Morgan Stanley Finance LLC filed a free writing prospectus on October 30, 2026, for Preliminary Pricing Supplement No. 19,725, describing Worst-of SX5E, RTY and SPX Contingent Income Memory Auto-Callable Securities due December 5, 2029.

Key Highlights

  • Issuer and guarantor: Morgan Stanley Finance LLC is the issuer, with Morgan Stanley as guarantor.
  • Three underliers: The securities are linked to the EURO STOXX 50 Index (SX5E), the Russell 2000 Index (RTY), and the S&P 500 Index (SPX).
  • Contingent coupon range: The securities offer a contingent coupon of 6.75% to 7.75% per annum, paid monthly, with a memory feature.
  • Coupon and downside barrier: Both the coupon barrier level and the downside threshold level are set at 60% of the initial level for each underlier.
  • Estimated value: The estimated value is $965.30 per security, or within $45.00 of that estimate, against a face amount implied at $1,000.00.
  • Maturity date: December 5, 2029, with a pricing date of November 30, 2026, and a final observation date of November 30, 2029.
  • CUSIP: 61781TA45; the securities will not be listed on any securities exchange.

Structure and Key Terms of the Auto-Callable Securities

According to the filing, Morgan Stanley Finance LLC is offering structured securities linked to the worst-performing of three major equity indexes: the EURO STOXX 50, the Russell 2000, and the S&P 500. The call threshold level is set at 100% of the initial level for each underlier, and automatic early redemption can occur beginning after six months, with monthly redemption determination dates thereafter. The filing states that once the securities are automatically redeemed, no further payments will be made.

The filing discloses that the contingent coupon, ranging from 6.75% to 7.75% per annum, is payable monthly but is contingent on the closing levels of all three underliers on the relevant observation date. The memory feature, described in the accompanying preliminary pricing supplement, allows previously unpaid coupons to be carried forward. Investors, the filing notes, "will not participate in any appreciation in the value of any underlier."

The hypothetical payment table in the filing illustrates that if the worst-performing underlier declines by 40% or less from its initial level, the investor receives $1,000.00 per security at maturity. However, a decline of 41% would result in a payment of $590.00, a decline of 50% would yield $500.00, and a full 100% decline would result in $0.00. The filing states that "the securities do not guarantee the return of any principal," and all payments are subject to the credit risk of Morgan Stanley Finance LLC and its guarantor, Morgan Stanley.

What Was Disclosed

Morgan Stanley Finance LLC disclosed the preliminary terms of structured auto-callable securities linked to three equity indexes, including a contingent coupon of 6.75% to 7.75% per annum, a 60% barrier level, an estimated value of $965.30 per security, and a maturity date of December 5, 2029.