Morgan Stanley Finance LLC filed a Free Writing Prospectus on October 28, 2026, outlining terms for its SPUMP40 Fixed Income Buffered Auto-Callable Securities due November 17, 2031, linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index.

Key Highlights

  • Fixed coupon range: 7.50% to 8.50% per annum, paid monthly.
  • Buffer amount: 15%, meaning the maximum stated loss at maturity is 85% of principal.
  • Estimated value: $916.10 per security, or within $55.00 of that estimate, against a $1,000 issue price.
  • Automatic early redemption: triggered monthly beginning after one year if the underlier closes at or above 100% of the initial level.
  • Pricing date: November 12, 2026; maturity date: November 17, 2031.
  • CUSIP: 61781TNT6; the securities will not be listed on any securities exchange.
  • Underlier: S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), established March 14, 2022.

Terms and Structure of the SPUMP40 Buffered Auto-Callable Securities

According to the filing, the securities are issued by Morgan Stanley Finance LLC (MSFL) and guaranteed by Morgan Stanley (NYSE:MS), with Registration Statement Nos. 333-293641 and 333-293641-01. The underlying index applies a 4% per annum decrement, which the filing states "will adversely affect the performance of the Index in all cases, whether the Index appreciates or depreciates." The index was established on March 14, 2022, giving it, as the filing notes, "very limited operating history."

The filing presents a hypothetical payment table showing that if the underlier declines by 15% or less at the final observation date of November 12, 2031, investors receive $1,000.00 per security (excluding any fixed coupon). A decline of 16% would yield $990.00 per security, a 50% decline would yield $650.00, and a 100% decline would yield $150.00. Investors do not participate in any appreciation in the underlier's value. All payments are stated to be subject to Morgan Stanley's credit risk.

The filing also discloses that MSFL "has no independent operations and will have no independent assets" as a finance subsidiary, and that the estimated value of $916.10 per security is below the original issue price. The filing attributes this gap to costs "associated with issuing, selling, structuring and hedging the securities," which it states "reduce the economic terms of the securities." The calculation agent is described as a subsidiary of Morgan Stanley and an affiliate of MSFL, which the filing identifies as a conflict of interest consideration.

What Was Disclosed

Morgan Stanley Finance LLC disclosed the preliminary terms of auto-callable structured securities linked to a momentum-based equity index with a 4% annual decrement. The filing covers coupon rates, buffer mechanics, estimated value, redemption conditions, and a series of product and underlier risk factors.