of Bahrain, Indonesia, Japan, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Thailand, the Republic of Korea (South Korea), the Republic of China (Taiwan), the United Arab Emirates and Vietnam. Regulation S Warrants shall comply with the selling restrictions applicable to them as set out in the section Offering and Sale.

15 C.8 Description of the rights attaching to the Warrants C.11 Listing and admission to trading/ indication of market where securities will be traded C.15 Effect of value of underlying instrument(s) on value of derivative securities C.16 Expiration/ maturity date of derivative securities C.17 Settlement procedure for derivative securities C.18 Description of return on derivative securities The Additional Selling Restrictions in respect of Regulation S 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 The Warrants are Regulation S Warrants which are also American Style Warrants and Call Warrants to which Automatic Exercise applies. 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 Inner Mongolia Yili Industrial Group Co., Ltd. with the Bloomberg Code C1 (the Shares). See C.18 for rights relating to Cash Settlement Amounts payable in respect of the Warrants. Application is expected to be made by the Issuer (or on its behalf) for the Warrants to be admitted to trading on the Irish Stock Exchange s regulated market with effect from 6 July The Cash Settlement Amount to which the holder of each Warrant is entitled is as set out in C.18. Depending on the value of the underlying Shares on the Exercise Date, Actual Exercise Date or Expiration Date, as the case may be, the Cash Settlement Amount may be a positive amount or it may be zero (although it may not be lower than zero). The value of the Cash Settlement Amount is dependent on the performance of the underlying Shares; if the Cash Settlement Amount is zero, it represents a total loss of the amount paid for the Warrant. The Warrants expire on 23 November The Warrants shall be cash-settled through Clearstream, Luxembourg and/or Euroclear. The returns on the Warrants shall depend on the performance of the Shares. The Cash Settlement Amount payable in respect of each Warrant is determined as follows: Where an Issuer Optional Termination Notice has not been given to the Warrantholders: Max (0, Settlement Price Strike Price) Max (0, (Settlement Price Issue Price) x Tax Rate), multiplied by the Ratio (if any). Where a valid Issuer Optional Termination Notice has been given to the Warrantholders: Max (0, Settlement Price Strike Price) Max (0, (Settlement Price Issue Price) x Tax Rate), multiplied by the Ratio (if any). where: Issue Price shall have the meaning specified in the applicable Final Terms; and Issuer Optional Termination Notice means a notice given by the Issuer to the Warrantholders

16 C.19 Description of exercise price or final reference price of underlying asset in relation to derivative securities C.20 Description of underlying asset and where information on underlying asset can be found C.21 Listing and admission to trading/ indication of market where securities will be traded Section D Risks D.2 Key risks regarding the Issuer and the Guarantor designating an optional termination date; 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 or Units, 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. The Settlement Price of each Warrant shall be the Issuer s weighted average execution price (as denominated in the Local Currency) upon the Issuer s disposal of the Shares or Units (as applicable) in relation to the Actual Exercise Date, Exercise Date or the Expiration Date (as applicable) converted into the Settlement Currency at the relevant exchange rate. The Shares have been issued by Inner Mongolia Yili Industrial Group Co., Ltd. and information relating to it can be found at Bloomberg Financial Markets Information Services. Application is expected to be made by the Issuer (or on its behalf) for the Warrants to be admitted to trading on the Irish Stock Exchange s regulated market with effect from 6 July The following key risks affect the Guarantor and, indirectly, the Issuer: Market Risk: The Guarantor's results of operations may be materially affected by market 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).

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

18 Section E Offer E.2b Reason for the offer and use of proceeds E.3 Terms and Conditions of the Offer E.4 Interests of natural and legal persons involved in the issue of the Warrants E.7 Estimated expenses charged to the investor by the Issuer 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; 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 of the underlying Shares. 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 Issuer shall have a right, upon giving sufficient written notice, to terminate all the Warrants in the relevant series prior to the Expiration Date. Any payment a Warrantholder is entitled to receive following such a termination may be less than what they could have received had the Warrants been held to the Exercise Date or Expiration Date (as the case may be). The terms of 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. 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 Fungible Warrants will be offered to investors by the Dealer at an issue price of USD 3.07 per Warrant. The minimum number of Warrants that an investor may purchase is 1. 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. 2 2