Morgan Stanley Finance LLC filed a free writing prospectus on October 28, 2026, disclosing preliminary terms for its SPUMP40 Contingent Income Memory Buffered Auto-Callable Securities due November 17, 2031, linked to the S&P U.S. Equity Momentum 40% VT 4% Decrement Index.

Key Highlights

  • Contingent coupon range: 10.80% to 11.80% per annum, paid monthly, with a memory feature, according to the filing.
  • Call threshold: Automatic early redemption is triggered if the underlier closes at or above 90% of the initial level on any monthly redemption determination date beginning after one year.
  • Buffer amount: 15% downside buffer at maturity, with a stated maximum loss of 85% of principal.
  • Estimated value: $902.40 per security, or within $52.40 of that estimate, which is less than the original issue price.
  • CUSIP: 61781TC84; pricing date is November 12, 2026, with a final observation date of November 12, 2031.
  • Underlier established: The S&P U.S. Equity Momentum 40% VT 4% Decrement Index was established on March 14, 2022, giving it, according to the filing, "very limited operating history."
  • No exchange listing: The filing states the securities will not be listed on any securities exchange and secondary trading may be limited.

Terms and Structure of the October 2026 SPUMP40 Securities Offering

The securities are issued by Morgan Stanley Finance LLC (MSFL), with Morgan Stanley as guarantor, under registration statement numbers 333-293641 and 333-293641-01. The filing identifies NYSE:MS as the parent guarantor. The underlier is the S&P U.S. Equity Momentum 40% VT 4% Decrement Index (SPUMP40), which, according to the filing, applies a fixed 4% per annum decrement that "will adversely affect the performance of the Index in all cases, whether the Index appreciates or depreciates." The index also incorporates E-mini Russell 2000 futures contracts among its components, exposing investors to risks associated with small-capitalization companies.

The filing's hypothetical payment table illustrates that at maturity, investors receive $1,000.00 per security if the underlier declines by up to 15%, but receive $990.00 if it declines 16% and $650.00 if it declines 50%. A full 100% decline would produce a payment of $150.00 per security. The filing notes that all payments are subject to Morgan Stanley's credit risk, and that MSFL, as a finance subsidiary, "has no independent operations and will have no independent assets." The coupon barrier level is set at 75% of the initial level; contingent coupons are paid only when the underlier's closing level on the relevant observation date is at or above that barrier.

The filing discloses that the estimated value of $902.40 per security reflects Morgan Stanley's own pricing and valuation models, which "may differ from those of other dealers," and is described as neither a maximum nor a minimum secondary market price. Costs associated with issuing, selling, structuring, and hedging the securities are included in the original issue price and, according to the filing, "reduce the economic terms of the securities." U.S. federal income tax consequences are described in the filing as "uncertain."

What Was Disclosed

Morgan Stanley Finance LLC disclosed preliminary terms for auto-callable structured notes linked to the SPUMP40 index, including a contingent coupon of 10.80% to 11.80% per annum, a 15% buffer, an estimated value of $902.40, and a maturity date of November 17, 2031, in a free writing prospectus filed October 28, 2026.