12% EXPRESS CERTIFICATE

Transcription

1 12% EXPRESS CERTIFICATE on the S&P BRIC 40 INDEX For distribution in Switzerland only

2 an express route to attractive returns The 4-Year euro-denominated Express Certificate offers: Exposure to some of the world s most dynamic regions, via the S&P BRIC 40 Index Potential for attractive pre-defined return as long as the index performance is positive Potential to realise profits early A safety barrier: capital is at risk only if the index falls by 40% or more

3 looking to benefit from BRIC? BRIC has become a well-known acronym for some of the world s most important emerging markets: Brazil, Russia, India and China. These countries typically have large reserves of natural resources as well as large, well-qualified workforces and strong domestic demand. The Morgan Stanley Express Certificate offers exposure to these countries via the S&P BRIC 40 Index, which comprises 40 of the largest and most liquid companies across the BRIC region. The certificate may appeal to investors who expect the BRIC 40 Index to have positive performance over the next 4 years, but may not have a firm view on timing.

4 potential to realise profits early With the Express Certificate, investors can realise an attractive pre-defined return of 12% per annum as long as the S&P BRIC40 Index has positive performance, however small. The index level is recorded annually at the end of years 1, 2, 3 and 4. If the index is above its initial level, the certificate terminates automatically. You receive EUR 100 per certificate plus a return of 12% for each year since the start of the certificate. What if there is no automatic termination? If there is no automatic termination in any of years 1 to 4, the repayment in year 4 depends on the level of the S&P BRIC 40 Index at the end of the 4-year term. There are two scenarios: If the index is above 60% of its initial level, you receive EUR 100 per certificate. If the index is at or below 60% of its initial level, capital is at risk. Losses reflect the performance of the index, on a 1:1 basis. For example if the index is at 30% of its initial level, you receive EUR 30 per certificate, a 70% loss on the initial investment.

5 how it works Year 1: Is index above its initial level? EUR 112 Year 2: Is index above its initial level? Year 3: Is index above its initial level? EUR 124 EUR 136 Year 4: Is index above its initial level? EUR 148 Is index above 60% of initial level? EUR 100 Capital at risk. Investors have a 1:1 exposure to the index

6 investment considerations capital protection. If there is no automatic termination, capital repayment depends on the level of the index at expiry and could be zero Limited growth potential. The certificate offers the opportunity for capital gain only as a fixed one-off repayment. Investors do not participate directly in any capital growth in the index The payout described is provided at only at expiry or following an automatic termination. If the certificates are sold at any other time, or redeemed by the Issuer for other reasons stated in the Offering Documents, the proceeds may be less than the initial investment. On the sale of the certificate, investors may also be subject to transaction costs including a bid-offer spread Credit risk. Although the product is designed to provide the returns described, payments depend on the ability of the issuer (Morgan Stanley) to meet its financial obligations Since the certificates are denominated in EUR, there is currency risk for Swiss franc investors About the S&P BRIC 40 Index Standard & Poor s, S&P and S&P BRIC 40 are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Morgan Stanley & Co. International plc. The Certificates are not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of investing in the Certificates.

7 important information Investment decisions should only be made on the basis of the information in the base prospectus and final terms for the product including the risk factors (the Offering Documents ), which is the only binding document and the terms of which will supersede the terms herein. This information is not an offer or a solicitation to buy or sell the product and has been prepared solely for information purposes. Investors bear the issuer risk. Accordingly, the value of the certificates is dependent not only on the performance of the underlying index but, among others, also on the creditworthiness of the issuer which may vary over the term of the certificates. The product and this marketing communication may only be offered, sold or published in jurisdictions in which such offer, sale or publication is permitted. The product may not be offered, sold or transferred in the United States to, or for the account or benefit of, any U.S. Person (as defined in Regulation S under the Securities Act 1933). This communication is not directed to persons in the UK. representation or warranty is given with respect to the accuracy or completeness of the information herein. Morgan Stanley does not give investment, tax, or other advice; prospective investors should consult their own professional advisors. This communication is not a product of Morgan Stanley s Research Department and should not be regarded as a research recommendation. The certificates are not collective investment schemes as per the Swiss Federal Act on Collective Investment Schemes ( CISA ). Accordingly, holders of the certificates do not benefit from the investor protection under the CISA or the approval or supervision by Swiss Financial Market Supervisory Authority (FINMA). A base prospectus and simplified prospectus pursuant to article 5 CISA will be available on 28 September 2009 and can be obtained free of charge from Bank Morgan Stanley AG, Bahnhofstrasse 92, CH-8021 Zurich, Switzerland and on the website This information is not an issue prospectus as that term is understood pursuant to article 652a or article 1156 of the Swiss Federal Code of Obligations and, according to article 5 paragraph 4 CISA, the prospectus requirement is therefore not applicable. The product is not a bank deposit and is not insured by the US Federal Deposit Insurance Corporation or any other governmental agency, nor is it an obligation of, or guaranteed by, a bank Morgan Stanley. All rights reserved.

8 key terms Issuer: Morgan Stanley Issuer Rating: A (S&P ) Issue Price: EUR 100 Additional Fee: Up to EUR 1.5 (paid to distributor) Issue Date: 30 October 2009 Exercise Date: 23 October 2013 Observation Dates: 25 October 2010, 24 October 2011, 23 October 2012 and 23 October 2013 Subscription Period: 28 September 2009 to 23 October 2009 at 1pm CET (The Issuer reserves the right to cancel the issue at any time during the subscription period. This will include cancellation of existing orders) Underlying Index: S&P BRIC 40 Index Listing: ne ISIN: DE000MS8FGM7 Valor: MOST INNOVATIVE IN RETAIL STRUCTURED PRODUCTS MOST INNOVATIVE TEAM OF THE YEAR MORGAN STANLEY & CO INTERNATIONAL PLC 25 CABOT SQUARE CANARY WHARF LONDON E14 4QA INFO@MORGANSTANLEYIQ.COM IQ Oct. 2009