Morgan Stanley Finance LLC filed a Free Writing Prospectus on October 28, 2026, for Contingent Income Memory Buffered Auto-Callable Securities linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index, with a maturity date of November 17, 2031.

Key Highlights

  • Underlier: The securities are linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), according to the filing.
  • Contingent coupon rate: The filing discloses a contingent coupon of 10.10% to 11.10% per annum, with a memory feature, paid monthly.
  • Buffer amount: A 15% buffer is provided at maturity, meaning the maximum loss is 85%, per the filing.
  • Estimated value: The filing states an estimated value of $901.00 per security, or within $51.00 of that estimate, against an original issue price of $1,000.00.
  • Auto-call feature: The securities may be automatically redeemed monthly beginning after one year if the underlier closes at or above 100% of its initial level.
  • Pricing and maturity dates: The pricing date is November 12, 2026, and the maturity date is November 17, 2031, per the filing.
  • CUSIP: The filing identifies the securities by CUSIP 61781TC50.

Terms and Structure of the MSFL SPUMP40-Linked Securities

According to the filing, the issuer is Morgan Stanley Finance LLC, with Morgan Stanley acting as guarantor. The securities are designated as "SPUMP40 Contingent Income Memory Buffered Auto-Callable Securities due November 17, 2031," filed under Registration Statement Nos. 333-293641 and 333-293641-01. The coupon barrier level is set at 60% of the initial level, meaning contingent coupon payments depend on the closing level of the underlier on each observation date relative to that barrier.

The filing discloses that the call threshold level is 100% of the initial level, and that redemption determination dates begin after one year and occur monthly thereafter. If the securities are automatically redeemed, no further payments will be made. At maturity, if the underlier has declined by more than 15%, investors receive $1,000 minus the full percentage loss beyond the 15% buffer per security. For example, the filing shows that a 50% decline in the underlier results in a $650.00 payment per security, and a 100% decline results in a $150.00 payment per security.

The filing notes that the estimated value of $901.00 per security is less than the original issue price, and states this is because "the rate we are willing to pay for securities of this type, maturity and issuance size is likely to be lower than the rate implied by our secondary market credit spreads" and that costs associated with "issuing, selling, structuring and hedging the securities" are included in the original issue price. The filing also discloses that the SPUMP40 Index was established on March 14, 2022, and therefore "has very limited operating history," and that a 4% per annum decrement "will adversely affect the performance of the Index in all cases." The securities will not be listed on any securities exchange, per the filing.

What Was Disclosed

Morgan Stanley Finance LLC disclosed the preliminary terms of auto-callable structured securities linked to the SPUMP40 Index, including coupon rates, buffer levels, estimated value, call conditions, and key risk factors associated with the underlying index and the issuer's credit risk.