MORGAN STANLEY ASIA PRODUCTS LIMITED · PDF fileMORGAN STANLEY ASIA PRODUCTS LIMITED (incorporated with limited liability in the Cayman Islands) ... In the case of American Style Warrants,

The Final Terms relating to each issue of Unitary Warrants will contain (without limitation) such of the following

information as is applicable in respect of such Unitary Warrants. All references to numbered conditions are to the

terms and conditions of the Unitary Warrants set out in Schedule 3 of the Agency Agreement (as defined in the

Unitary 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 Unitary 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 Issuer

may offer, sell or deliver Warrants only (a) to, or for the account or benefit of, U.S. persons (as defined in

Regulation S under the Securities Act) reasonably believed by the Issuer to be qualified institutional buyers

(each a QIB) as defined in Rule 144A under the Securities Act (Rule 144A) that are also “qualified

purchasers” (QPs) within the meaning of Section 3(c)(7) (Section 3(c)(7)) and as defined in Section 2(a)(51)(A)

of the United States Investment Company Act of 1940, as amended (the 1940 Act) or (b) outside the United

States to, or for the account or benefit of, a purchaser that is not a U.S. person in an offshore transaction in

compliance with Regulation S under the Securities Act. Each purchaser of Warrants being offered to, or for

the account or benefit of a U.S. person is hereby notified that the offer and sale of such Warrants is being

made in reliance upon an exemption from the registration requirements of the Securities Act. The Warrants

are eligible for purchase by Plans (as defined herein) subject to certain conditions. See “ERISA Considerations

for Unitary Warrants” herein.

200,000 American Style Unitary Cash Settled Call Warrants due 9 November 2017

linked to local ordinary shares of Kweichow Moutai Co., Ltd. (China Connect)

to be consolidated and form a single series with

500,000 American Style Unitary Cash Settled Call Warrants due 9 November 2017

linked to local ordinary shares of Kweichow Moutai Co., Ltd. (China Connect)

This document constitutes the Final Terms relating to the issue of Unitary 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 Unitary Warrant Conditions (the

Conditions) set forth in the Base Prospectus dated 23 September 2015 and the Base Prospectus Supplement dated 4

December 2015. These Final Terms contain the final terms of the Unitary Warrants and must be read in conjunction

with the Base Prospectus dated 22 September 2016 approved by the Central Bank of Ireland on 22 September 2016

and the Base Prospectus Supplement dated 18 November 2016 and the Base Prospectus Supplement dated 19

January 2017, which together constitute a base prospectus (the Base Prospectus) for the purposes of the Prospectus

Directive. Full information on the Issuer and the offer of the Unitary Warrants is only available on the basis of the

combination of these Final Terms and the Base Prospectus dated 23 September 2015 and the Base Prospectus

Supplement dated 4 December 2015 and the Base Prospectus dated 22 September 2016 and the Base Prospectus

Supplement dated 18 November 2016 and the Base Prospectus Supplement dated 19 January 2017. Copies of such

Base Prospectuses and the Base Prospectus Supplements are available free of charge to the public at the registered

office of the Issuer and from the specified office of the Irish Agent or may be downloaded free of charge from

http://www.ise.ie/Market-Data-Announcements/Debt/Individual-Debt-Instrument-Data/Dept-Security-

Documents/?progID=121&FIELDSORT=docId.

Save as disclosed in “Offering and Sale”, so far as the Issuer is aware, no person involved in the offer of the

Unitary Warrants has an interest material to the offer.

All purchasers of the Warrants must provide certain representations to the Dealer in the form of the Master

Purchaser Certificate set out as the Appendix attached to the Unitary Warrant Conditions set out in the Base

Prospectus.

References herein to numbered Conditions are to the Terms and Conditions of the Unitary 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; I2155

1.(b) Whether or not the Warrants are to be consolidated and

form a single series with the warrants of an existing

series;

Yes. The 200,000 American Style Cash Settled

Call Warrants due 9 November 2017 linked to

local ordinary shares of Kweichow Moutai Co.,

Ltd. (the Fungible Warrants) are to be

consolidated and form a single series with the

500,000 American Style Cash Settled Call

Warrants linked to local ordinary shares of

Kweichow Moutai Co., Ltd. issued on 12

November 2015 (the Original Warrants and,

together with the Fungible Warrants, the

Warrants) (Bloomberg Code: 600519 C1).

2. Whether the Warrants are Share Warrants or Index

Warrants or a Basket;

Share Warrants relating to the local ordinary

shares of Kweichow Moutai Co., Ltd. (China

Connect) (the Share Company) with the

Bloomberg Code 600519 C1 (the Shares)

3. Launch Date; 22 February 2017

4. The Issue Date of the Warrants; 24 February 2017

5. Whether the Warrants are American Style Warrants or

European Style Warrants;

American Style Warrants

6. Whether the Warrants are Call Warrants or Put

Warrants;

Call Warrants

7. Whether the Warrants are Global Warrants or Definitive

Warrants;

Global Warrants exchangeable into Definitive

Warrants in registered form in limited

circumstances as set out in the Conditions

8.(a) If the Warrants are Share Warrants, whether the

Warrants are Outperformance Warrants or Market

Access Warrants;

Market Access Warrants

8.(b) If the Warrants are Outperformance Warrants, whether

Upfront Discount is applicable, and if so, Upfront

Not applicable

Discount (as a percentage);

8.(c) 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, please see paragraph 8.(d)(i));

Not applicable

8.(d) If the Warrants are Outperformance Warrants, and

Upfront Discount or Daily Accrual is applicable, the

Commission Rate (as a percentage);

Not applicable

8.(d)(i) 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;

Not applicable

8.(d)(ii) If the Warrants are Outperformance Warrants, Daily

Accrual and Rerate are applicable, the Rerate Date;

Not applicable

8.(d)(iii) If Rerate is applicable, Default Adjusted Rate (as a

percentage);

Not applicable

8.(e) If the Warrants are Outperformance Warrants, whether

Variable Daily Accrual is applicable, and if so, the

Variable Daily Accrual Rate (as a percentage);

Not applicable

9. The number of Warrants being issued; The number of Original Warrants that were

issued on 12 November 2015 was 500,000. The

number of Fungible Warrants being issued is

200,000. The total number of Warrants in issue

on the Issue Date of the Fungible Warrants is

700,000.

10.(a) The Issue Price per Warrant (which may be subject to

adjustment in accordance with Condition 17 or 18 in the

case of Index Warrants and Share Warrants,

respectively);

The Issue Price of the Original Warrants was

United States Dollars (USD) 34.1714. The Issue

Price per Fungible Warrant is USD 52.2678,

being the Issuer’s weighted average execution

price (in the Underlying Currency) of the Shares

converted into the Settlement Currency at the

Exchange Rate.

10.(b) Currency in which Warrants are to be denominated and

traded;

USD

11. The Strike Price per Warrant (which may be subject to

adjustment in accordance with Condition 17 or 18 in the

case of Index Warrants and Share Warrants,

respectively);

USD0.00001

12. The Relevant Jurisdiction of the Warrants; The People’s Republic of China

13.(a) If Warrantholder Break Fee is applicable, and if so, the

Warrantholder Break Fee Rate and if the

Warrantholder Break Fee Rate is Flat or Amortised;

Not applicable

13.(b) 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;

Not applicable

14. The Settlement Price per Warrant (which may be

subject to adjustment in accordance with Condition 17

or 18 in the case of Index Warrants and Share Warrants,

As defined in Condition 19

respectively); (NB: This must be expressed as a

monetary amount in respect of Index Warrants);

15. The Interim Payment Amount or the Basket Dividend

Payment Amount (in the case of Basket Warrants);


16. The Applicable Cash Dividend Amount; As defined in Condition 19

17.(a) If the Warrants are Index Warrants, whether

Commissions applies and if so, the Commissions (as a

percentage);

Not applicable

17.(b) 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);

Not applicable

18.(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);

Not applicable

19.(a) The Settlement Date; As defined in Condition 19

19.(b) The Basket Dividend Payment Date; As defined in Condition 19

20.(a) If the Warrants are Index Warrants, the Index Initial; Not applicable

20.(b) If the Warrants are Index Warrants, the Index Final; Not applicable

20.(c) If the Warrants are Index Warrants, the Index Average; Not applicable

21. In the case of European Style Warrants, the Exercise

Date for the Warrants;

Not applicable

22. In the case of American Style Warrants, the Exercise

Period in respect of the Warrants;

From the fourth 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. In the case of American Style Warrants, the Expiration

Date for the Warrants;

9 November 2017

24. In the case of American Style Warrants, whether

Automatic Exercise will apply;

Yes

25. The Share Amount which shall be applied to ascertain

the Cash Settlement Amount (as defined in Condition

19) for each Warrant (such Share Amount shall be

subject to adjustment in accordance with Condition 18);

One Share per Warrant

26. The applicable Business Day Centre(s) for the purposes

of the definition of Business Day in Condition 19;

London, New York and Shanghai Stock

Exchange (China Connect)

27. The Spot Exchange Rate for conversion of any amount

into the relevant Settlement Currency for the purposes

of determining the Cash Settlement Amount;


28. The Settlement Currency for the payment of the Cash

Settlement Amount;

USD

29. The Local Currency in respect of the Shares or the

currency equivalent thereof (if different);

Renminbi (RMB)

30. Qualified Investor; As defined in Condition 19

31.(a) In the case of American Style Warrants, the Minimum

Exercise Number;

One Warrant

31.(b) In the case of American Style Warrants, the Maximum

Exercise Number;

The Maximum Exercise Number of the Warrants

as of the Issue Date of the Fungible Warrants

shall be 700,000.

32.(a) The Minimum Purchase Amount of the Warrants; 4,784 Warrants

32.(b) The Minimum Trading Amount of Warrants; One Warrant

33.(a) For the purposes of Condition 17 (Additional Terms for

Index Warrants), details of the Exchange and Related

Exchange (if any);

Not applicable

33.(b) For the purposes of Condition 17 (Additional Terms for

Index Warrants), details of the relevant Sponsor;

Not applicable

34. For the purposes of Condition 18 (Additional Terms for

Share Warrants) details of the Exchange and Related

Exchange (if any);

Exchange(s): Shanghai Stock Exchange (China

Connect)

Related Exchange(s): All Exchanges

35. Whether Payment Disruption Event is applicable; Yes

36. Details of any certifications required in the Exercise

Notice;

Certification relating to China as indicated in the

form of Exercise Notice in the Agency

Agreement.

37.(a) Whether the Warrants are Additional Warrants; No

37.(b) If the Warrants are Additional Warrants, whether they

are Fungible Additional Warrants or Non-Fungible

Additional Warrants;

Not applicable

37.(c) If the Warrants are Non-Fungible Additional Warrants,

the Original Series;

Not applicable

38. 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);

Private placement

Non-syndicated

39. Potential Section 871(m) transaction under the U.S.

Internal Revenue Code (Code).

Not Applicable

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 Service 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 2017.

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

PART B – Other Information

1 Listing and admission to trading

(i) Listing: Ireland

(i) 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 24 February 2017.

2 Rating

Ratings: The Unitary Warrants to be issued have not been rated.

3 Notification

The Central Bank 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 2017.

4 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 Reasons for the offer, estimated net proceeds and use of proceeds

(i) Reasons for the offer and use of proceeds: See “Use of Proceeds” in the Base Prospectus

(ii) Estimated net proceeds: Not applicable

(iii) Estimated total expenses: Not applicable

6 Details relating to the Underlying Asset(s)

(i) Underlying Asset(s): The Shares

(ii) Issuer of Underlying Asset: Kweichow Moutai Co., Ltd.

(iii) ISIN/Security information code relating to the

Underlying Asset(s):

600519 C1 (China Connect)

(iv) Description of Underlying Asset(s): Not applicable

(v) Details of where information about the past

and the further performance on the Underlying

Asset(s) and its volatility can be obtained:

Bloomberg Financial Markets Information Services

7 Operational information

(i) ISIN Code: US61764N3888

(ii) Common Code: 132185387

(iii) Any clearing system(s) other than Euroclear

Bank S.A./N.V. and Clearstream Banking S.A.

and the relevant identification number(s):

Not applicable

8 Additional Disclosure relating to the Share

(i) Jurisdiction of incorporation: The People’s Republic of China

(ii) Closing price as at the Launch Date: The closing price of Kweichow Moutai Co., Ltd. as at

the Launch Date was RMB 361.89.

(iii) Registered office: The registered office of Kweichow Moutai Co., Ltd. is

at Maotai Town, Renhuai, Guizhou 564501, China.

(iv) Brief description of business of Share

Company:

Kweichow Moutai Co., Ltd. manufactures spirits.

Kweichow Moutai Co., Ltd.'s spirit products are

distilled from sorghum and wheat. Kweichow Moutai

Co., Ltd. markets its products worldwide.

(v) Market capitalisation: The market capitalisation of Kweichow Moutai Co.,

Ltd. as at the Launch Date was RMB 454,605 billion.

(vi) Historical price information for the previous 3

years:

The table below shows the range of prices for the

Shares of Kweichow Moutai Co., Ltd. as quoted on

Shanghai Stock Exchange for the periods specified.

Relevant Period High Price (RMB)

Low Price (RMB)

2014

First Quarter 145.62 97.529

Second Quarter 148.43 118.678

Third Quarter 153.727 127.818

Fourth Quarter 175.90 132.273

2015





2016





2017

2017, January 359.80 332.81

2017, February (up to and

including the Launch

Date)

366.52 341.92

(vii) Historical dividend information for the

previous 3 years:

Relevant Ex-

Date

Payable Date Gross

Amount

(RMB)

Type

25 June 2014 25 June 2014 3.614876 Regular Cash

25 June 2014 26 June 2014 10.000% Stock Dividend

17 July 2015 17 July 2015 3.976364 Regular Cash

17 July 2015 20 July 2015 10.000% Stock Dividend

1 July 2016 1 July 2016 6.171 Regular Cash

(viii) Historical Exchange Rate information for the

previous 3 years:

RMB / USD Exchange Rate

High Low Period End

2014 6.0406 6.2598 6.2055

2015 6.1883 6.4937 6.4937

2016 6.4536 6.9615 6.9450

2017 (up to the Launch Date)

6.8450 6.9640 6.8778

9 Authorisation

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 2016.

The Guarantor has obtained all necessary consents, approvals, and authorisations in connection with the

execution, delivery and performance of the Guarantee.

10 Summary

(i) Issue specific summary: The summary for this series of Warrants is annexed to

these Final Terms.

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

Morgan Stanley Asia Products Limited.

B.2 The domicile and

legal form of the

Issuer, the

legislation under

which the Issuer

operates and its

country of

incorporation

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.

B.4b A description of

any known trends

affecting the

Issuer and the

industries in

which it operates

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

(U.S.) and worldwide; the level and volatility of equity, fixed income and commodity prices

22(4)B.1

22(9)B.1

22(13)B.1

22(4)B.2

22(9)B.2

22(13)B.2

22(4)B.4b

A4.5.2.1

A4.5.2.2

A4.5.2.3

(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.

B.5 Description of the

Group and the

Issuer’s position

within the Group

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.

B.9 Profit forecast or

estimate

Not Applicable; the Issuer has chosen not to include a profit forecast or estimate.

B.10 Qualifications in

the auditors’

report on the

Issuer’s historical

financial

information

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 2014.

B.12 Selected financial

information

relating to the

Issuer

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 2015.

Balance Sheet (in U.S.$ ‘000) 31 Dec 2014 31 Dec 2015 30 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

Condensed statement of

comprehensive income

(in U.S.$ ‘000)

31 Dec

2014

31 Dec

2015

Six months

ended 30 June

2015 2016

Net gains/ (losses) on financial

instruments classified as held

for trading

(5,004) 871 (5,689) 418

Net gains/ (losses) on financial

instruments designated at fair

value through profit or loss

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

no material adverse change in the prospects of the Issuer since 31 December 2015, the date of the

22(4)B.5

22(9) B.5

22(13)B.5

latest published annual audited financial statements of the Issuer.

B.13 Recent material

events particular

to 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.

B.14 Extent to which

the Issuer is

dependent on

other entities

within the Group

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.

B.15 Principal activities

of the Issuer

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

directly or

indirectly owned

or controlled

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.

B.18 Description and

scope of the

Guarantee

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).

B.19 Section B

information about

the Guarantor

The following items B.1 to B.16 shall relate to the Guarantor as if it were the Issuer:

Guarantor

B.1 The legal and

commercial name

of the Guarantor

Morgan Stanley.

B.2 The domicile and

legal form of the

Guarantor, the

legislation under

which the

Guarantor

operates and its

country of

incorporation

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.

B.4b A description of

any known trends

affecting the

Guarantor and

the industries in

which it operates

See B.4b in relation to the Issuer above.

B.5 Description of the

Group and the

Guarantor’s

position within the

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

22(4)B.5

22(4)B.14

22(9)B.14

22(13)B.14

Group customers, including corporations, governments, financial institutions and individuals.

The Guarantor is the parent and financial holding company of the companies in the Group.

B.9 Profit forecast or

estimate

Not Applicable; the Guarantor has chosen not to include a profit forecast or estimate.

B.10 Qualifications in

the auditors’

report on the

Issuer’s historical

financial

information

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

2014.

B.12 Selected financial

information

relating to the

Guarantor

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 2015.

Consolidated Balance Sheet

(U.S.$ in millions) At 31 Dec 2014 At 31 Dec 2015 At 30 June 2016

Total assets 801,510 787,465 828,873

Total liabilities and equity 801,510 787,465 828,873

Consolidated Income

Statement

(U.S.$ in millions)

2014

2015

Six months

ended 30 June

2015 2016

Net revenues 34,275 35,155 19,650 16,701

Income from continuing

operations before income taxes

3,591 8,495 5,582 4,221

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.

B.13 Recent material

events particular

to 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

dependent on

other entities

within the Group

The Guarantor is a holding company for a number of subsidiary companies (directly or indirectly)

and is dependent on their performance.

B.15 Principal activities

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. 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

22(4)B.14

22(9)B.14

22(13)B.14

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

directly or

indirectly owned

or controlled

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 2016.

Section C – Securities

C.1 Type and class of

Warrants

The Warrants are Unitary 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 a depositary common to 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: US61764N3888

Common Code: 132185387

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.

The Issue Price of the Warrants is denominated in USD and will be settled in USD.

C.5 A description of

any restrictions on

the free

transferability of

the Warrants

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.

Unitary Warrants shall comply with the selling restrictions applicable to them as set out in the

section “Offering and Sale”.

A12.4.1.12

22(5)C.1

22(12)C.1

22(5)C.2

22(12)C.2

A5.4.4

The “Additional Selling Restrictions” in respect of Unitary 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.

C.8 Description of the

rights attaching to

the Warrants

The Warrants are Unitary 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 Kweichow Moutai Co., Ltd. with the

Bloomberg Code 600519 C1 (the Shares).

See C.18 for rights relating to Cash Settlement Amounts payable in respect of the Warrants.

C.11 Listing and

admission to

trading/ indication

of market where

securities will be

traded

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 24 February 2017.

C.15 Effect of value of

underlying

instrument(s) on

value of derivative

securities

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 Share 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 Share; if the Cash Settlement Amount is zero,

it represents a total loss of the amount paid for the Warrant.

C.16 Expiration/

maturity date of

derivative

securities

The Warrants expire on 9 November 2017.

C.17 Settlement

procedure for

derivative

securities

The Warrants shall be cash-settled through Clearstream, Luxembourg and/or Euroclear.

C.18 Description of

return on

derivative

securities

The returns on the Warrants shall depend on the performance of the Share.

The Cash Settlement Amount payable in respect of each Warrant is determined as follows:

Max (0, China Settlement Price – Strike Price) – Max (0, (China Settlement Price – Issue Price) x

Tax Rate)

Unless otherwise specified, capitalised terms shall have the following meanings:

Issue Price shall have the meaning specified in the applicable Final Terms; 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

A12.4.1.14

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, 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;

For the purposes of this Element C. 18, China Settlement Price shall have the meaning to it in

Element C. 19 below.

C.19 Description of

exercise price or

final reference

price of

underlying asset

in relation to

derivative

securities

The China Settlement Price of each Warrant shall be

the product of (A) the average of the VWAPs of one Share, expressed in the Settlement Currency,

on each of the five Exchange Business Days prior to and including the Exercise Date or

Expiration Date; and (B) the Share Amount applicable on the Exercise Date or Expiration Date;

Unless otherwise specified, capitalised terms shall have the following meanings:

VWAP means the volume weighted average price as published by Bloomberg Financial Markets

Information Service, as determined by the Calculation Agent, after the market close on the

relevant date.

C.20 Description of

underlying asset

and where

information on

underlying asset

can be found

The Shares have been issued by Kweichow Moutai Co., Ltd. and information relating to it can be

found at Bloomberg Financial Markets Information Services.

C.21 Listing and

admission to

trading/ indication

of market where

securities will be

traded

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 24 February 2017.

Section D – Risks

D.2 Key risks

regarding the

Issuer and the

Guarantor

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).

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.

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.

D.6 Key information

on the key risks

that are specific to

the Warrants

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

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. 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 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.

Investments in Unitary Warrants linked to shares of a non-US Issuer require certain

considerations, for example, different accounting treatments and regulations, different securities

or commodity trading rules and conventions and different economic environments. Investments in

emerging market countries may entail additional risks such as risk of market shutdown, greater

governmental involvement in the economy and, in some cases, greater volatility, unpredictability

and economic and political instability and higher risk of civil or international conflict or war.

Warrantholders will also be exposed to currency exchange rate risks. Investments in emerging

markets may involve significant risk of loss. There is a risk that the Issuer may not be able to

make payments in respect of the Warrants due to actions taken by a government authority in the

Relevant Jurisdiction in which the investor is located. This may cause additional administrative

burden or costs on the investor in obtaining any payments due under the Warrants.

Section E – Offer

E.2b Reason for the

offer and use of

proceeds

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.

E.3 Terms and

Conditions of the

Offer

The Warrants will be offered to investors by the Dealer at an issue price of 52.2678 per Warrant.

The minimum number of Warrants that an investor may purchase is 4,784.

E.4 Interests of

natural and legal

persons involved

in the issue of the

Warrants

So far as the Issuer is aware, no person involved in the offer of the Warrants has an interest

material to the offer.

E.7 Estimated

expenses charged

to the investor by

the Issuer

The Warrants are offered to the investors by the Dealer and the estimated expenses are zero in

respect of all the Warrants being issued.

22(5)E.3

22(12)E.3

22(5)E.4

22(12)E.4

22(4)E.7

22(12)E.7

22(9)E.7