capped booster note on msci golden dragon index - Morgan Stanley ...

<strong>capped</strong> <strong>booster</strong> <strong>note</strong> onmsci golden dragon indexFor distribution in Switzerland only

a leveragedinvestmentopportunityThe Capped Booster Notes offer:XXExposure to the China, Hong Kong and Taiwanequity markets via the MSCI Golden Dragon IndexXXLeveraged upside exposure to the Index, up to apredefined capXXXX1:1 downside exposure (no capital protection)3-year, euro-denominated investment

china: driving aglobal rebound?The Chinese economy appears to have been one of themost resilient to global recession, thanks to fiscal andmonetary policy and strong domestic demand.The IMF has recently predicted growth of 9% for China in2010, higher than previously forecast, and suggestedthat China and other Asian economies are driving theglobal rebound*. Taiwan is also well placed to benefitfrom China growth, with plans to relax restrictions ofoutbound and inbound investments both to and fromChina by the end of 2009.Investors can access the potential of equity markets inChina (including Hong Kong) and neighbouring Taiwan viaour Capped Booster Notes.* Source: IMF World Economic Outlook, October 2009

following thegolden dragonThe Note offers a return linked to the MSCI GoldenDragon Index. This index covers a broad range ofstocks from Hong Kong, China and Taiwan.MSCI Golden Dragon Index, Country Breakdown as at05/10/2009Hong Kong - 36%China - 32%Taiwan - 32%Source: Bloomberg

oost your return potentialThe payout at maturity depends on the performance of theindex, measured as the percentage change over the3-year investment term. There are two possible scenarios:If the index performance is positiveYou receive 100% of your initial investment, plus 1.15 timesthe index performance, up to a maximum redemptionamount of 180%. For example, if the index has positiveperformance of 10% at maturity, you receive 111.5% of par(100% plus 1.15 x 10%).If the index performance is negativeYour capital is at risk. The final redemption amount reflectsthe performance of the index on a 1:1 basis. Forexample, if the index falls by 30%, the <strong>note</strong> redeems at70% of par, a loss of 30% of your initial invstment.final redemption amount (% of par)180%100%0%0%Booster NoteIndex Performanceindex performance

investment considerationsXXCapital is not protected. The final redemptionamount depends on the performance of the Index andcould be zeroXXInvestors do not benefit from any performance of theindex over the cap levelXXThe payout described is provided at maturity only. Ifthe <strong>note</strong>s are sold prior to maturity, or redeemed by theIssuer for reasons stated in the Offering Documents, theproceeds may be less than the initial investment. On asale of the <strong>note</strong>s investors may also be subject totransaction costs including a bid-offer spreadXXInvestors are exposed to the credit risk of the issuer.Although the <strong>note</strong>s are designed to provide the returnsdescribed, payments depend on the ability of the Issuerto meet its financial obligationsXXSince the <strong>note</strong>s are denominated in EUR, there iscurrency risk for Swiss franc investorsAbout The MSCI Golden Dragon IndexThe MSCI Golden Dragon Index is the exclusive propertyof MSCI Barra (“MSCI”). MSCI and the MSCI index namesare service mark(s) of MSCI or its affiliates and havebeen licensed for use for certain purposes by MorganStanley. The financial securities referred to herein arenot sponsored, endorsed, or promoted by MSCI, andMSCI bears no liability with respect to any such financialsecurities.

important informationInvestment decisions should only be made on the basis of theinformation in the base prospectus and final terms for the productincluding the risk factors (the “Offering Documents”), which is theonly binding document and the terms of which will supersede theterms herein This information is not an offer or a solicitation to buyor sell the product and has been prepared solely for informationpurposes.Investors bear the issuer’s credit risk. Accordingly, the value of theNotes is dependent not only on the performance of the underlyingindex but, among others, also on the creditworthiness of the issuerwhich may vary over the term of the Notes.The product and this marketing communication may only be offered,sold or published in jurisdictions in which such offer, sale orpublication is permitted. The product may not be offered, sold ortransferred in the United States to, or for the account or benefit of,any U.S. Person (as defined in Regulation S under the Securities Act1933). This communication is not directed to persons in the UK. Norepresentation or warranty is given with respect to the accuracy orcompleteness of the information herein. Morgan Stanley does notgive investment, tax, or other advice; prospective investors shouldconsult their own professional advisors. This communication is nota product of Morgan Stanley’s Research Department and should notbe regarded as a research recommendation.The Notes are not collective investment schemes as per the SwissFederal Act on Collective Investment Schemes (“CISA”). Accordingly,holders of the <strong>note</strong>s do not benefit from the investor protectionunder the CISA or the approval or supervision by Swiss FinancialMarket Supervisory Authority (FINMA). The base prospectus and asimplified prospectus will be available on 14 October 2009 and canbe obtained free of charge from Bank Morgan Stanley AG,Bahnhofstrasse 92, CH-8021 Zurich, Switzerland and on the websitewww.morganstanleyiq.ch. This information is not an issueprospectus as that term is understood pursuant to article 652a orarticle 1156 of the Swiss Federal Code of Obligations and, accordingto article 5 paragraph 4 CISA, the prospectus requirement istherefore not applicable.The product is not a bank deposit and is not insured by the USFederal Deposit Insurance Corporation or any other governmentalagency, nor is it an obligation of, or guaranteed by, a bank.© 2009 Morgan Stanley. All rights reserved.

key termsIssuer: Morgan StanleyIssuer Rating: A (S&P)Issue Price: 100%Issue Date: 4 November 2009Maturity Date: 5 November 2012Subscription Period: 14 October 2009 to 28 October 2009(The Issuer reserves the right to cancel the issue at any timeduring the subscription period. This will include cancellation ofexisting orders)Underlying Index: MSCI Golden Dragon IndexDenomination (Par): EUR 1,000Listing: SCOACHISIN: XS0457106291Valoren: 10639765MOST INNOVATIVE INRETAIL STRUCTUREDPRODUCTSMOST INNOVATIVETEAM OF THE YEARMORGAN STANLEY & CO INTERNATIONAL PLC25 CABOT SQUARECANARY WHARFLONDON E14 4QAEMAIL: INFO@MORGANSTANLEYIQ.COMWWW.MORGANSTANLEYIQ.COMIQ00184.200910 9 Oct. 2009