Morgan Stanley (MS) S-4/ARegistration of securities issued in business combination transactions (amended)

As filed with the Securities and Exchange Commission on June 12, 2020

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

(Exact Name of Registrant as Specified in Its Charter)

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The attached proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY—SUBJECT TO COMPLETION—DATED JUNE 12, 2020

MERGER PROPOSED—YOUR VOTE IS IMPORTANT

Dear Stockholders of E*TRADE Financial Corporation:

On February 20, 2020, Morgan Stanley, Moon-Eagle Merger Sub, Inc., a wholly owned subsidiary of Morgan Stanley (“Merger Sub”), and E*TRADE Financial Corporation (“E*TRADE”) entered into an Agreement and Plan of Merger (the “merger agreement”), providing for the merger of Merger Sub with and into E*TRADE, with E*TRADE continuing as the surviving corporation (the “Merger”). Pursuant to the merger agreement, the parties also intend, and Morgan Stanley has agreed to take such actions as are necessary to cause, immediately following the effective time of the Merger, the surviving corporation in the Merger to merge with and into a newly established wholly owned subsidiary of Morgan Stanley (“Second Merger Sub”) with Second Merger Sub surviving as a wholly owned subsidiary of Morgan Stanley (the “Second Merger” and, together with the Merger, the “Mergers”).

In connection with the Merger, Morgan Stanley will issue shares of common stock of Morgan Stanley to holders of E*TRADE common stock and shares of newly created series of preferred stock of Morgan Stanley to holders of E*TRADE preferred stock.

E*TRADE will hold a special meeting of stockholders (the “E*TRADE special meeting”) to vote on a proposal to adopt the merger agreement (the “merger agreement proposal”) and approve related matters as described in the attached proxy statement/prospectus. Under the laws of the State of Delaware, the approval of E*TRADE’s stockholders must be obtained before the Merger can be completed. Approval of the merger agreement proposal requires the affirmative vote of holders of a majority in voting power of the outstanding shares of E*TRADE common stock, at the E*TRADE special meeting via www.virtualshareholdermeeting.com/ETFC2020SM (the “E*TRADE meeting website”) or by proxy, entitled to vote on the merger agreement proposal. At the E*TRADE special meeting, E*TRADE will also propose that its stockholders vote on proposals (i) to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to each E*TRADE named executive officer in connection with the Merger (the “advisory compensation proposal”) and (ii) to adjourn the E*TRADE special meeting, if necessary or appropriate, to solicit additional proxies in favor of the merger agreement proposal if there are not sufficient votes at the time of such adjournment to adopt the merger agreement (the “adjournment proposal”). Approval of each of the advisory compensation proposal and the adjournment proposal requires the affirmative vote of the majority of the voting power present at the E*TRADE special meeting via the E*TRADE meeting website or represented by proxy and entitled to vote on such proposals.

YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.Whether or not you expect to attend the E*TRADE special meeting, we urge you to submit a proxy to have your shares voted as promptly as possible by either: (1) logging onto the website shown on your proxy card and following the instructions to vote online; (2) dialing the toll-free number shown on your proxy card and following the instructions to vote by phone; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the E*TRADE special meeting. If your shares are held in an E*TRADE plan or in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction form furnished by the plan trustee or administrator, or such broker, bank or other nominee, as appropriate.

Due to concerns regarding the coronavirus outbreak (“COVID-19”) and to assist in protecting the health and well-being of our stockholders and employees, the E*TRADE special meeting will be held exclusively in a virtual format to provide a consistent experience to all stockholders regardless of location on July 17, 2020 at 8:30 a.m.

Eastern Time. We have adopted a virtual format for the E*TRADE special meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We designed the format of the E*TRADE special meeting to ensure that our stockholders who attend the E*TRADE special meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You are entitled to attend and participate in the E*TRADE special meeting only if you were a stockholder of record as of the close on June 10, 2020, the record date for the E*TRADE special meeting, or hold a valid proxy of such a stockholder for the E*TRADE special meeting. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. Please note that you will not be able to attend the virtual E*TRADE special meeting in person.

E*TRADE’s board of directors unanimously determined that the merger agreement and the transactions contemplated by the merger agreement are advisable and fair to, and in the best interests of, E*TRADE and E*TRADE stockholders, and unanimously recommends that holders of E*TRADE common stock vote “FOR” the merger agreement proposal, “FOR” the advisory compensation proposal and “FOR” the adjournment proposal.

If the Merger is completed, each outstanding share of E*TRADE common stock (with certain exceptions described in the accompanying proxy statement/prospectus) will be entitled to the right to receive 1.0432 shares of Morgan Stanley common stock, without interest and subject to any applicable withholding taxes for cash paid in lieu of fractional shares (the “Common Merger Consideration”). Although the number of shares of Morgan Stanley common stock that holders of E*TRADE common stock will receive in the Merger is fixed, the market value of the Common Merger Consideration will fluctuate with the market price of Morgan Stanley common stock and will not be known at the time that holders of E*TRADE common stock vote to adopt the merger agreement. Based on the closing price of Morgan Stanley’s common stock on the New York Stock Exchange (the “NYSE”) on February 19, 2020, the last trading day before the public announcement of the Merger, the 1.0432 exchange ratio represented approximately $58.74 in implied value for each share of E*TRADE commonstock. Based on Morgan Stanley’s closing price on June 10, 2020 of $48.69, the 1.0432 exchange ratio represented approximately $50.79 in implied value for each share of E*TRADE common stock. Based upon the estimated number of shares of commonstock as well as the outstanding equity awards of the parties that are expected to be outstanding immediately prior to the consummation of the Merger, we estimate that, as of immediately following completion of the Merger, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 87% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 13% of the outstanding shares of Morgan Stanley common stock (or, on a fully diluted basis, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 88% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 12% of the shares of Morgan Stanley common stock).We urge you to obtain current market quotations for Morgan Stanley’s common stock traded on the NYSE (trading symbol “MS”) and E*TRADE’s common stock traded on The Nasdaq Stock Market LLC (the “Nasdaq”) (trading symbol “ETFC”).

The obligations of Morgan Stanley and E*TRADE to complete the Merger are subject to the satisfaction or waiver of a number of conditions set forth in the merger agreement, a copy of which is included as Annex A to the attached proxy statement/prospectus. The attached proxy statement/prospectus describes the E*TRADE special meeting, the Merger, documents and agreements related to the Merger and other related matters. It also contains or references information about Morgan Stanley and E*TRADE and certain related agreements and matters.Please carefully read the entire attached proxy statement/prospectus, including “Risk Factors” beginning on page 37 of the attached proxy statement/ prospectus, for a discussion of the risks relating to the proposed Merger. You can also obtain information about Morgan Stanley and E*TRADE from documents that each has filed with the Securities and Exchange Commission.

Michael A. Pizzi

Chief Executive Officer

E*TRADE Financial Corporation

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection with the Merger described in the attached proxy statement/prospectus or determined if the attached proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This document and the accompanying proxy statement/prospectus is dated June 12, 2020 and is first being mailed to stockholders of record of E*TRADE on or about June 12, 2020.

ADDITIONAL INFORMATION

The accompanying document is the proxy statement of E*TRADE for the E*TRADE special meeting and the prospectus of Morgan Stanley for the shares of Morgan Stanley common stock and Morgan Stanley preferred stock to be issued to E*TRADE stockholders as consideration in the Merger. The accompanying proxy statement/ prospectus incorporates by reference important business and financial information about E*TRADE and Morgan Stanley from documents that are not included in or delivered with the accompanying proxy statement/prospectus. You can obtain the documents incorporated by reference into the accompanying proxy statement/prospectus (other than certain exhibits or schedules to these documents), without charge, by requesting them in writing or by telephone from E*TRADE or Morgan Stanley at the following addresses and telephone numbers, or through the Securities and Exchange Commission website at www.sec.gov:

In addition, if you have any questions concerning the merger agreement or the Merger or the other transactions contemplated by the merger agreement, or the accompanying proxy statement/prospectus, or if you would like additional copies of this proxy statement/prospectus or documents incorporated by reference herein, or if you need help voting your shares of E*TRADE common stock, please contact E*TRADE’s proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll-Free: (888) 750-5834
Banks & Brokers May Call Collect: (212) 750-5833

If you would like to request documents, please do so no later than five business days before the date of the E*TRADE special meeting (which date is July 17, 2020).

See “Where You Can Find More Information” beginning on page 163 of the accompanying proxy statement/prospectus for further information.

E*TRADE FINANCIAL CORPORATION

671 North Glebe Road, Ballston Tower
Arlington, Virginia 22203
(646) 521-4340

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JULY 17, 2020

This is a notice that a special meeting of stockholders (the “E*TRADE special meeting”) of E*TRADE Financial Corporation (“E*TRADE”) will be held exclusively via the Internet, on July 17, 2020 at 8:30 a.m., Eastern Time, at www.virtualshareholdermeeting.com/ETFC2020SM (the “E*TRADE meeting website”). The E*TRADE special meeting will be held for the following purposes:

Due to concerns regarding the coronavirus outbreak ("COVID-19") and to assist in protecting the health and well-being of our stockholders and employees, the E*TRADE special meeting will be held exclusively in a virtual format to provide a consistent experience to all stockholders regardless of location on July 17, 2020 at 8:30 a.m. Eastern Time. We have adopted a virtual format for the E*TRADE special meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We designed the format of the E*TRADE special meeting to ensure that our stockholders who attend the E*TRADE special meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You are entitled to attend and participate in the E*TRADE special meeting only if you were a stockholder of record as of the close on June 10, 2020, the record date for the E*TRADE special meeting, or hold a valid proxy of such a stockholder for the E*TRADE special meeting. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. Please note that you will not be able to attend the virtual E*TRADE special meeting in person.

This proxy statement/prospectus describes the proposals listed above in more detail, as well as other matters contemplated in connection with the proposed Merger. Please refer to the attached document, including the attached merger agreement and all other annexes and any documents incorporated by reference, for further information with respect to the business to be transacted at the E*TRADE special meeting. You are encouraged to read the entire document carefully before voting.

E*TRADE’s board of directors unanimously (i) determined that it is in the best interests of E*TRADE and its stockholders, and declared it advisable, for E*TRADE to enter into the merger agreement, (ii) approved the execution, delivery and performance by E*TRADE of the merger agreement and the consummation of the transactions contemplated thereby, including the Merger, and (iii) resolved to recommend adoption of the merger agreement by E*TRADE’s stockholders and that the adoption of the merger agreement be submitted to a vote at a meeting of E*TRADE’s stockholders. Accordingly, the E*TRADE board of directors recommends that holders of E*TRADE common stock vote “FOR” the adoption of the merger agreement, “FOR” the approval on an advisory (non-binding) basis of certain compensation that may be paid or become payable to E*TRADE’s named executive officers in connection with the Merger and “FOR” the adjournment of the E*TRADE special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to adopt the merger agreement.

June 10, 2020 has been fixed as the record date for determination of holders E*TRADE common stock entitled to receive notice of, and to vote at, the E*TRADE special meeting or any adjournments or postponements thereof. Only holders of record of E*TRADE common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the E*TRADE special meeting.

A complete list of E*TRADE stockholders of record entitled to vote at the E*TRADE special meeting will be available for inspection at the principal place of business of E*TRADE at 671 North Glebe Road, Ballston Tower, Arlington, Virginia 22203 during regular business hours for a period of no less than 10 days before the E*TRADE special meeting. If E*TRADE’s headquarters are closed for health and safety reasons related to COVID-19 during such period, the list of stockholders will be made available for inspection upon request via e-mail to IR@etrade.com, subject to E*TRADE’s satisfactory verification of stockholder status. The list of stockholders will also be made available online during the E*TRADE special meeting at the E*TRADE meeting website.

YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.The Merger between E*TRADE and Morgan Stanley cannot be completed without the adoption of the merger agreement by the affirmative vote, at the E*TRADE special meeting via the E*TRADE meeting website or by proxy, of holders representing a majority of the voting power of the outstanding shares of E*TRADE common stock entitled to vote on the merger agreement proposal as of the record date for the E*TRADE special meeting.

Whether or not you expect to attend the E*TRADE special meeting, we urge you to submit a proxy to have your shares voted as promptly as possible by either: (1) logging onto the website shown on your proxy card and following the instructions to vote online; (2) dialing the toll-free number shown on your proxy card and following the instructions to vote by phone; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the E*TRADE special meeting. If your shares are held in an E*TRADE plan or in the name of a broker, bank or other nominee, please follow the instructions on the voting instruction form furnished by the plan trustee or administrator, or such broker, bank or other nominee, as appropriate.

If you have any questions concerning the merger agreement or the Merger or the other transactions contemplated by the merger agreement, or the accompanying proxy statement/prospectus, or if you would like additional copies of this proxy statement/prospectus or documents incorporated by reference herein, or if you need help voting your shares of E*TRADE common stock, please contact E*TRADE’s proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll-Free: (888) 750-5834
Banks & Brokers May Call Collect: (212) 750-5833

Very truly yours,

Rodger A. Lawson

Chair of the Board

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS

The following are some questions that you, as a stockholder of E*TRADE, may have regarding the Merger and other matters being considered at the E*TRADE special meeting and brief answers to those questions. To better understand these matters, and for a description of the legal terms governing the Merger, E*TRADE urges you to carefully read the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Merger and the other matters being considered at the E*TRADE special meeting. Additional important information is also contained in the annexes to this proxy statement/prospectus to and the documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Q: Why am I receiving this document?

A:Morgan Stanley, Moon-Eagle Merger Sub, Inc., a wholly owned subsidiary of Morgan Stanley (“Merger Sub”), and E*TRADE have entered into an Agreement and Plan of Merger, dated as of February 20, 2020 (as it may be amended from time to time, the “merger agreement”), providing for the merger of Merger Sub with and into E*TRADE (the “Merger”), with E*TRADE surviving the Merger as a wholly owned subsidiary of Morgan Stanley. The parties also intend, immediately following the effective time of the Merger, for E*TRADE to merge with and into a newly established wholly owned subsidiary of Morgan Stanley (“Second Merger Sub”), with Second Merger Sub surviving as a wholly owned subsidiary of Morgan Stanley (the “Second Merger” and, together with the Merger, the “Mergers”). In order to complete the Mergers, E*TRADE stockholders must approve the proposal to adopt the merger agreement and all other conditions to the Mergers must be satisfied or waived.

E*TRADE will hold the E*TRADE special meeting to obtain approval of the merger agreement proposal and approvals with respect to certain other related matters. This proxy statement/prospectus, which you should read carefully, contains important information about the Mergers and other matters being considered at the E*TRADE special meeting.

This document is being delivered to you as both a proxy statement of E*TRADE and a prospectus of Morgan Stanley in connection with the Merger. It is the proxy statement by which the E*TRADE board of directors is soliciting proxies from E*TRADE stockholders to vote at the E*TRADE special meeting, or at any adjournment or postponement of the E*TRADE special meeting, on the approval of the merger agreement proposal, the approval of the advisory compensation proposal and the approval of the adjournment proposal. In addition, this document is the prospectus by which Morgan Stanley will issue shares of Morgan Stanley common stock and Morgan Stanley preferred stock to E*TRADE stockholders in the Merger in accordance with the merger agreement.

Your vote is important. We encourage you to vote as soon as possible.

Q: What is the purpose of the E*TRADE special meeting?

A:At the E*TRADE special meeting, holders of E*TRADE common stock will act upon all the matters outlined in the Notice of Special Meeting of Stockholders. These include:

Q: What is a proxy and how does it work?

A: The E*TRADE board of directors is asking for your proxy.A “proxy” is your legal designation of another person to vote the stock you own in the manner you direct. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. By giving your proxy to the persons named as proxy holders in the proxy card accompanying this proxy statement/prospectus, you authorize them to vote your shares of E*TRADE common stock, $0.01 par value per share, at the E*TRADE special meeting in the manner you direct. You may cast votes of “FOR,” “AGAINST” or “ABSTAIN” with respect to all, some or none of the matters we are submitting to a vote of holders of E*TRADE common stock at the E*TRADE special meeting.

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If you complete and submit your proxy in one of the manners described below, but do not specify how to vote, the proxy holders will vote your shares “FOR” each of the proposals described below.

Q: What will E*TRADE stockholders receive for their shares of E*TRADE common stock in the Merger?

A:At the effective time of the Merger (the “effective time”), each share of E*TRADE common stock issued and outstanding immediately prior to the effective time (other than shares of E*TRADE common stock held in (1) treasury and (2) by Morgan Stanley (other than any such shares held by Morgan Stanley (i) in its fiduciary, representative or other capacity on behalf of other persons, (ii) as a result of debts previously contracted by it, (iii) in its capacity as an underwriter or market-maker or in connection with its proprietary trading or arbitrage activities or other similar activities in the ordinary course of business, (iv) in the context of its ordinary course brokerage (including prime brokerage), asset management, private banking, wealth management, research or similar activities or (v) in connection with its transactions that are undertaken by pension funds or employee benefit programs (all such shares, “Fiduciary Shares”)), which are to be cancelled at the effective time (collectively, the “excluded shares”)) will be converted into the right to receive 1.0432 shares of Morgan Stanley common stock (the “share consideration”). No fractional shares of Morgan Stanley common stock will be issued and each E*TRADE stockholder who would otherwise have been entitled to receive a fraction of a share of Morgan Stanley common stock in connection with the Merger shall receive in lieu thereof a cash payment (together with the share consideration, the “Common Merger Consideration”), without interest and subject to any applicable withholding taxes, in accordance with the merger agreement.

Although the number of shares of Morgan Stanley common stock that E*TRADE stockholders will receive in the Merger is fixed, the market value of the Common Merger Consideration will fluctuate with the market price of Morgan Stanley common stock and will not be known at the time that holders of E*TRADE common stock vote to adopt the merger agreement.Based on the closing price of Morgan Stanley’s common stock on the New York Stock Exchange (the “NYSE”) on February 19, 2020, the last trading day before the public announcement of the Merger, the 1.0432 exchange ratio represented approximately $58.74 in implied value for each share of E*TRADEcommon stock. Based on Morgan Stanley’s closing price on June 10, 2020 of $48.69, the 1.0432 exchange ratio represented approximately $50.79 in implied value for each share of E*TRADE common stock.The market price of Morgan Stanley common stock when E*TRADE stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of shares of Morgan Stanley common stock on the date of this proxy statement/prospectus or at the time of the E*TRADE special meeting.

Q: If I am a holder of E*TRADE common stock, how will I receive the Common Merger Consideration to which I am entitled?

A:The conversion of E*TRADE common stock into the right to receive the Common Merger Consideration will occur automatically upon the completion of the Merger. Promptly after the effective time and in any event within three (3) business days of the completion of the Merger, an exchange agent will mail to each holder of record of E*TRADE common stock (whose shares were converted into the right to receive the Common Merger Consideration pursuant to the merger agreement) a letter of transmittal and instructions for use in effecting the surrender of certificates representing shares of E*TRADE common stock (“Certificates”) and book-entry shares representing shares of E*TRADE common stock (“Uncertificated Shares”) in exchange for the Common Merger Consideration and any dividends or other distributions to which such Certificates or Uncertificated Shares become entitled to pursuant to the merger agreement.

Upon receipt by the exchange agent of (i) either Certificates or Uncertificated Shares and (ii) a duly completed and validly executed letter of transmittal, and such other documents as may be required pursuant to the instructions in the letter of transmittal and otherwise by the exchange agent, the holder of such Certificates or Uncertificated Shares will be entitled to receive the Common Merger Consideration in exchange therefor.

Q: Who will own Morgan Stanley common stock immediately following the transactions?

A:Morgan Stanley and E*TRADE estimate that, as of immediately following completion of the Merger, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 87% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 13% of the outstanding shares of Morgan Stanley common stock (or, on a fully diluted basis, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 88% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 12% of the shares of Morgan Stanley common stock).

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Q: How important is my vote?

A:Your vote “FOR” each proposal presented at the E*TRADE special meeting is very important, and you are encouraged to submit a proxy or proxies as soon as possible.

Approval of the merger agreement proposal requires the affirmative vote of holders of a majority in voting power of the outstanding shares of E*TRADE common stock, at the E*TRADE special meeting via the E*TRADE meeting website or by proxy, entitled to vote on the merger agreement proposal.Any abstention by a holder of E*TRADE common stock and the failure of any holder of E*TRADE common stock to submit a vote will have the same effect as voting against the merger agreement proposal.

Adoption of the advisory compensation proposal requires the affirmative vote of the majority of the voting power present via the E*TRADE meeting website or represented by proxy and entitled to vote on such proposal. Abstentions from voting by an E*TRADE stockholder attending the E*TRADE special meeting via the E*TRADE meeting website or voting by proxy will have the same effect as a vote against the advisory compensation proposal. A failure to attend the E*TRADE special meeting via the E*TRADE meeting website or by proxy will have no effect on the outcome of the vote on the advisory compensation proposal. Because the advisory compensation proposal is non-binding, if the merger agreement is approved by E*TRADE stockholders and the Merger is completed, the compensation that is the subject of the advisory compensation proposal, including amounts Morgan Stanley or E*TRADE are contractually obligated to pay, would still be paid regardless of the outcome of the non-binding advisory vote.

Approval of the adjournment proposal requires the affirmative vote of the majority of the voting power present via the E*TRADE meeting website or represented by proxy and entitled to vote on such proposal. Abstentions from voting by an E*TRADE stockholder attending the E*TRADE special meeting via the E*TRADE meeting website or voting by proxy will have the same effect as a vote against the adjournment proposal. A failure to attend the E*TRADE special meeting via the E*TRADE meeting website or by proxy will have no effect on the outcome of the vote on the adjournment proposal.

See “The E*TRADE Special Meeting—Vote Required” beginning on page 51 of this proxy statement/prospectus.

Q: How does the E*TRADE board of directors recommend that I vote?

A:E*TRADE’s board of directors, after considering the various factors described under “The Merger—E*TRADE’s Reasons for the Merger; Recommendation of the E*TRADE Board of Directors” beginning on page 64 of this proxy statement/prospectus, the comprehensive process conducted by the E*TRADE board of directors and the alternatives to the Merger (including E*TRADE remaining as a standalone company), unanimously (i) determined that it is in the best interests of E*TRADE and its stockholders, and declared it advisable, for E*TRADE to enter into the merger agreement, (ii) approved the execution, delivery and performance by E*TRADE of the merger agreement and the consummation of the transactions contemplated thereby, including the Mergers, and (iii) resolved to recommend the adoption of the merger agreement by holders of E*TRADE common stock and that the adoption of the merger agreement be submitted to a vote at a meeting of holders of E*TRADE common stock.

Accordingly, the E*TRADE board of directors unanimously recommends that holders of E*TRADE common stock vote “FOR” the adoption of the merger agreement, “FOR” the approval on an advisory (non-binding) basis of certain compensation that may be paid or become payable to E*TRADE’s named executive officer in connection with the Merger and “FOR” the adjournment of the E*TRADE special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to adopt the merger agreement.

Q: Will the Morgan Stanley common stock received at the time of completion of the Merger be traded on an exchange?

A:Yes. It is a condition to the consummation of the Merger that the shares of Morgan Stanley common stock to be issued to E*TRADE stockholders in connection with the Merger be authorized for listing on the NYSE, subject to official notice of issuance.

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Q: How will Morgan Stanley stockholders be affected by the Merger?

A:Upon completion of the Merger, each Morgan Stanley stockholder will hold the same number of shares of Morgan Stanley stock that such stockholder held immediately prior to completion of the Merger. As a result of the Merger, Morgan Stanley stockholders will own shares in a larger consolidated company with more assets. However, because in connection with the Merger, Morgan Stanley will be issuing additional shares of Morgan Stanley common stock to E*TRADE stockholders in exchange for their shares of E*TRADE common stock, each outstanding share of Morgan Stanley common stock as of immediately prior to the Merger will represent a smaller percentage of the aggregate number of shares of Morgan Stanley common stock outstanding after the Merger.

Q: What are the U.S. federal income tax consequences of the Mergers to holders of E*TRADE stock?

A:For U.S. federal income tax purposes, the Mergers, taken together, are intended to constitute a single integrated transaction that qualifies as a “reorganization” within the meaning of section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and each of E*TRADE and Morgan Stanley expects to receive a tax opinion from its counsel, Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) and Davis Polk & Wardwell LLP (“Davis Polk”), respectively, to the effect that, for U.S. federal income tax purposes, the Mergers will constitute a reorganization within the meaning of section 368(a) of the Code. These opinions of counsel will be based on customary assumptions and representations, covenants, and undertakings of E*TRADE, Morgan Stanley, Merger Sub and Second Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Mergers could differ materially from those described in this proxy statement/prospectus. The obligation of each of E*TRADE and Morgan Stanley to consummate the Mergers, however, is not conditioned upon the receipt of such opinions of Skadden, Davis Polk or any other counsel, nor will the parties request a ruling from the U.S. Internal Revenue Service (the “IRS”) regarding the qualification of the Mergers as a reorganization within the meaning of section 368(a) of the Code. Assuming that the Mergers qualify as a reorganization within the meaning of section 368(a) of the Code, holders of E*TRADE stock will generally not recognize gain or loss for U.S. federal income tax purposes, except with respect to cash received in lieu of fractional shares of Morgan Stanley common stock.

The U.S. federal income tax consequences described above may not apply to all holders of E*TRADE stock. You should read “U.S. Federal Income Tax Considerations” beginning on page 117 of this proxy statement/prospectus for a more complete discussion of the U.S. federal income tax considerations relating to the Mergers. Tax matters can be complicated and the tax consequences of the Mergers to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the Mergers to you.

Q: When do Morgan Stanley and E*TRADE expect to complete the Merger?

A:Morgan Stanley and E*TRADE currently expect to complete the Merger in the fourth quarter of 2020. However, neither Morgan Stanley nor E*TRADE can predict the actual date on which the Mergers will be completed, nor can the parties provide any assurance that the Mergers will be completed. See “Risk Factors,” “The Merger—Regulatory Approvals Required for the Merger” and “The Merger Agreement—Conditions to Completion of the Merger” beginning on pages 37, 88 and 98, respectively, of this proxy statement/prospectus.

Q: Is the completion of the Merger subject to any conditions?

A:Yes. Morgan Stanley and E*TRADE are not required to complete the Merger unless certain conditions are satisfied (or, to the extent permitted by applicable law, waived). These conditions include, among others, the approval and adoption of the merger agreement by holders of E*TRADE common stock (which condition may not be waived), the expiration or termination of any applicable waiting period, or any extension thereof, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) (which waiting period expired on April 10, 2020 at 11:59 p.m. Eastern Time) and receipt of certain other governmental approvals. For a more complete summary of the conditions that must be satisfied (or, to the extent permitted by applicable law, waived) prior to completion of the Merger, see “The Merger Agreement—Conditions to Completion of the Merger” and “The Merger—Regulatory Approvals Required for the Merger” beginning on pages 98 and 88, respectively, of this proxy statement/prospectus.

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Q: What happens if the Merger is not completed?

A:In the event that the merger agreement is not adopted by E*TRADE’s stockholders at the E*TRADE special meeting or the Merger is not completed for any other reason, E*TRADE’s stockholders will not receive any consideration for shares of E*TRADE stock they own. Instead, E*TRADE will remain an independent public company, E*TRADE common stock will continue to be listed and traded on The Nasdaq Stock Market LLC (the “Nasdaq”) and registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and E*TRADE will continue to file periodic reports with the Securities and Exchange Commission (the “SEC”) on account of E*TRADE’s common stock.

Under specified circumstances, E*TRADE and/or Morgan Stanley may be required to pay a termination fee upon termination of the merger agreement, as described under “The Merger Agreement—Termination of the Merger Agreement” beginning on page 114 of this proxy statement/prospectus.

Q: When and where is the E*TRADE special meeting?

A:Due to concerns regarding COVID-19 and to assist in protecting the health and well-being of our stockholders and employees, the E*TRADE special meeting will be held exclusively in a virtual format to provide a consistent experience to all stockholders regardless of location, on July 17, 2020 at 8:30 a.m. Eastern Time. We have adopted a virtual format for the E*TRADE special meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We designed the format of the E*TRADE special meeting to ensure that our stockholders who attend the E*TRADE special meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You are entitled to attend and participate in the E*TRADE special meeting only if you were a stockholder of record as of the close on June 10, 2020, the record date for the E*TRADE special meeting, or hold a valid proxy of such a stockholder for the E*TRADE special meeting. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. Please note that you will not be able to attend the virtual E*TRADE special meeting in person.

Q: Who can vote at the E*TRADE special meeting?

A:All holders of shares of E*TRADE common stock who hold such shares of record at the close of business on June 10, 2020, the record date for the E*TRADE special meeting, are entitled to receive notice of and to vote at the E*TRADE special meeting.

Q: How many votes may I cast?

A:Each outstanding share of E*TRADE common stock entitles its holder of record to one vote on each matter considered at the E*TRADE special meeting. Only E*TRADE stockholders who held shares of common stock of E*TRADE of record at the close of business on June 10, 2020 are entitled to vote at the E*TRADE special meeting and any adjournment or postponement of the E*TRADE special meeting.

Q: What is the record date in connection with the E*TRADE special meeting?

A:The record date for the determination of holders of E*TRADE common stock entitled to notice of and to vote at the E*TRADE special meeting is June 10, 2020.

Q: What constitutes a quorum at the E*TRADE special meeting?

A:A quorum is necessary to conduct business at the E*TRADE special meeting. A quorum requires the presence at the E*TRADE special meeting, by attending the E*TRADE special meeting via the E*TRADE meeting website or being represented by proxy, of a majority of the outstanding shares of E*TRADE common stock entitled to vote on each matter considered at the E*TRADE special meeting.

Q: What do I need to do now?

A:After you have carefully read and considered the information contained in or incorporated by reference into this proxy statement/prospectus, please submit your proxy via the Internet or by telephone in accordance with the instructions set forth on the enclosed proxy card, or complete, sign, date and return the enclosed proxy card in the postage-prepaid envelope provided as soon as possible so that your shares will be represented and voted at the E*TRADE special meeting.

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Additional information on voting procedures can be found under “The E*TRADE Special Meeting” beginning on page 48 of this proxy statement/prospectus.

Q: How will my proxy be voted?

A:If you submit your proxy via the Internet, by telephone or by completing, signing, dating and returning the enclosed proxy card, your proxy will be voted in accordance with your instructions.

Additional information on voting procedures can be found under “The E*TRADE Special Meeting” beginning on page 48 of this proxy statement/prospectus.

Q: Who will count the votes?

A:The votes at the E*TRADE special meeting will be counted by an independent inspector of election.

Q: How do I vote my shares if I am a stockholder of record?

A:If you are a stockholder of record of E*TRADE common stock at the close of business on June 10, 2020, you may vote your shares in any one of the following ways:

If you are a beneficial holder of E*TRADE common stock, you are also invited to attend the E*TRADE special meeting. However, because you are not a stockholder of record, you may not vote your shares at the E*TRADE special meeting unless you receive a voting instruction form with a 16-digit control number from your bank, broker or other nominee that is the stockholder of record with respect to your shares of E*TRADE common stock.

Q: How can I attend the E*TRADE special meeting?

A:The E*TRADE special meeting will be held exclusively via the Internet. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. If you do not have a control number, please contact your broker, bank or other nominee as soon as possible so that you can be provided with a control number and gain access to the meeting.

An online pre-meeting forum will be available to E*TRADE stockholders at www.proxyvote.com prior to the date of the E*TRADE special meeting. By accessing this online forum using the 16-digit control number found on such stockholder's proxy card or voting instruction form, E*TRADE stockholders will be able to vote, view the E*TRADE special meeting procedures, submit questions and obtain copies of proxy materials.

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Q: How can I submit a question at the E*TRADE special meeting?

A:E*TRADE stockholders may submit questions in advance of the E*TRADE special meeting by visiting www.proxyvote.com and accessing the online pre-meeting forum using the 16-digit control number found on such stockholder's proxy card or voting instruction form. Stockholders may also submit questions during the E*TRADE special meeting. As part of the E*TRADE special meeting, we will hold a live question and answer session during which we intend to answer questions submitted in advance of and during the meeting in accordance with the special meeting procedures which are pertinent to E*TRADE and the meeting matters, as time permits. Questions may be submitted during the special meeting through www.virtualshareholdermeeting.com/ETFC2020SM. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.

Q: What if I need technical assistance?

A:We encourage you to access the E*TRADE special meeting before it begins. Online check-in will start shortly before the meeting on July 17, 2020. If you encounter any difficulties accessing the meeting during the check-in or meeting time, please call 1-800-586-1548 (toll free) or 1-303-562-9288 (international).

Q: How can I vote during the E*TRADE special meeting?

A:All stockholders of record may vote online during the E*TRADE special meeting. Street name holders may vote online during the E*TRADE special meeting if they have a voting instruction form with a 16-digit control number, as described below. You may cast your vote electronically during the E*TRADE special meeting using the 16-digit control number found on your proxy card or voting instruction form. If you do not have a control number, please contact your broker, bank or other nominee as soon as possible so that you can be provided with a control number.

Whether you plan to attend the E*TRADE special meeting or not, we encourage you to vote by proxy as soon as possible.

Q: What should I do if I receive more than one set of voting materials for the E*TRADE special meeting?

A:You may receive more than one set of voting materials for the E*TRADE special meeting, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold your shares of E*TRADE common stock in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold shares. If you are a holder of record of E*TRADE common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please submit each separate proxy or voting instruction form that you receive by following the instructions set forth in each separate proxy or voting instruction form.

Q: What’s the difference between holding shares as a stockholder of record and holding shares as a beneficial owner?

A:If your shares of E*TRADE common stock are registered directly in your name with E*TRADE’s transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, to be the stockholder of record. If you are a stockholder of record, then this proxy statement/prospectus and your proxy card have been sent directly to you by E*TRADE.

If your shares of E*TRADE common stock are held through a bank, broker or other nominee, you are considered the beneficial owner of shares of E*TRADE common stock held in “street name.” In that case, this proxy statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee how to vote your shares by following their instructions for voting and you are also invited to attend the E*TRADE special meeting. But, because you are not the stockholder of record, you may not vote your shares at the E*TRADE special meeting unless you receive a voting instruction form with a 16-digit control number from your bank, broker or other nominee.

Q: If my shares are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote my shares for me?

A:No. If your shares are held in the name of a broker, bank or other nominee, you will receive separate instructions from your broker, bank or other nominee describing how to vote your shares. The availability of Internet or telephonic voting will depend on your broker’s, bank’s or other nominee’s voting process. Please check with your broker, bank or other nominee and follow the voting procedures provided by your broker, bank or other nominee on your voting instruction form.

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You should instruct your broker, bank or other nominee how to vote your shares. Under the rules applicable to broker-dealers, your broker, bank or other nominee has discretionary authority to vote on proposals that are considered routine but does not have discretionary authority to vote your shares on proposals that are considered non-routine, and each of the proposals to be voted on at the E*TRADE special meeting is considered non-routine. As a result, no broker will be permitted to vote your shares at the E*TRADE special meeting without receiving instructions from you. A so-called “broker non-vote” results when banks, brokers and other nominees return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares.

Therefore, if you are an E*TRADE stockholder whose shares of common stock are held in street name and you do not instruct your broker, bank or other nominee on how to vote your shares:

Additional information on voting procedures can be found under “The E*TRADE Special Meeting” beginning on page 48 of this proxy statement/prospectus.

Q: What do I do if I am an E*TRADE stockholder and I want to revoke my proxy?

A:Stockholders of record may revoke their proxies at any time before their shares of common stock are voted by proxy at the E*TRADE special meeting in any of the following ways:

Beneficial owners of E*TRADE common stock may change their voting instruction by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record or by following the instructions for voting set forth on the voting instruction form with a 16-digit control number provided by their brokers, banks or other nominees and voting at the E*TRADE special meeting.

Additional information can be found under “The E*TRADE Special Meeting” beginning on page 48 of this proxy statement/prospectus.

Q: What happens if I sell or otherwise transfer my shares of E*TRADE common stock before the E*TRADE special meeting?

A:The record date for holders of E*TRADE common stock entitled to vote at the E*TRADE special meeting is June 10, 2020, which is earlier than the date of the E*TRADE special meeting. If you sell or otherwise transfer your shares after the record date but before the E*TRADE special meeting, unless special arrangements (such as

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provision of a proxy) are made between you and the person to whom you transfer your shares and each of you notifies E*TRADE in writing of such special arrangements, you will retain your right to vote such shares at the E*TRADE special meeting but will otherwise transfer ownership of your shares of E*TRADE common stock.

Q: What happens if I sell or otherwise transfer my shares of E*TRADE common stock before the completion of the Merger?

A:Only holders of shares of E*TRADE common stock at the effective time will become entitled to receive the Common Merger Consideration. If you sell your shares of E*TRADE common stock prior to the completion of the Merger, you will not become entitled to receive the Common Merger Consideration by virtue of the Merger.

Q: Do any of the officers or directors of E*TRADE have interests in the Merger that may differ from or be in addition to my interests as an E*TRADE stockholder?

A:In considering the recommendation of the E*TRADE board of directors that E*TRADE stockholders vote to approve the merger agreement proposal, to approve the advisory compensation proposal and to approve the adjournment proposal, E*TRADE stockholders should be aware that some of E*TRADE’s directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of E*TRADE stockholders generally. These interests may include, among others:

The E*TRADE board of directors was aware of and considered these potential interests, among other matters, in evaluating and negotiating the merger agreement and the transactions contemplated thereby, in approving the Merger and in recommending the adoption of the merger agreement and the approval of the advisory compensation proposal and the adjournment proposal.

For more information and quantification of these interests, see “Interests of E*TRADE’s Directors and Executive Officers in the Merger” beginning on page 120 of this proxy statement/prospectus.

Q: Where can I find voting results of the E*TRADE special meeting?

A:E*TRADE intends to announce preliminary voting results at the E*TRADE special meeting and publish the final results in a Current Report on Form 8-K that will be filed with the SEC following the E*TRADE special meeting. All reports that E*TRADE and Morgan Stanley file with the SEC are publicly available when filed. See“Where You Can Find More Information” beginning on page 163 of thisproxy statement/prospectus.

Q: Do E*TRADE stockholders have dissenters’ or appraisal rights?

A:E*TRADE stockholders are not entitled to dissenters’or appraisal rights in connection with the Merger. See“The Merger—No Dissenters’or Appraisal Rights” beginning on page 91 of thisproxy statement/prospectus.

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Q: How can I find more information about Morgan Stanley and E*TRADE?

A:You can find more information about Morgan Stanley and E*TRADE from various sources described in“Where You Can Find More Information” beginning on page 163of this proxy statement/prospectus.

Q: Who can answer any questions I may have about the E*TRADE special meeting, the Merger or the transactions contemplated by the merger agreement?

A:If you have any questions about the E*TRADE special meeting, the Merger or the other transactions contemplated by the merger agreement or how to submit your proxy, or if you need additional copies of this proxy statement/prospectus or documents incorporated by reference herein, the enclosed proxy card or voting instructions, you should contact E*TRADE or E*TRADE’s proxy solicitor:

E*TRADE Financial Corporation
671 North Glebe Road, Ballston Tower
Arlington, VA 22203
Attention: Investor Relations
(646) 521-4340

or

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders May Call Toll-Free: (888) 750-5834
Banks & Brokers May Call Collect: (212) 750- 5833

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SUMMARY

This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. You are urged to read carefully the entire proxy statement/prospectus and the other documents referred to or incorporated by reference into this proxy statement/prospectus in order to fully understand the merger agreement and the Merger. See“Where You Can Find More Information” beginning on page 163 of thisproxy statement/prospectus. Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.

THE COMPANIES (SEE PAGE 47)

Morgan Stanley

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments-Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, 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. Unless the context otherwise requires, the terms“Morgan Stanley”or the“Firm”mean Morgan Stanley together with its consolidated subsidiaries.

A description of the clients and principal products and services of each of Morgan Stanley’s business segments is as follows:

Morgan Stanley’s significant regulated U.S. and international subsidiaries include:

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Morgan Stanley was originally incorporated under the laws of the State of Delaware on October 1, 1981, and its predecessor companies date back to 1924. Morgan Stanley common stock is traded on the NYSE under the symbol“MS.”

The principal executive offices of Morgan Stanley are located at 1585 Broadway, New York, New York 10036; its telephone number is (212) 761-4000; and its website is www.morganstanley.com.

Based on share ownership of Morgan Stanley that MUFG has disclosed in its filings with the SEC, as of March 23, 2020, MUFG beneficially owned approximately 24% of the outstanding shares of common stock of Morgan Stanley.

This proxy statement/prospectus incorporates important business and financial information about Morgan Stanley from other documents that are not included in or delivered with this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see“Where You Can Find More Information”beginning on page163 of thisproxy statement/prospectus.

E*TRADE Financial Corporation

E*TRADE and its subsidiaries provide financial services including brokerage and banking products and services to traders, investors, stock plan administrators and participants, and registered investment advisers (“RIAs”). Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a registered investment adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are federal savings banks (Members FDIC). Employee stock and student loan benefit plan solutions are offered by E*TRADE Financial Corporate Services, Inc.

E*TRADE common stock is traded on the Nasdaq under the symbol“ETFC.”Following the Merger, E*TRADE common stock will be delisted from the Nasdaq.

The principal executive offices of E*TRADE are located at 671 North Glebe Road, Ballston Tower, 15th Floor, Arlington, VA 22203-2120.

Additional information about E*TRADE and its subsidiaries are included in documents incorporated by reference into this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see“Where You Can Find More Information” beginning on page 163 of thisproxy statement/prospectus.

Moon-Eagle Merger Sub, Inc.

Merger Sub is a wholly owned subsidiary of Morgan Stanley. Merger Sub was formed solely for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

Merger Sub was incorporated in the State of Delaware on February 14, 2020. The principal executive offices of Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

Moon-Eagle Merger Sub II, LLC

Second Merger Sub is a wholly owned subsidiary of Morgan Stanley. Second Merger Sub was formed solely for the purpose of completing the Mergers. Second Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Mergers.

Second Merger Sub was incorporated in the State of Delaware on February 24, 2020. The principal executive offices of Second Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

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THE MERGER (SEE PAGE 56)

Morgan Stanley, Merger Sub and E*TRADE have entered into the merger agreement. Subject to the terms and conditions of the merger agreement and in accordance with applicable law, in the Merger, Merger Sub will be merged with and into E*TRADE, with E*TRADE continuing as the surviving corporation. Following completion of the Merger, E*TRADE will be a wholly owned subsidiary of Morgan Stanley. Immediately following the Merger, and as part of an integrated transaction with the Merger, in the Second Merger, E*TRADE will merge with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity. Following completion of the Second Merger, Second Merger Sub will be a wholly owned subsidiary of Morgan Stanley. In connection with the Merger, E*TRADE stock will be delisted from the Nasdaq and deregistered under the Exchange Act.

A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus.You should read the merger agreement carefully because it is the legal document that governs the Merger.

THE E*TRADE SPECIAL MEETING (SEE PAGE 48)

Date, Time and Place of the E*TRADE Special Meeting. Due to concerns regarding COVID-19 and to assist in protecting the health and well-being of our stockholders and employees, the E*TRADE special meeting will be held exclusively in a virtual format to provide a consistent experience to all stockholders regardless of location, on July 17, 2020 at 8:30 a.m. Eastern Time. We have adopted a virtual format for the E*TRADE special meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We designed the format of the E*TRADE special meeting to ensure that our stockholders who attend the E*TRADE special meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You are entitled to attend and participate in the E*TRADE special meeting only if you were a stockholder of record as of the close on June 10, 2020, the record date for the E*TRADE special meeting, or hold a valid proxy of such a stockholder for the E*TRADE special meeting. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. Please note that you will not be able to attend the virtual E*TRADE special meeting in person. At the E*TRADE special meeting, stockholders will be asked to consider and vote on the following:

Record Date. The record date for the determination of stockholders entitled to receive notice of and to vote at the E*TRADE special meeting is June 10, 2020. Only E*TRADE stockholders who held shares of common stock of E*TRADE of record at the close of business on June 10, 2020 are entitled to vote at the E*TRADE special meeting and any adjournment or postponement of the E*TRADE special meeting.

Outstanding Shares as of Record Date. As of the close of business on the record date, there were 221,089,284 shares of E*TRADEcommon stock outstanding, held by 574 holders of record.

Quorum. A quorum is necessary to conduct business at the E*TRADE special meeting. A quorum requires the presence at the E*TRADE special meeting, by attending the E*TRADE special meeting via the E*TRADE meeting website or being represented by proxy, of a majority of the outstanding shares of E*TRADE common stock entitled to vote on each matter considered at the E*TRADE special meeting. For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which will include proxies received but marked as abstentions and will exclude broker non-votes. Broker non-votes occur when a beneficial owner holding shares in “street name” does not instruct the broker, bank or other nominee that is the record owner of such stockholder’s shares on how to vote those shares on a particular proposal.

Required Vote. To adopt the merger agreement proposal, the affirmative vote, attending the E*TRADE special meeting via the E*TRADE meeting website or by proxy, of holders of a majority of the outstanding shares of E*TRADE common stock on the record date and entitled to vote thereon is required. The required vote on the merger agreement proposal is based on the number of outstanding shares—not the number of shares actually voted. The

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failure of any E*TRADE stockholder to submit a vote (i.e., by not submitting a proxy and not voting at the E*TRADE special meeting) and any abstention from voting by an E*TRADE stockholder will have the same effect as a vote against the merger agreement proposal.

To approve, on an advisory (non-binding) basis, the advisory compensation proposal, the affirmative vote of the majority of the voting power present via the E*TRADE meeting website or represented by proxy and entitled to vote on the advisory compensation proposal at the E*TRADE special meeting at which a quorum is present is required.

To approve the adjournment proposal, the affirmative vote of the majority of the voting power present at the E*TRADE special meeting via the E*TRADE meeting website or by proxy and entitled to vote on the adjournment proposal at the E*TRADE special meeting, whether or not a quorum is present, is required.

Share Ownership and Voting by E*TRADE’s Directors and Executive Officers. At the close of business on the record date for the E*TRADE special meeting, E*TRADE’s directors and executive officers had the right to vote approximately 496,280 shares of the then-outstanding E*TRADE common stock at the E*TRADE special meeting, collectively representing approximately less than 1% of the E*TRADE common stock outstanding and entitled to vote on that date. We currently expect that E*TRADE’s directors and executive officers will vote their shares“FOR”Proposal 1 (the merger agreement proposal),“FOR”Proposal 2 (the advisory compensation proposal) and“FOR”Proposal 3 (the adjournment proposal), although they have no obligation to do so.

WHAT E*TRADE STOCKHOLDERS WILL RECEIVE IN THE MERGER (SEE PAGE 95)

If the Merger is completed, E*TRADE stockholders will be entitled to receive, (i) in exchange for each share of E*TRADE common stock that they own immediately prior to the Merger (except for excluded shares, which will be cancelled without consideration), 1.0432 shares of Morgan Stanley common stock, and cash payable in lieu of any fractional shares as described below; (ii) in exchange for each share of E*TRADE’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (“E*TRADE Series A Preferred Stock”) or E*TRADE’s Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series B (“E*TRADE Series B Preferred Stock”) outstanding immediately prior to the effective time of the Merger (except for excluded shares, which will be cancelled without consideration), one share of a newly created series of Morgan Stanley’s Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M (all shares of such newly created series, the“New Morgan Stanley Replacement Series A Preferred Stock”) or a newly created series of Morgan Stanley’s Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series N (all shares of such newly created series, the“New Morgan Stanley Replacement Series B Preferred Stock”), as applicable, having the terms set forth in the merger agreement and described under“Description of Morgan Stanley Capital Stock—New Morgan Stanley Preferred Stock to Be Issued in the Merger”beginningon page 134of this proxy statement/prospectus.

No fractional shares of Morgan Stanley stock will be issued to any holder of shares of E*TRADE stock upon completion of the Merger. Instead, all fractional shares of Morgan Stanley stock that a holder of shares of E*TRADE stock would otherwise be entitled to receive as a result of the Merger will be aggregated and, if a fractional share results from such aggregation, such holder will be entitled to receive, in lieu of such fractional share, an amount in cash determined by multiplying the fraction of the applicable share of Morgan Stanley stock to which such holder would otherwise have been entitled by the closing price of such applicable share of Morgan Stanley stock on the NYSE on the last trading day preceding the date of completion of Merger. No interest will be paid or accrued on cash payable in lieu of fractional shares of Morgan Stanley stock.

Example: If you own 100 shares of E*TRADE common stock at the time the Merger is completed, you will be entitled to receive 104 shares of Morgan Stanley common stock. In addition, you will be entitled to receive an amount of cash equal to 0.32 of a share of Morgan Stanley common stock multiplied by the closing price of such applicable share of Morgan Stanley stock on the NYSE on the last trading day preceding the date of completion of Merger.

The ratio of 1.0432 shares of Morgan Stanley common stock for each share of E*TRADE common stock (the“exchange ratio”) is fixed, which means that it will not change between now and the date of the Merger, regardless of whether the market price of shares of either Morgan Stanley common stock or E*TRADE common stock changes. Therefore, the value of the Common Merger Consideration will depend on the Morgan Stanley closing price at the time E*TRADE stockholders receive shares of Morgan Stanley common stock in connection with the Merger. Based on the closing price of a share of Morgan Stanley common stock on the NYSE of $56.31 on February 19, 2020,

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the last trading day prior to public announcement of the Merger by Morgan Stanley and E*TRADE, the Common Merger Consideration represented approximately $58.74 in implied value for each share of E*TRADE common stock. Based on the closing price of a share of Morgan Stanley common stock on the NYSE of $48.69 on June 10, 2020, the most recent practicable trading day prior to the date of this proxy statement/prospectus, the Common Merger Consideration represented approximately $50.79 inimplied value for each share of E*TRADE common stock.Because Morgan Stanley will issue a fixed number of Morgan Stanley common shares in exchange for each share of E*TRADE common stock, the value of the Common Merger Consideration that E*TRADE stockholders will receive in the Merger will depend on the market price of Morgan Stanley common stock at the time the Merger is completed. The market price of Morgan Stanley common stock when E*TRADE stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of shares of Morgan Stanley common stock on the date of this proxy statement/prospectus or at the time of the E*TRADE special meeting.

NO DISSENTERS’ OR APPRAISAL RIGHTS (SEE PAGE 91)

E*TRADE stockholders are not entitled to dissenters’ or appraisal rights in connection with the Merger.

TREATMENT OF E*TRADE EQUITY AWARDS (SEE PAGE 97)

Upon the completion of the Merger, each outstanding E*TRADE restricted stock unit award that is eligible to vest solely based on continued service (“E*TRADE RSU Award”), restricted stock unit award that is eligible to vest based on the achievement of performance goals (“E*TRADE PSU Award”), restricted stock award made to directors of E*TRADE (“E*TRADE Restricted Stock Award”) and deferred restricted stock unit award made to directors of E*TRADE (“E*TRADE Director Deferred RSU Award”) will vest (if unvested) and be cancelled and converted into the right to receive the Common Merger Consideration as if such award (including any shares of E*TRADE common stock in respect of dividend equivalent units credited thereon) had been settled in shares of E*TRADE common stock immediately prior to the effective time. In the case of E*TRADE RSU Awards that are eligible to vest based on the achievement of performance goals, (i) with respect to any performance periods that are completed on or before the effective time, each such award will vest at the greater of the target or actual level of performance, as determined by the board of directors of E*TRADE or a committee thereof prior to the effective time and (ii) with respect to any performance periods that are not completed on or before the effective time, each such award will vest at the target level of performance. Additionally, in the event the Merger has not been completed by January 1, 2021 and E*TRADE grants additional equity awards after such date and prior to the completion of the Merger in accordance with the merger agreement, upon the completion of the Merger such additional equity awards will not vest but will instead be converted into equivalent equity awards of Morgan Stanley (taking into account the exchange ratio) on the same terms and conditions (including applicable vesting provisions) as applicable to each such equity award immediately prior to completion of the Merger.

RECOMMENDATION OF THE E*TRADE BOARD OF DIRECTORS (SEE PAGE 64)

The E*TRADE board of directors unanimously recommends that E*TRADE stockholders vote “FOR” the merger agreement proposal, “FOR” the advisory compensation proposal and “FOR” the adjournment proposal.

In the course of reaching its decision for E*TRADE to enter into the merger agreement and effect the Merger, the E*TRADE board of directors considered a number of factors in its deliberations. For a more complete discussion of these factors, see “The Merger—E*TRADE’s Reasons for the Merger; Recommendation of the E*TRADE Board of Directors” beginning on page 64 of this proxy statement/prospectus.

OPINIONS OF E*TRADE’S FINANCIAL ADVISORS (SEE PAGE 73)

Opinion of J.P. Morgan Securities LLC

Pursuant to an engagement letter between E*TRADE and J.P. Morgan Securities LLC (“J.P. Morgan”), E*TRADE retained J.P. Morgan as its financial advisor in connection with the proposed Merger.

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At a meeting of the E*TRADE board of directors held on February 19, 2020, J.P. Morgan rendered its oral opinion to the E*TRADE board of directors, subsequently confirmed by delivery of J.P. Morgan’s written opinion to the E*TRADE board of directors, dated February 19, 2020, that, as of such date, and based upon and subject to the factors and assumptions set forth in its written opinion, the exchange ratio in the proposed Merger was fair, from a financial point of view, to holders of E*TRADE common stock.

The full text of the written opinion of J.P. Morgan, dated February 19, 2020, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/ prospectus is qualified in its entirety by reference to the full text of such opinion. E*TRADE’s stockholders are urged to read the written opinion in its entirety. J.P. Morgan’s written opinion was addressed to the E*TRADE board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the exchange ratio in the proposed Merger, was directed only to the exchange ratio in the proposed Merger and did not address any other aspect of the proposed Merger. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed Merger to the holders of any other class of securities, creditors or other constituencies of E*TRADE, or as to the underlying decision by E*TRADE to engage in the proposed Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any holder of shares of E*TRADE common stock as to how such stockholder should vote with respect to the proposed Merger or any other matter.

For more information, see “The Merger—Opinions of E*TRADE’s Financial Advisors—Opinion of J.P. Morgan Securities LLC” beginning on page 73 of this proxy statement/prospectus and Annex B to this proxy statement/prospectus.

Opinion of Ardea Partners LP

Pursuant to an engagement letter between E*TRADE and Ardea Partners LP (“Ardea”), E*TRADE retained Ardea as its financial advisor in connection with the proposed Merger.

At a meeting of the E*TRADE board of directors held on February 19, 2020, representatives of Ardea rendered to the E*TRADE board of directors Ardea’s oral opinion, subsequently confirmed in a written opinion dated February 20, 2020 and delivered to the E*TRADE board of directors, to the effect that, as of the date of Ardea’s written opinion, and based upon and subject to the factors and assumptions set forth in Ardea’s written opinion, the exchange ratio set forth in the merger agreement was fair from a financial point of view to the holders of shares of E*TRADE common stock.

The full text of the written opinion of Ardea, dated February 20, 2020, which sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken in connection with the opinion, is attached to this proxy statement/prospectus as Annex C. The summary of the Ardea opinion contained in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Ardea’s written opinion. Ardea’s advisory services and opinion were provided for the information and assistance of the E*TRADE board of directors in connection with its consideration of the proposed Merger and Ardea’s opinion does not constitute a recommendation as to how any holder of shares of E*TRADE common stock should vote with respect to the proposed Merger or any other matter.

For more information, see “The Merger—Opinions of E*TRADE’s Financial Advisors—Opinion of Ardea Partners LP” beginning on page 82 of this proxy statement/prospectus and Annex C to this proxy statement/prospectus.

OWNERSHIP OF SHARES OF MORGAN STANLEY COMMON STOCK AFTER THE MERGER

Based on the number of shares of E*TRADE common stock and the E*TRADE equity awards outstanding as of the E*TRADE record date for the E*TRADE special meeting, Morgan Stanley estimates that it will issueapproximately 233,013,148 shares of Morgan Stanley common stock pursuant to the merger agreement, provided that Morgan Stanley may be required to reserve additional shares of Morgan Stanley common stock for issuance if the Merger is not completed as of January 1, 2021 and certain E*TRADE equity awards are required to be converted into equity awards of Morgan Stanley pursuant to the merger agreement. The actual number of shares of Morgan Stanley common stock to be issued and reserved for issuance in connection with the Merger will be determined at

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completion of the Merger based on the exchange ratio and the number of shares of E*TRADE common stock and the E*TRADE equity awards outstanding at that time. Based upon the estimated number of shares of common stock as well as the outstanding equity awards of the parties that are expected to be outstanding immediately prior to the consummation of the Merger, we estimate that, as of immediately following completion of the Merger, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 87% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 13% of the outstanding shares of Morgan Stanley common stock (or, on a fully diluted basis, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 88% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 12% of the shares of Morgan Stanley common stock).

INTERESTS OF E*TRADE’S DIRECTORS AND EXECUTIVE OFFICERS IN THE MERGER (SEE PAGE 120)

Non-employee directors and executive officers of E*TRADE have certain interests in the Merger that may be different from or in addition to the interests of E*TRADE stockholders generally. These interests include, among others, the accelerated vesting of outstanding equity awards pursuant to the merger agreement, potential severance benefits and other payments and rights to ongoing indemnification and insurance coverage. The E*TRADE board of directors was aware of and considered those interests, among other matters, in reaching its unanimous decisions to (i) approve the Merger and the other transactions contemplated by the merger agreement, (ii) declare the merger agreement and the transactions contemplated by the merger agreement as advisable and fair to, and in the best interests of, E*TRADE and E*TRADE’s stockholders, and (iii) resolve to recommend the approval and adoption of the merger agreement to E*TRADE stockholders. See “Interests of E*TRADE’s Directors and Executive Officers in the Merger” beginning on page 120 of this proxy statement/prospectus for a more detailed description of these interests.

LISTING OF SHARES OF MORGAN STANLEY COMMON STOCK AND DELISTING AND DEREGISTRATION OF E*TRADE COMMON STOCK (SEE PAGE 92)

Application will be made to have the shares of Morgan Stanley common stock to be issued in the Merger approved for listing on the NYSE, where shares of Morgan Stanley common stock are currently traded. If the Merger is completed, shares of E*TRADE stock will no longer be listed on the Nasdaq and will be deregistered under the Exchange Act.

COMPLETION OF THE MERGER IS SUBJECT TO CERTAIN CONDITIONS (SEE PAGE 98)

As more fully described in this proxy statement/prospectus and in the merger agreement, the obligation of each of Morgan Stanley, E*TRADE and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver (provided that the condition in the first bullet below may not be waived)) of a number of conditions, including the following:

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Morgan Stanley and E*TRADE cannot be certain when, or if, the conditions to the Merger will be satisfied (or, to the extent permitted by law, waived), or that the Merger will be completed.

THE MERGER MAY NOT BE COMPLETED WITHOUT ALL REQUIRED REGULATORY APPROVALS (SEE PAGE 88)

Completion of the Merger is conditioned upon the receipt of certain governmental clearances or approvals, including, but not limited to, the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act and certain other governmental consents and approvals.

The process for obtaining the requisite regulatory approvals for the Merger is ongoing.

Under the HSR Act, certain transactions, including the Merger, may not be completed unless certain waiting period requirements have expired or been terminated. The HSR Act provides that each party must file a pre-merger notification (the “HSR notifications”) with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the Department of Justice (the “DOJ”). A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-day waiting period following the parties’ filings of their respective HSR notifications or the termination of that waiting period. If the DOJ or FTC issues a Request for Additional Information and Documentary Material (a “second request”) prior to the expiration of this initial 30-day waiting period, the transaction cannot close until the parties observe a second 30-day waiting period, which would begin to run only after both parties have substantially complied with the second request, unless such second waiting period is terminated earlier. The parties’ HSR notifications were filed with the FTC and the DOJ on March 11, 2020, and the waiting period with respect to such HSR notifications expired on April 10, 2020 at 11:59 p.m. Eastern Time.

Completion of the Merger is further conditioned on, among other things, (i) receipt of required approvals, if any, by the Board of the Governors of the Federal Reserve System (the “Federal Reserve Board”) under Sections 4(j) and 4(k)(6)(B)(ii) of the Bank Holding Company Act (the “BHC Act”) and Section 163(b) of Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and by the Office of the Comptroller of the Currency (the “OCC”) under the Change in Bank Control Act (the “CIBC Act”), (ii) submission by E*TRADE Securities LLC of an application pursuant to FINRA Rule 1017 seeking FINRA’s approval of the change of ownership or control of E*TRADE Securities LLC and FINRA’s approval thereof (which approval was granted by FINRA on June 4, 2020), (iii) submission by E*TRADE Securities LLC and other applicable E*TRADE entities to the Depository Trust & Clearing Corporation (“DTCC”), on behalf of each of the Depository Trust Company (“DTC”), the National Securities Clearing Corporation (“NSCC”) and the Fixed Income Clearing Corporation (“FICC”), of

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written notification regarding the change of ownership and control of E*TRADE Securities LLC and such other applicable E*TRADE entities contemplated by the merger agreement and the transactions thereunder consistent with the requirements of the rules of each of DTC, NSCC and FICC, (iv) at least 30 days prior to the completion of the Merger, submission by E*TRADE Securities LLC and E*TRADE Futures LLC of written notification regarding the change of ownership and control of each such entity to any self-regulatory organization of which it is a member and to each state or other U.S. jurisdiction in which it is registered to act as a broker-dealer and (v) receipt of any other necessary consents, approvals or clearances that are required under applicable law in order to consummate the transactions contemplated by the merger agreement from any governmental authority in any jurisdiction in which Morgan Stanley or E*TRADE (together with their respective subsidiaries) conduct material operations.

Morgan Stanley and E*TRADE have agreed in the merger agreement to use their respective reasonable best efforts, subject to certain limitations, to make the required governmental filings or obtain the required governmental authorizations, as the case may be. However, Morgan Stanley’s obligation to use reasonable best efforts to obtain regulatory approvals required to complete the Merger does not require Morgan Stanley to:

With respect to each of the two bullets above, the merger agreement further provides that Morgan Stanley is only required to take the applicable action with respect to the wealth management business of Morgan Stanley, E*TRADE and their respective subsidiaries if such action (A) does not relate to any share plan administration or corporate services business (including Morgan Stanley’s “Shareworks by Morgan Stanley” business) and (B) would not otherwise reasonably be expected to materially and adversely affect the combined wealth management businesses of Morgan Stanley and its subsidiaries (including the Surviving Corporation), taken as a whole (after giving effect to the Merger).

In addition, Morgan Stanley’s obligation to use reasonable best efforts to obtain regulatory approvals required to complete the Merger includes an obligation to use reasonable best efforts to defend against litigation commenced by any governmental authority challenging the transactions contemplated by the merger agreement, but does not require Morgan Stanley to commence any litigation against any governmental authority.

These requirements are described in more detail under “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 109 of this proxy statement/prospectus.

The regulatory approvals required for completion of the Merger are further described under “The Merger—Regulatory Approvals Required for the Merger” beginning on page 88 of this proxy statement/prospectus.

NO SOLICITATION BY E*TRADE (SEE PAGE 106)

As more fully described in this proxy statement/prospectus and in the merger agreement, and subject to the exceptions described below, E*TRADE has agreed not to, and to cause its subsidiaries and its and its subsidiaries’ representatives not to, directly or indirectly, among other things: (i) solicit, initiate or take any action to knowingly facilitate or knowingly encourage the submission of any Company Acquisition Proposal (as defined under “The Merger Agreement—No Solicitation” beginning on page 106 of this proxy statement/prospectus), (ii) enter into or participate in any discussions or negotiations regarding any such proposal, (iii) furnish any nonpublic information relating to E*TRADE or any of its subsidiaries to, otherwise knowingly cooperate in any way with, or knowingly assist, participate in, facilitate or knowingly encourage any effort by, any third party that E*TRADE knows, or should reasonably be expected to know, is seeking to make, or has made, a Company Acquisition Proposal, (iv) except as described below, (x) fail to make, or withdraw or qualify, amend or modify in a manner adverse to Morgan

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Stanley the recommendation of E*TRADE’s board of directors that E*TRADE’s stockholders vote in favor of the approval and adoption of the merger agreement, (y) fail to make, or to include in this proxy statement/prospectus, the recommendation of E*TRADE’s board of directors that E*TRADE’s stockholders vote in favor of the approval and adoption of the merger agreement, as applicable or (z) recommend, adopt or approve a Company Acquisition Proposal, (v) take any action to make any Delaware anti-takeover laws inapplicable to any third party or Company Acquisition Proposal or (vi) fail to enforce or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of E*TRADE or any of its subsidiaries. The merger agreement provides that any breach (or willful breach, as applicable) of the foregoing obligations by E*TRADE’s subsidiaries or E*TRADE’s or its subsidiaries’ representatives shall be deemed to be a breach (or willful breach, as applicable) of such obligations by E*TRADE.

Notwithstanding the foregoing, if at any time prior to the approval and adoption of the merger agreement by E*TRADE stockholders, the board of directors of E*TRADE receives abona fidewritten Company Acquisition Proposal made after the date of the merger agreement that has not resulted from a violation of the solicitation restrictions described in the first paragraph of this section (“Summary—No Solicitation by E*TRADE” beginning on page 24 of this proxy statement/prospectus), the board of directors of E*TRADE is permitted to, subject to certain exceptions and qualifications described in the merger agreement:

E*TRADE is only permitted to take the actions described in the two bullets above if the E*TRADE board of directors determines in good faith by majority vote, after consultation with E*TRADE’s outside legal counsel and a financial advisor of nationally recognized reputation, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law.

In addition, the E*TRADE board of directors is not permitted to take any of the actions described in the first bullet above, other than interacting with the person or entity who made a Company Acquisition Proposal and such person’s representatives solely to clarify the terms and conditions of such Company Acquisition Proposal, unless E*TRADE has delivered to Morgan Stanley written notice advising Morgan Stanley that it intends to take such action. E*TRADE must also notify Morgan Stanley promptly (but in no event later than 24 hours) after receipt by E*TRADE (or any of its representatives) of any Company Acquisition Proposal or any written request for information relating to E*TRADE or any of its subsidiaries or for access to the business, properties, assets, books or records of E*TRADE or any of its subsidiaries by any third party that to the knowledge of E*TRADE or any member of its board of directors, is considering making, is reasonably likely to make or has made a Company Acquisition Proposal. E*TRADE must also keep Morgan Stanley reasonably informed, on a reasonably current basis, of the status and

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details of any Company Acquisition Proposal (including any changes thereto) and must promptly (but in no event later than 24 hours after receipt) provide to Morgan Stanley copies of all material correspondence and written materials sent or provided to E*TRADE or any of its affiliates that describes any material terms or conditions of any Company Acquisition Proposal (as well as written summaries of any material oral communications addressing such matters).

In addition, the E*TRADE board of directors is not permitted to make a Company Adverse Recommendation Change and/or effect a Company Superior Proposal Termination (as defined under “The Merger Agreement—No Solicitation” beginning on page 106 of this proxy statement/prospectus) in response to a Company Superior Proposal unless (i) E*TRADE promptly notifies Morgan Stanley, in writing at least four business days before taking that action, that it intends to take that action, attaching the most current version of any proposed agreement (or a reasonably detailed summary of all material terms thereof) and the identity of the third party making such Company Superior Proposal, (ii) if requested by Morgan Stanley, E*TRADE negotiates in good faith with Morgan Stanley during such four business day period regarding any proposal to amend the terms of the merger agreement, and (iii) after such four business day period, the E*TRADE board of directors, after discussions with E*TRADE’s outside legal counsel and financial advisor, determines in good faith by majority vote, taking into account any proposal by Morgan Stanley to amend the terms of the merger agreement, that such Company Acquisition Proposal continues to constitute a Company Superior Proposal.

In addition, the E*TRADE board of directors is not permitted to make a Company Adverse Recommendation Change involving or related to a Company Intervening Event unless (i) E*TRADE has provided Morgan Stanley at least five business days prior written notice (which notice will set forth in reasonable detail a description of the Company Intervening Event and the rationale for the Company Adverse Recommendation Change) of its intention to make a Company Adverse Recommendation Change with respect to such intervening event, (ii) if requested by Morgan Stanley, E*TRADE negotiates in good faith with Morgan Stanley during such five business day period regarding any proposal to amend the terms of the merger agreement, and (iii) after such five business day period, the E*TRADE board of directors determines in good faith by majority vote, after consultation with its outside legal counsel and financial advisor, that the failure to make a Company Adverse Recommendation Change involving or related to such Company Intervening Event would be reasonably likely to be inconsistent with the board of directors’ fiduciary duties under applicable law.

TERMINATION OF THE MERGER AGREEMENT (SEE PAGE 114)

The merger agreement may be terminated at any time before the completion of the Merger, whether before or after E*TRADE stockholders have approved and adopted the merger agreement, in any of the following ways:

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If the merger agreement is validly terminated, the merger agreement will become void and of no effect without liability of any party to the merger agreement (or any stockholder, director, officer, employee, agent, consultant or representative of any party to the merger agreement) to the other parties, except that certain specified provisions will survive termination. However, neither Morgan Stanley nor E*TRADE will be relieved or released from any liabilities or damages arising out of any (i) fraud by such party, (ii) willful breach by such party of any representation or warranty on the part of such party set forth in the merger agreement or (iii) the willful breach by such party of any covenant or agreement binding on such party set forth in the merger agreement.

In the event of a termination of the merger agreement under certain circumstances specified in the merger agreement, E*TRADE may be required to pay a termination fee of $375 million to Morgan Stanley or Morgan Stanley may be required to pay a reverse termination fee of $525 million to E*TRADE. E*TRADE would be required to pay to Morgan Stanley a termination fee of $375 million if the merger agreement is terminated (x) by Morgan Stanley prior to receipt of E*TRADE stockholder approval as a result of a Company Adverse Recommendation Change, (y) by Morgan Stanley due to E*TRADE’s willful breach in any material respect of the provisions of the merger agreement relating to non-solicitation of alternative transactions or convening the E*TRADE special meeting as described above or (z) by Morgan Stanley pursuant to any other termination right of Morgan Stanley described above at a time when the merger agreement was otherwise terminable under clause (x) or (y) above. In addition, E*TRADE would be required to pay to Morgan Stanley a termination fee of $375 million if (x) (i) Morgan Stanley or E*TRADE terminates the merger agreement on the basis that the Merger has not been completed on or prior to the initial end date or the extended end date, as applicable (without E*TRADE stockholder approval of the Merger having been obtained at the time of termination), (ii) Morgan Stanley or E*TRADE terminates the merger agreement because the E*TRADE stockholder approval of the Merger has not been obtained or (iii) Morgan Stanley terminates the merger agreement on the basis of an uncured or incurable breach of representation or warranty, or failure to perform a required covenant, by E*TRADE (if E*TRADE stockholder approval of the Merger has been obtained at the time

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of the termination, only as a result of a willful breach by E*TRADE), (y) at or prior to the time of termination, a Company Acquisition Proposal was publicly proposed or announced (in each case, and not publicly withdrawn) or made known to management or the board of directors or E*TRADE by a third party (in each case, and not publicly withdrawn), or any third party had publicly announced (in each case, and not publicly withdrawn) an intention to make a Company Acquisition Proposal, and (z) within twelve months after such termination, E*TRADE enters into a definitive agreement providing for, or completes, a Company Acquisition Proposal. Furthermore, E*TRADE would be required to pay to Morgan Stanley a termination fee of $375 million if the merger agreement is terminated by E*TRADE prior to E*TRADE stockholder’s approval of the Merger in order to enter into an alternative acquisition agreement with respect to a Company Superior Proposal as described under “The Merger Agreement—No Solicitation” beginning on page 106 of this proxy statement/prospectus.

Morgan Stanley would be required to pay to E*TRADE a reverse termination fee of $525 million if the merger agreement is terminated by Morgan Stanley or E*TRADE (as applicable) (x) on the basis that the Merger has not been completed on or prior to the initial end date or the extended end date, as applicable, or that any applicable antitrust law enjoins, prevents or prohibits the consummation of the Merger, in each case at a time when one or more of conditions to the completion of the Merger related to regulatory approvals, as described under “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 98 of this proxy statement/prospectus, are not satisfied or waived solely as a result of an applicable antitrust law or (y) on the basis of a final and non-appealable denial of necessary governmental consent solely as a result of an applicable antitrust law and, in the case of each of (x) and (y), at the time of such termination, all of the mutual conditions to the completion of the Merger and additional conditions to the completion of the Merger for the benefit of Morgan Stanley and Merger Sub have otherwise been satisfied or waived (other than those conditions (I) that by their nature are to be satisfied at the completion of the Merger, which would have been satisfied at the completion of the Merger had the completion occurred at the time of such termination, or (II) that have not been satisfied as a result of a breach of the merger agreement by Morgan Stanley or Merger Sub that was the proximate cause of such condition not having been satisfied).

SPECIFIC PERFORMANCE; REMEDIES (SEE PAGE 116)

Under the merger agreement, each of Morgan Stanley and E*TRADE is entitled to an injunction to prevent breaches of the merger agreement or to enforce specifically the terms and provisions of the merger agreement, in addition to any other remedy to which that party may be entitled at law or in equity.

U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE MERGERS (SEE PAGE 117)

For U.S. federal income tax purposes, the Mergers, taken together, are intended to constitute a single integrated transaction that qualifies as a “reorganization” within the meaning of section 368(a) of the Code, and each of E*TRADE and Morgan Stanley expects to receive a tax opinion from its counsel, Skadden and Davis Polk, respectively, to the effect that, for U.S. federal income tax purposes, the Mergers will constitute a reorganization within the meaning of section 368(a) of the Code. These opinions of counsel will be based on customary assumptions and representations, covenants, and undertakings of E*TRADE, Morgan Stanley, Merger Sub and Second Merger Sub. If any of the assumptions, representations, covenants or undertakings is incorrect, incomplete, inaccurate, or is violated, the validity of the opinions may be affected and the U.S. federal income tax consequences of the Mergers could differ materially from those described in this proxy statement/prospectus. The obligation of each of E*TRADE and Morgan Stanley to consummate the Mergers, however, is not conditioned upon the receipt of such opinions of Skadden, Davis Polk or any other counsel, nor will the parties request a ruling from the IRS regarding the qualification of the Mergers as a reorganization within the meaning of section 368(a) of the Code. Assuming that the Mergers qualify as a reorganization within the meaning of section 368(a) of the Code, holders of E*TRADE stock will generally not recognize gain or loss for U.S. federal income tax purposes, except with respect to cash received in lieu of fractional shares of Morgan Stanley common stock.

The U.S. federal income tax consequences described above may not apply to all holders of E*TRADE stock. You should read “U.S. Federal Income Tax Considerations” beginning on page 117 of this proxy statement/prospectus for a more complete discussion of the U.S. federal income tax considerations relating to the Mergers. Tax matters can be complicated and the tax consequences of the Mergers to you will depend on your particular tax situation. You should consult your tax advisor to determine the tax consequences of the Mergers to you.

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ACCOUNTING TREATMENT (SEE PAGE 92)

Morgan Stanley prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The Merger will be accounted for using the acquisition method of accounting. Morgan Stanley will be treated as the acquirer for accounting purposes.

RIGHTS OF E*TRADE STOCKHOLDERS WILL CHANGE AS A RESULT OF THE MERGER (SEE PAGE 139)

E*TRADE stockholders, whose rights are currently governed by E*TRADE’s amended and restated certificate of incorporation (the “E*TRADE certificate of incorporation”), E*TRADE’s amended and restated bylaws (the “E*TRADE bylaws”), and Delaware law, will upon completion of the Merger become stockholders of Morgan Stanley and their rights will be governed by Morgan Stanley’s amended and restated certificate of incorporation (the “Morgan Stanley certificate of incorporation”), Morgan Stanley’s amended and restated bylaws (the “Morgan Stanley bylaws”) and Delaware law. As a result, E*TRADE stockholders will have different rights once they become Morgan Stanley stockholders due to differences between the governing documents of E*TRADE and Morgan Stanley. These differences are described in detail in “Comparison of Stockholder Rights” beginning on page 139 of this proxy statement/prospectus.

LITIGATION RELATING TO THE MERGER (SEE PAGE 92)

As of June 12, 2020, nine complaints had been filed by purported E*TRADE stockholders challenging the Merger. The first, filed in the United States District Court for the Southern District of New York by Shiva Stein individually, is captionedStein v. E*TRADE Financial Corporation et al., case number 1:20-cv-03134-LAP.Stein v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The second complaint, a putative class action complaint, was filed in the United States District Court for the District of Delaware by John Thompson and is captionedThompson v. E*TRADE Financial Corporation et al., case number 1:20-cv-00553-RGA.Thompson v. E*TRADE Financial Corporation et al. names as defendants Morgan Stanley, Merger Sub, E*TRADE and each member of the E*TRADE board of directors. The third complaint, filed in the United States District Court for the District of New Jersey by Jacqueline Galeano individually, is captionedGaleano v. E*TRADE Financial Corporation et al., case number 2:20-cv-05123-KM-ESK.Galeano v. E*TRADE Financial Corporation et al.names as defendants E*TRADE and each member of the E*TRADE board of directors. The fourth complaint, a putative class action complaint, was filed in the United States District Court for the Southern District of New York by Kevin Brown and is captionedBrown v. E*TRADE Financial Corporation et al., case number 1:20-cv-03322-LAP.Brown v. E*TRADE Financial Corporation et al.names as defendants E*TRADE and each member of the E*TRADE board of directors. The fifth complaint, filed in the United States District Court for the District of New Jersey by Yael Respler individually, is captionedRespler v. E*TRADE Financial Corporation et al., case number 2:20-cv-05229-KM-ESK.Respler v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The sixth complaint, filed in the United States District Court for the Southern District of New York by Stourbridge Investments LLC individually, is captionedStourbridge Investments LLC v. E*TRADE Financial Corporation et al., case number 1:20-cv-03457-LAP.Stourbridge Investments LLC v. E*TRADE Financial Corporation et al.names as defendants E*TRADE and each member of the E*TRADE board of directors. The seventh complaint, filed in the United States District Court for the Southern District of New York by Chris Ramsubhag individually, is captionedRamsubhag v. E*TRADE Financial Corporation et al., case number 1:20-cv-03891-LAP.Ramsubhag v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The eighth complaint, filed in the United States District Court for the District of New Jersey by Abby Katz individually, is captionedKatz v. E*TRADE Financial Corporation et al., case number 2:20-cv-06212-KM-ESK.Katz v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The ninth complaint, filed in the United States District Court for the Southern District of New York by Victor Serebruany individually, is captionedSerebruany v. E*TRADE Financial Corporation et al., case number 1:20-cv-04344-UA.Serebruany v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors.

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The complaints generally allege, among other things, that the defendants named therein authorized the filing of a materially incomplete and misleading registration statement. Among other remedies, the complaints seek to enjoin the approval and adoption of the merger agreement by a vote of the E*TRADE stockholders and/or the closing of the Merger, as well as damages, costs and attorneys’ fees. The defendants believe that the claims made in these lawsuits are without merit.

There can be no assurances that additional complaints or demands will not be filed or made with respect to the Merger. If additional similar complaints or demands are filed or made, absent new or different allegations that are material, neither E*TRADE nor Morgan Stanley will necessarily announce them.

See “The Merger—Litigation Relating to the Merger” on page 92 of this proxy statement/prospectus.

RISK FACTORS (SEE PAGE 37)

You should also carefully consider the risks that are described in “Risk Factors” beginning on page 37 of this proxy statement/prospectus.

SELECTED HISTORICAL FINANCIAL DATA OF MORGAN STANLEY

The following table presents selected historical consolidated financial data of Morgan Stanley. The selected historical consolidated financial data of Morgan Stanley is derived from the financial information of Morgan Stanley as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 and as of and for each of the fiscal years in the five-year period ended December 31, 2019.

The information set forth below is only a summary and should be read in conjunction with Morgan Stanley’s historical consolidated financial statements, related notes, and management’s discussion and analysis of financial condition and results of operations contained in Morgan Stanley’s respective Annual Reports on Form 10-K, as well as other information that has been filed with the SEC. The unaudited consolidated income statement for the three months ended March 31, 2020 and March 31, 2019 and consolidated balance sheet as of March 31, 2020 are derived from Morgan Stanley’s unaudited consolidated financial statements and related notes contained in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which is incorporated by reference into this proxy statement/prospectus. The audited consolidated income statements for the years ended December 31, 2019, 2018 and 2017 and the consolidated balance sheets as of December 31, 2019 and 2018 are derived from Morgan Stanley’s audited consolidated financial statements and related notes contained in its Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this proxy statement/prospectus. The audited consolidated income statements for the years ended December 31, 2016 and 2015 and the consolidated balance sheets as of December 31, 2017, 2016 and 2015 are derived from Morgan Stanley’s audited consolidated financial statements for such years, which have not been incorporated by reference into this proxy statement/prospectus. For information on where you can obtain copies of this information, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

The historical results included below and elsewhere in this proxy statement/prospectus or incorporated by reference herein are not necessarily indicative of the future performance of Morgan Stanley or the combined company after the completion of the Merger.

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Morgan Stanley Selected Financial and Operating Data
(Dollars in millions except per share amounts, shares in millions)

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SELECTED HISTORICAL FINANCIAL DATA OF E*TRADE

The following table presents selected historical consolidated financial data of E*TRADE. The selected historical consolidated financial data of E*TRADE is derived from (i) the consolidated financial statements of E*TRADE and related notes as of and for each of the fiscal years in the five-year period ended December 31, 2019 and (ii) the unaudited consolidated financial statements and related notes as of and for the quarterly periods ended March 31, 2020 and March 31, 2019.

The information set forth below is only a summary and should be read in conjunction with E*TRADE’s historical consolidated financial statements, related notes, and management’s discussion and analysis of financial condition and results of operations contained in E*TRADE’s respective Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as other information that has been filed with the SEC. The selected historical consolidated financial data of E*TRADE presented below for the years ended December 31, 2019, 2018 and 2017 and as of December 31, 2019 and 2018 are derived from E*TRADE’s audited consolidated statements of income for the years ended December 31, 2019, 2018 and 2017 and audited consolidated balance sheets as of December 31, 2019 and 2018, and accompanying notes thereto, contained in E*TRADE’s Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this proxy statement/prospectus. The selected historical consolidated financial data of E*TRADE presented below for the quarters ended March 31, 2020 and 2019 and as of March 31, 2020 and 2019 are derived from E*TRADE’s unaudited consolidated statements of income for the quarters ended March 31, 2020 and 2019 and unaudited consolidated balance sheet as of March 31, 2020, and accompanying notes thereto, contained in E*TRADE’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which is incorporated by reference into this proxy statement/prospectus. The unaudited consolidated balance sheet as of March 31, 2019 is derived from E*TRADE's unaudited consolidated financial statements and related notes thereto contained in E*TRADE's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which has not been incorporated by reference into this proxy statement/prospectus. The selected historical consolidated financial data of E*TRADE presented below for the years ended December 31, 2016 and 2015 and as of December 31, 2017, 2016 and 2015 are derived from E*TRADE’s audited consolidated statements of income for the years ended December 31, 2016 and 2015 and audited consolidated balance sheets as of December 31, 2017, 2016 and 2015, and accompanying notes thereto, which have not been incorporated by reference into this proxy statement/prospectus. For information on where you can obtain copies of this information, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

The historical results included below and elsewhere in this proxy statement/prospectus or incorporated by reference herein are not necessarily indicative of the future performance of E*TRADE or the combined company after the completion of the Merger.

E*TRADE has completed acquisitions in recent fiscal periods. The results and other financial information of those acquired operations are not included in the table below for the periods or dates prior to their respective acquisition dates and, therefore, the results for these prior periods are not comparable in all respects and may not be predictive of E*TRADE’s future results. In addition, the selected historical consolidated financial information in the tables below does not include, on any basis, the results or financial condition of Morgan Stanley for any period or as of any date.

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E*TRADE Selected Financial and Operating Data
(Dollars in millions except per share amounts, shares in thousands)

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following table sets forth selected historical and unaudited pro forma combined per share information of Morgan Stanley and E*TRADE. The unaudited pro forma combined per share information was computed by combining the historical financial information of Morgan Stanley and E*TRADE for the year ended December 31, 2019 and for the quarter ended March 31, 2020, along with the effects of the acquisition method of accounting for business combinations as though the companies were combined at the beginning of such period. Although helpful in illustrating the financial characteristics of the combined company, this information does not reflect the benefits of expected cost and funding synergies, opportunities to earn additional revenue, the impact of restructuring and Merger-related costs or other factors.

The historical per share information is derived from audited financial statements of Morgan Stanley as of and for the year ended December 31, 2019 and unaudited financial statements of Morgan Stanley as of and for the quarter ended March 31, 2020, and E*TRADE as of and for the year ended December 31, 2019 and as of and for the quarter ended March 31, 2020.

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The unaudited pro forma combined per share information has been presented for illustrative purposes only and is based on assumptions and estimates considered appropriate by Morgan Stanley’s management. The pro forma data presented does not represent what the actual results of operations and financial position would have been had the companies actually been combined as of the beginning of the period presented. This information was prepared using estimated fair values and is subject to adjustment as additional information becomes available and as additional analysis is performed, and is not necessarily indicative of the future consolidated results of operations or financial position of the combined company. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma per share financial information.

Morgan Stanley and E*TRADE declared and paid dividends during the periods presented. For more information on dividends of Morgan Stanley and E*TRADE, see “Comparative Per Share Market Price and Dividend Information” beginning on page 36 of this proxy statement/prospectus.

You should read this information in conjunction with (i) the selected historical consolidated financial information and the related notes included elsewhere in this proxy statement/prospectus and (ii) the historical consolidated financial statements of Morgan Stanley and E*TRADE and related notes contained in Morgan Stanley’s and E*TRADE’s respective Annual Reports on Form 10-K for the year ended December 31, 2019 and respective Quarterly Reports on Form 10-Q for the quarter ended March 31, 2020, which are incorporated by reference into this proxy statement/prospectus. For information on where you can obtain copies of this information, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

MARKET PRICES

The following table sets forth the closing price per share of Morgan Stanley common stock and per share of E*TRADE common stock as reported on the NYSE and the Nasdaq on February 19, 2020, the last trading dayprior to public announcement of the Merger by Morgan Stanley and E*TRADE on February 20, 2020, and on June 10, 2020, the most recent practicable trading day prior to the date of this proxy statement/prospectus for which this information was available. The table also shows the implied value of the Common Merger Consideration for each share of E*TRADE common stock as of the same dates. This implied value was calculated by multiplying the closing price of a share of Morgan Stanley common stock on the relevant date by the exchange ratio.

The market prices of shares of Morgan Stanley common stock and E*TRADE common stock have fluctuated since the date of the announcement of the merger agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the dates of the E*TRADE special meeting and the date the Merger is completed. No assurance can be given concerning the market prices of shares of Morgan Stanley common stock and shares of E*TRADE common stock before completion of the Merger or shares of Morgan Stanley common stock after completion of the Merger. The exchange ratio is fixed in the merger agreement, but the market price of shares of Morgan Stanley common stock (and therefore the value of the Common Merger Consideration) when received by E*TRADE stockholders after the Merger is completed could be greater than, less than or the same as shown in the table above. Accordingly, E*TRADE stockholders are advised to obtain current market quotations for shares of Morgan Stanley common stock and shares of E*TRADE common stock in deciding whether to vote for approval and adoption of the merger agreement.

DIVIDENDS

Morgan Stanley currently pays a quarterly dividend on shares of Morgan Stanley common stock and last paid a quarterly dividend on May 15, 2020 of $0.35 per share. Under the terms of the merger agreement, during the period before completion of the Merger, Morgan Stanley is not permitted to declare, set aside or pay or make any dividend or any other distribution in respect of Morgan Stanley common stock other than regular cash dividends in the ordinary course of business consistent with past practice or stock dividends subject to certain adjustments to the Common Merger Consideration. Morgan Stanley also currently pays dividends that are required to be paid pursuant to the terms of Morgan Stanley preferred stock outstanding and is permitted to continue to pay such dividends prior to the completion of the Merger.

E*TRADE currently pays a quarterly dividend on shares of E*TRADE common stock and last paid a quarterly dividend on May 19, 2020 of $0.14 per share. Under the terms of the merger agreement, during the period before completion of the Merger, E*TRADE is not permitted to declare, set aside or pay any dividend or other distribution in respect of E*TRADE common stock other than regular cash dividends in the ordinary course of business consistent with past practice in an amount not to exceed $0.14 per share of E*TRADE common stock per quarter (as such amount may be adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to E*TRADE common stock). E*TRADE also currently pays dividends required to be paid pursuant to the terms of E*TRADE preferred stock outstanding and is permitted to continue to pay such dividends prior to the completion of the Merger.

In addition, the merger agreement provides that Morgan Stanley and E*TRADE will coordinate the declaration of, record dates for and payment of dividends in respect of their respective shares in order that holders of shares of Morgan Stanley stock and E*TRADE stock do not receive two dividends or fail to receive one dividend for any quarter in respect of shares of E*TRADE stock, on the one hand, and shares of Morgan Stanley stock issuable in the Merger, on the other hand.

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After completion of the Merger, any former E*TRADE stockholder who holds Morgan Stanley common shares into which shares of E*TRADE common stock have been converted in connection with the Merger will receive whatever dividends are declared and paid on Morgan Stanley common shares. However, no dividend or other distribution having a record date after completion of the Merger will actually be paid with respect to any shares of Morgan Stanley common stock into which shares of E*TRADE common stock have been converted in connection with the Merger until the certificates formerly representing shares of E*TRADE common stock have been surrendered (or the book-entry shares formerly representing shares of E*TRADE common stock have been transferred), at which time any accrued dividends and other distributions on those shares of Morgan Stanley common stock with a payment date prior to such date will be paid without interest. Subject to the limitations set forth in the merger agreement, any future dividends by Morgan Stanley will be made at the discretion of the Morgan Stanley board of directors. Subject to the limitations set forth in the merger agreement, any future dividends by E*TRADE will be made at the discretion of the E*TRADE board of directors. There can be no assurance that any future dividends will be declared or paid by Morgan Stanley or E*TRADE or as to the amount or timing of those dividends, if any.

RISK FACTORS

In addition to the other information contained in or incorporated by reference into this proxy statement/ prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 45 of this proxy statement/prospectus, the following risk factors should be considered carefully in determining whether to vote for the approval and adoption of the merger agreement. You should also read and consider the risk factors associated with each of the businesses of Morgan Stanley and E*TRADE because these risk factors may affect the operations and financial results of the combined company. These risk factors may be found under Part I, Item 1A, “Risk Factors” in each of Morgan Stanley’s and E*TRADE’s Annual Reports on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020 and February 19, 2020, respectively, Item 8.01, “Other Matters” in Morgan Stanley’s Current Report on Form 8-K filed with the SEC on April 16, 2020, and in Morgan Stanley’s and E*TRADE’s subsequent filings with the SEC, in each case, which are incorporated by reference into this proxy statement/prospectus. For information on where you can obtain copies of this information, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Because the exchange ratio is fixed and the market price of Morgan Stanley common stock has fluctuated and will continue to fluctuate, E*TRADE stockholders cannot be sure at the time they vote on the Merger of the value of the consideration they will receive upon completion of the Merger or the value of the E*TRADE common stock they will give up.

Upon completion of the Merger, (i) each share of E*TRADE common stock outstanding immediately prior to the Merger (except for shares of E*TRADE common stock held by E*TRADE as treasury stock or by Morgan Stanley (other than any Fiduciary Shares) which will be cancelled without consideration) will automatically be converted into the right to receive 1.0432 shares of Morgan Stanley common stock and (ii) each share of E*TRADE Series A Preferred Stock and E*TRADE Series B Preferred Stock outstanding immediately prior to the Merger (except for shares of E*TRADE Series A Preferred Stock and E*TRADE Series B Preferred Stock held by E*TRADE as treasury stock or by Morgan Stanley (other than any Fiduciary Shares) which will be cancelled without consideration) will automatically be converted into the right to receive one share of New Morgan Stanley Replacement Series A Preferred Stock or New Morgan Stanley Replacement Series B Preferred Stock, as applicable, having the terms set forth in the merger agreement and described under “Description of Morgan Stanley Capital Stock—New Morgan Stanley Preferred Stock to Be Issued in the Merger” beginning on page 134 of this proxy statement/prospectus. Because the exchange ratio is fixed, the value of the Common Merger Consideration will depend on the market price of Morgan Stanley common stock at the time the Merger is completed. The value of the Common Merger Consideration has fluctuated since the date of the announcement of the merger agreement and will continue to fluctuate from the date of this proxy statement/prospectus to the date of the E*TRADE special meeting and the date the Merger is completed and thereafter. The closing price per share of E*TRADE common stock as of February 19, 2020, the last trading day prior to public announcement of the Merger by Morgan Stanley and E*TRADE, was $44.93, and the closing price per share has fluctuated as high as $54.73 and as low as $27.27 between February 19, 2020and June 10, 2020, the most recent practicabletrading day prior to the date of this proxy statement/prospectus. Theclosing price per share of Morgan Stanley common stock as of February 19, 2020, the last trading day prior to public announcement of the Merger by Morgan Stanley and

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E*TRADE, was $56.31, and the closing price per share has not fluctuated higher than $56.31 and has fluctuated as low as $27.81 between February 19, 2020 and June 10, 2020, the most recent practicabletrading day prior to the date of this proxy statement/prospectus. Accordingly, at the time of the E*TRADE special meeting, E*TRADE stockholders will not know or be able to determine the market value of the Common Merger Consideration they would receive upon completion of the Merger. Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in Morgan Stanley’s and E*TRADE’s respective businesses, operations and prospects, market assessments of the likelihood that the Merger will be completed, the timing of the Merger, regulatory considerations and COVID-19. Many of these factors are beyond Morgan Stanley’s and E*TRADE’s control. You are urged to obtain current market quotations for Morgan Stanley’s common stock traded on the NYSE (trading symbol “MS”) and E*TRADE’s common stock traded on the Nasdaq (trading symbol “ETFC”).

The market price of Morgan Stanley common stock after the Merger may be affected by factors different from those affecting the market price of E*TRADE common stock.

Upon completion of the Merger, holders of shares of E*TRADE common stock will become holders of shares of Morgan Stanley common stock. The businesses of Morgan Stanley differ from those of E*TRADE in important respects, and, accordingly, the results of operations of Morgan Stanley after the Merger, as well as the market price of Morgan Stanley common stock, may be affected by factors different from those currently affecting the results of operations of E*TRADE. For further information on the respective businesses of Morgan Stanley and E*TRADE and certain factors to consider in connection with those businesses, see the documents incorporated by reference into this proxy statement/prospectus and referred to in “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Additionally, the market price of Morgan Stanley common stock may fluctuate significantly following completion of the Merger, and holders of E*TRADE common stock could lose the value of their investment in Morgan Stanley common stock. The issuance of shares of Morgan Stanley common stock in the Merger could on its own have the effect of depressing the market price for Morgan Stanley common stock. In addition, many E*TRADE stockholders may decide not to hold the shares of Morgan Stanley common stock they receive as a result of the Merger. Other E*TRADE stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of Morgan Stanley common stock they receive as a result of the Merger. Any such sales of Morgan Stanley common stock could have the effect of depressing the market price for Morgan Stanley common stock.

Moreover, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, the Morgan Stanley common stock, regardless of Morgan Stanley’s actual operating performance.

After completion of the Merger, Morgan Stanley may fail to realize the anticipated benefits and cost savings of the Merger, which could adversely affect the value of Morgan Stanley common stock.

The success of the Merger will depend, in significant part, on Morgan Stanley’s ability to realize the anticipated benefits and cost savings from combining the businesses of Morgan Stanley and E*TRADE. The ability of Morgan Stanley to realize these anticipated benefits and cost savings is subject to certain risks including:

If Morgan Stanley is not able to successfully combine the businesses of Morgan Stanley and E*TRADE within the anticipated time frame, or at all, the anticipated cost savings and other benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected, the combined business may not perform as expected and the value of the Morgan Stanley common shares (including the Common Merger Consideration) may be adversely affected.

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Morgan Stanley and E*TRADE have operated and, until completion of the Merger, will continue to operate, independently, and there can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Morgan Stanley or E*TRADE employees, the loss of clients, the disruption of either company’s or both companies’ ongoing businesses or in unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of Morgan Stanley and E*TRADE in order to realize the anticipated benefits of the Merger so the combined business performs as expected:

In addition, at times, the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the Merger and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and the business of the combined company.

Morgan Stanley and E*TRADE may have difficulty attracting, motivating and retaining executives and other employees in light of the Merger.

Uncertainty about the effect of the Merger on Morgan Stanley and E*TRADE employees may impair Morgan Stanley’s and E*TRADE’s ability to attract, retain and motivate personnel prior to and following the Merger. Employee retention may be particularly challenging during the pendency of the Merger, as employees of Morgan Stanley and E*TRADE may experience uncertainty about their future roles with the combined business. In addition, pursuant to change-in-control provisions in their respective employment agreements or term sheets with E*TRADE, certain employees of E*TRADE are entitled to receive severance payments upon a constructive termination of employment. Such E*TRADE employees potentially could terminate their employment following specified circumstances set forth in their employment agreements or term sheets, including certain changes in such employees’ position, compensation or benefits and collect severance. Such circumstances could occur in connection with the Merger as a result of changes in roles and responsibilities. See “Interests of E*TRADE’s Directors and Executive Officers in the Merger” beginning on page 120 of this proxy statement/prospectus for a further discussion of some of these issues. If employees of Morgan Stanley or E*TRADE depart, the integration of the companies may be more difficult and the combined business following the Merger may be harmed. Furthermore, Morgan Stanley may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the businesses of Morgan Stanley or E*TRADE, and Morgan Stanley’s ability to realize the anticipated benefits of the Merger may be adversely affected. In addition, there could otherwise be disruptions to or distractions for the workforce and management associated with integrating employees into Morgan Stanley.

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Completion of the Merger is subject to many conditions and if these conditions are not satisfied or waived, the Merger will not be completed.

The obligation of each of Morgan Stanley, E*TRADE and Merger Sub to complete the Merger is subject to the satisfaction (or, to the extent permitted by applicable law, waiver) of a number of conditions, including, among others: (i) the affirmative vote of the holders of a majority of the shares of E*TRADE common stock outstanding and entitled to vote at the E*TRADE special meeting approving and adopting the merger agreement (which condition described in this clause (i) may not be waived), (ii) (A) the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act and (B) certain governmental filings and/or approvals (as described under “The Merger—Regulatory Approvals Required for the Merger” beginning on page 88 of this proxy statement/prospectus) having been made, obtained or received (or the waiting periods with respect thereto having expired or been terminated), as applicable (in the case of Morgan Stanley and Merger Sub’s obligations to complete the Merger, without the imposition of a Burdensome Condition (see “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on page 109 of this proxy statement/prospectus for the definition of Burdensome Condition)) and there being no pending litigation or similar legal action by any governmental authority seeking to impose a Burdensome Condition, (iii) absence of (x) any applicable law or order preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by the merger agreement and (y) any litigation or similar legal action by any governmental authority (in any jurisdiction in which Morgan Stanley, E*TRADE or any of their respective subsidiaries conducts material operations) seeking to prohibit or restrain the Merger, (iv) approval for the listing on the NYSE of the shares of Morgan Stanley common stock to be issued in the Merger, subject to official notice of issuance, (v) accuracy of the representations and warranties made in the merger agreement by, in the case of Morgan Stanley and Merger Sub’s obligations to complete the Merger, E*TRADE and, in the case of E*TRADE’s obligation to complete the Merger, Morgan Stanley, in each case, as of the date of the merger agreement and as of the date of completion of the Merger, subject to certain materiality thresholds, (vi) performance in all material respects by, in the case of Morgan Stanley and Merger Sub’s obligations to complete the Merger, E*TRADE and, in the case of E*TRADE’s obligation to complete the Merger, Morgan Stanley and Merger Sub, of the obligations required to be performed by it at or prior to the effective time of the Merger and (vii) the absence since the date of the merger agreement of a material adverse effect on, in the case of Morgan Stanley and Merger Sub’s obligations to complete the Merger, E*TRADE and, in the case of E*TRADE’s obligation to complete the Merger, Morgan Stanley (see “The Merger Agreement—Definition of ‘Material Adverse Effect’” beginning on page 101 of this proxy statement/prospectus for the definition of material adverse effect).

For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 98 of this proxy statement/prospectus.

There can be no assurance that the conditions to the closing of the Merger will be satisfied or waived or that the Merger will be completed. See “Risk Factors—Failure to complete the Merger could negatively impact the stock price and the future business and financial results of Morgan Stanley and E*TRADE” beginning on page 42 of this proxy statement/prospectus.

In order to complete the Merger, Morgan Stanley and E*TRADE must make certain governmental filings and obtain certain governmental authorizations, and if such filings and authorizations are not made or granted or are granted with conditions to the parties, the closing of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.

The closing of the Merger is conditioned upon the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act and other required governmental authorizations. Although Morgan Stanley and E*TRADE have agreed in the merger agreement to use their reasonable best efforts, subject to certain limitations, to make certain governmental filings or obtain the required governmental authorizations, as the case may be, there can be no assurance that the relevant waiting periods will expire or that the relevant authorizations will be obtained. In addition, the governmental authorities with or from which these authorizations are required have broad discretion in administering the governing regulations. Adverse developments in Morgan Stanley’s or E*TRADE’s regulatory standing or any other factors considered by regulators in granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally could affect whether and when required governmental authorizations are granted. As

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a condition to authorization of the Merger, governmental authorities may impose requirements, limitations or costs or place restrictions on the conduct of Morgan Stanley’s business after completion of the Merger. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying the closing of the Merger or imposing additional material costs on or materially limiting the revenues of the combined company following the Merger, or otherwise adversely affecting Morgan Stanley’s businesses and results of operations after completion of the Merger. In addition, there can be no assurance that these terms, obligations or restrictions will not result in the delay or abandonment of the Merger. See “The Merger Agreement—Conditions to Completion of the Merger” and “The Merger Agreement—Reasonable Best Efforts Covenant” beginning on pages 98 and 109, respectively, of this proxy statement/prospectus.

Morgan Stanley’s and E*TRADE’s business relationships may be subject to disruption due to uncertainty associated with the Merger.

Parties with which Morgan Stanley or E*TRADE does business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with Morgan Stanley, E*TRADE or the combined business. Morgan Stanley’s and E*TRADE’s business relationships may be subject to disruption as parties with which Morgan Stanley or E*TRADE does business may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Morgan Stanley, E*TRADE or the combined business. These disruptions could have an adverse effect on the businesses, financial condition, results of operations or prospects of the combined business, including an adverse effect on Morgan Stanley’s ability to realize the anticipated benefits of the Merger. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the Merger or termination of the merger agreement.

Certain of E*TRADE’s executive officers and directors have interests in the Merger that may be different from your interests as a stockholder of E*TRADE or as a stockholder of Morgan Stanley.

In considering the recommendation of the E*TRADE board of directors to vote for the approval and adoption of the merger agreement, E*TRADE stockholders should be aware that the directors and executive officers of E*TRADE may have interests in the Merger that are different from, or in addition to, the interests of E*TRADE stockholders generally, including potential accelerated vesting of equity awards and severance payments and certain arrangements and agreements with Morgan Stanley. The E*TRADE board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and approving the Merger, and in making its recommendation that E*TRADE stockholders vote to approve and adopt the merger agreement.

For more information, see “Interests of E*TRADE’s Directors and Executive Officers in the Merger” beginning on page 120 of this proxy statement/prospectus.

The merger agreement limits E*TRADE’s ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire E*TRADE for greater consideration than what Morgan Stanley has agreed to pay pursuant to the merger agreement.

The merger agreement contains provisions that make it more difficult for E*TRADE to sell its business to a party other than Morgan Stanley. These provisions include a general prohibition on E*TRADE soliciting any acquisition proposal or offer for a competing transaction. Further, subject to certain exceptions, the E*TRADE board of directors will not withdraw or modify in a manner adverse to Morgan Stanley the recommendation of the E*TRADE board of directors in favor of the approval and adoption of the merger agreement, and Morgan Stanley generally has a right to match any competing acquisition proposals that may be made. Notwithstanding the foregoing, at any time prior to the approval and adoption of the merger agreement by E*TRADE stockholders, the E*TRADE board of directors is permitted to withdraw or modify in a manner adverse to Morgan Stanley the recommendation of the E*TRADE board of directors in favor of the approval and adoption of the merger agreement in certain circumstances if it determines in good faith that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties to E*TRADE stockholders under applicable law. The merger agreement does not require that E*TRADE submit the approval and adoption of the merger agreement to a vote of E*TRADE stockholders if the E*TRADE board of directors changes its recommendation in favor of the approval and adoption of the merger agreement in a manner adverse to Morgan Stanley and terminates the merger agreement in order to enter into an alternative acquisition agreement with respect to a competing transaction in accordance with the terms of the merger agreement. In certain circumstances, upon termination of the merger agreement, E*TRADE will be required to pay

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a termination fee of $375 million to Morgan Stanley, including if E*TRADE terminates the merger agreement prior to obtaining E*TRADE stockholder approval in order to enter into an alternative acquisition agreement with respect to a competing transaction in accordance with the terms of the merger agreement. See “The Merger Agreement—No Solicitation” beginning on page 106 of this proxy statement/prospectus.

While both E*TRADE and Morgan Stanley believe these provisions and agreements are reasonable and customary and are not preclusive of other offers, the restrictions, including the added expense of the $375 million termination fee that may become payable by E*TRADE to Morgan Stanley in certain circumstances, might discourage a third party that has an interest in acquiring all or a significant part of E*TRADE from considering or proposing that acquisition, even if that party were prepared to pay consideration with a higher per-share value than the consideration payable in the Merger pursuant to the merger agreement.

Failure to complete the Merger could negatively impact the stock price and the future business and financial results of Morgan Stanley and E*TRADE.

If the Merger is not completed for any reason, including as a result of E*TRADE stockholders failing to approve the necessary proposals, the ongoing businesses of Morgan Stanley and E*TRADE may be adversely affected, and without realizing any of the benefits of having completed the Merger, Morgan Stanley and E*TRADE would be subject to a number of risks, including the following:

There can be no assurance that the risks described above will not materialize. If any of those risks materialize, they may materially and adversely affect Morgan Stanley’s and/or E*TRADE’s businesses, financial condition, financial results, ratings, stock prices and/or bond prices.

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In addition, Morgan Stanley and E*TRADE could be subject to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against Morgan Stanley or E*TRADE to perform their respective obligations under the merger agreement. If the Merger is not completed, these risks may materialize and may adversely affect Morgan Stanley’s and/or E*TRADE’s businesses, financial condition, financial results, ratings, stock prices and/or bond prices.

The shares of Morgan Stanley common stock to be received by E*TRADE stockholders upon completion of the Merger will have different rights from shares of E*TRADE common stock.

Upon completion of the Merger, E*TRADE stockholders will no longer be stockholders of E*TRADE but will instead become stockholders of Morgan Stanley. E*TRADE stockholders’ rights as stockholders will continue to be governed by Delaware law but the terms of the Morgan Stanley certificate of incorporation and the Morgan Stanley bylaws are in some respects materially different than the terms of the E*TRADE certificate of incorporation and the E*TRADE bylaws, which currently govern the rights of E*TRADE stockholders. See “Comparison of Stockholder Rights” beginning on page 139 of this proxy statement/prospectus for a discussion of the different rights associated with Morgan Stanley common shares.

After the Merger, E*TRADE stockholders will have a significantly lower ownership and voting interest in Morgan Stanley than they currently have in E*TRADE and will exercise less influence over management.

Based on the number of shares of E*TRADE common stock and the E*TRADE equity awards outstanding as of the E*TRADE record date for the E*TRADE special meeting, Morgan Stanley estimates that it will issue approximately 233,013,148 shares of Morgan Stanley common stock pursuant to the Merger, provided that Morgan Stanley may be required to reserve additional shares of Morgan Stanley common stock for issuance if the Merger is not completed as of January 1, 2021 and certain E*TRADE equity awards are required to be converted into equity awards of Morgan Stanley pursuant to the merger agreement. The actual number of shares of Morgan Stanley common stock to be issued and reserved for issuance in connection with the Merger will be determined at completion of the Merger based on the exchange ratio and the number of shares of E*TRADE common stock and the E*TRADE equity awards outstanding at that time. Based on the number of shares of E*TRADE common stock outstanding as of June 10, 2020, and the number of shares of Morgan Stanley common stock outstanding as of June 10, 2020, Morgan Stanley and E*TRADE estimate that, as of immediately following completion of the Merger, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 87% and holders of E*TRADE common stock immediately prior to the merger will hold approximately 13%, of the outstanding shares of Morgan Stanley common stock (or, on a fully diluted basis, holders of Morgan Stanley common stock as of immediately prior to the Merger will hold approximately 88% and holders of E*TRADE common stock as of immediately prior to the Merger will hold approximately 12% of the shares of Morgan Stanley common stock). Consequently, former E*TRADE stockholders will have less influence over the management and policies of Morgan Stanley than they currently have over the management and policies of E*TRADE.

E*TRADE stockholders are not entitled to appraisal rights in connection with the Merger.

Appraisal rights are statutory rights that enable stockholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the applicable transaction. Under Delaware law, holders of shares of E*TRADE common stock will not have rights to an appraisal of the fair value of their shares in connection with the Merger. See “The Merger—No Dissenters’ or Appraisal Rights” beginning on page 91 of this proxy statement/prospectus.

Lawsuits have been filed against E*TRADE, Morgan Stanley and the E*TRADE board of directors and other lawsuits may be filed against E*TRADE, Morgan Stanley and their respective board of directors challenging the Merger. An adverse ruling in any such lawsuit may prevent the Merger from being completed.

As of June 12, 2020, nine complaints had been filed by purported E*TRADE stockholders challenging the Merger. The first, filed in the United States District Court for the Southern District of New York by Shiva Stein individually, is captionedStein v. E*TRADE Financial Corporation et al., case number 1:20-cv-03134-LAP.Stein v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The second complaint, a putative class action complaint, was filed in the United States District Court for the District of Delaware by John Thompson and is captionedThompson v. E*TRADE Financial Corporation et al.,

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case number 1:20-cv-00553-RGA.Thompson v. E*TRADE Financial Corporation et al. names as defendants Morgan Stanley, Merger Sub, E*TRADE and each member of the E*TRADE board of directors. The third complaint, filed in the United States District Court for the District of New Jersey by Jacqueline Galeano individually, is captionedGaleano v. E*TRADE Financial Corporation et al., case number 2:20-cv-05123-KM-ESK.Galeano v. E*TRADE Financial Corporation et al.names as defendants E*TRADE and each member of the E*TRADE board of directors. The fourth complaint, a putative class action complaint, was filed in the United States District Court for the Southern District of New York by Kevin Brown and is captionedBrown v. E*TRADE Financial Corporation et al., case number 1:20-cv-03322-LAP.Brown v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The fifth complaint, filed in the United States District Court for the District of New Jersey by Yael Respler individually, is captionedRespler v. E*TRADE Financial Corporation et al., case number 2:20-cv-05229-KM-ESK.Respler v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The sixth complaint, filed in the United States District Court for the Southern District of New York by Stourbridge Investments LLC individually, is captionedStourbridge Investments LLC v. E*TRADE Financial Corporation et al., case number 1:20-cv-03457-LAP.Stourbridge Investments LLC v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The seventh complaint, filed in the United States District Court for the Southern District of New York by Chris Ramsubhag individually, is captionedRamsubhag v. E*TRADE Financial Corporation et al., case number 1:20-cv-03891-LAP.Ramsubhag v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The eighth complaint, filed in the United States District Court for the District of New Jersey by Abby Katz individually, is captionedKatz v. E*TRADE Financial Corporation et al., case number 2:20-cv-06212-KM-ESK.Katz v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors. The ninth complaint, filed in the United States District Court for the Southern District of New York by Victor Serebruany individually, is captionedSerebruany v. E*TRADE Financial Corporation et al., case number 1:20-cv-04344-UA.Serebruany v. E*TRADE Financial Corporation et al. names as defendants E*TRADE and each member of the E*TRADE board of directors.

The complaints generally allege, among other things, that the defendants named therein authorized the filing of a materially incomplete and misleading registration statement. Among other remedies, the complaints seek to enjoin the approval and adoption of the merger agreement by a vote of the E*TRADE stockholders and/or the closing of the Merger, as well as damages, costs and attorneys’ fees. The defendants believe that the claims made in these lawsuits are without merit.

See “The Merger—Litigation Relating to the Merger” beginning on page 92 of this proxy statement/prospectus for more information about the lawsuits related to the Merger that have been filed prior to the date of this proxy statement/prospectus. There can be no assurances that additional complaints or demands will not be filed or made with respect to the Merger. If additional similar complaints or demands are filed or made, absent new or different allegations that are material, neither E*TRADE nor Morgan Stanley will necessarily announce them.

One of the conditions to completion of the Merger is the absence of any applicable law (including any order) being in effect that prohibits completion of the Merger. Accordingly, if a plaintiff is successful in obtaining an order prohibiting completion of the Merger, then such order may prevent the Merger from being completed, or from being completed within the expected time frame.

Morgan Stanley and E*TRADE will incur significant transaction and Merger-related costs in connection with the Merger.

Morgan Stanley and E*TRADE expect to incur a number of non-recurring costs associated with the Merger and combining the operations of the two companies. The significant, non-recurring costs associated with the Merger include, among others, fees and expenses of financial advisors (which are described in “The Merger—Opinions of E*TRADE’s Financial Advisors” beginning on page 73 of this proxy statement/prospectus) and other advisors and representatives, certain employment-related costs relating to employees of E*TRADE (which are described in “Interests of E*TRADE’s Directors and Executive Officers in the Merger” beginning on page 120 of this proxy statement/prospectus), filing fees due in connection with filings required under the HSR Act and filing fees and printing and mailing costs for this proxy statement/prospectus. Some of these costs have already been incurred or may be incurred regardless of whether the Merger is completed, including a portion of the fees and expenses

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of financial advisors and other advisors and representatives and filing fees for this proxy statement/prospectus. Morgan Stanley also will incur transaction fees and costs related to formulating and implementing integration plans with respect to the two companies, including facilities and systems consolidation costs. Morgan Stanley continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Merger and the integration of the two companies’ businesses. Although Morgan Stanley expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow Morgan Stanley to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

The Merger may not be accretive, and may be dilutive, to Morgan Stanley’s earnings per share, which may negatively affect the market price of Morgan Stanley common stock following completion of the Merger.

In connection with the completion of the Merger, Morgan Stanley expects to issue approximately 233,013,148 Morgan Stanley common shares, provided that Morgan Stanley may be required to reserve additional shares of Morgan Stanley common stock for issuance if the Merger is not completed as of January 1, 2021 and certain E*TRADE equity awards are required to be converted into equity awards of Morgan Stanley pursuant to the merger agreement. The issuance of new Morgan Stanley common shares could have the effect of depressing the market price of Morgan Stanley common shares.

Morgan Stanley currently projects that the Merger will result in a number of benefits, including enhanced competitive positioning and a platform from which to accelerate growth, and that it will ultimately be accretive to earnings per share. This projection is based on preliminary estimates that may materially change. However, future events and conditions could reduce or delay the accretion that is currently projected or result in the Merger being dilutive to Morgan Stanley’s earnings per share, including adverse changes in market conditions, additional transaction and integration related costs and other factors such as the failure to realize some or all of the benefits anticipated in the Merger. Any dilution of, reduction in or delay of any accretion to, Morgan Stanley’s earnings per share could cause the price of shares of Morgan Stanley common stock to decline or grow at a reduced rate.

The future results of the combined company may be adversely impacted if the combined company does not effectively manage its expanded operations following completion of the Merger.

Following completion of the Merger, the size of the combined company’s business will be significantly larger than the current size of either Morgan Stanley’s or E*TRADE’s respective businesses. The combined company’s ability to successfully manage this expanded business will depend, in part, upon management’s ability to implement an effective integration of the two companies and its ability to manage a combined business with significantly larger size and scope with the associated increased costs and complexity. There can be no assurances that the management of the combined company will be successful or that the combined company will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the Merger.

Risks relating to Morgan Stanley and E*TRADE.

Morgan Stanley and E*TRADE are, and following completion of the Merger Morgan Stanley will continue to be, subject to the risks described in (i) Part I, Item 1A, “Risk Factors” in Morgan Stanley’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 27, 2020 and Item 8.01, “Other Matters” in Morgan Stanley’s Current Report on Form 8-K filed with the SEC on April 16, 2020, (ii) Part I, Item 1A, “Risk Factors” in E*TRADE’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020, and (iii) Morgan Stanley’s and E*TRADE’s subsequent filings with the SEC, in each case, which are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus, including the information included or incorporated by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Exchange Act. In addition, the management of Morgan Stanley or E*TRADE may make forward-looking statements to analysts, investors, representatives of the media and others. Forward-looking statements include statements that refer to expectations, projections, or other characterizations of future events or circumstances and are identified by words such as “believe,” “anticipate,” “expect,” “estimate,” “assume,” “intend,” “plan,” “forecast,” “explore,” “predict,” “project,” “view,” “will,” “may,” “might,” “aim,” “target,” “intend,” “can,”

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“could,” “should,” “continue,” “build,” “improve,” “growth,” “increase,” “probably,” “potential,” “strategy,” “seek,” “objective” or the negatives thereof and other similar expressions. These forward-looking statements include, but are not limited to, statements about the anticipated benefits of the Merger, including future financial and operating results and performance, statements about Morgan Stanley’s and E*TRADE’s and the combined company’s plans, objectives, expectations and intentions with respect to future operations, products and services, financial projections, the amount and timing of synergies from the Merger and expected timing of completion of the Merger.

These forward-looking statements, which reflect Morgan Stanley’s and E*TRADE’s management’s beliefs, objectives and expectations as of the date of this proxy statement/prospectus, or in the case of any information included or incorporated by reference, as of the date of those documents, are necessarily estimates. Achievement of the expressed beliefs, objectives and expectations is subject to risks and uncertainties that could cause actual results to differ materially.

Factors that may cause actual results to differ include, but are not limited to: the failure of the parties to satisfy the closing conditions in the merger agreement in a timely manner or at all, including stockholder and regulatory approvals; disruptions to the parties’ businesses as a result of the announcement and pendency of the Merger; the parties being unable to successfully implement their integration strategies; the risk that expected revenue, expense and other synergies from the Merger may not be fully realized or may take longer to realize than expected; general market conditions, including the level of interest rates, equity valuations and trading activity; the parties’ ability to attract and retain clients and RIAs and grow those relationships and client assets; competitive pressures on pricing, including deposit rates; the parties’ ability to develop and launch new and enhanced products, services, and capabilities, as well as enhance their infrastructure, in a timely and successful manner; client use of the parties’ advisory solutions and other products and services; client sensitivity to rates; the level of client assets, including cash balances; capital and liquidity needs and management; regulatory guidance; litigation or regulatory matters; any adverse impact of financial reform legislation and related regulations; and natural disasters, war or terrorism activities or pandemics, such as the outbreak of COVID-19 or similar outbreaks, and their effects on economic and business environments in which Morgan Stanley and E*TRADE operate.

Additional factors that could cause Morgan Stanley’s and E*TRADE’s results to differ materially from those described in the forward-looking statements can be found in Morgan Stanley’s and E*TRADE’s filings with the SEC, including the Morgan Stanley 2019 10-K and the E*TRADE 2019 10-K.

You are cautioned not to place undue reliance on Morgan Stanley’s and E*TRADE’s forward-looking statements, which speak only as of the date of this proxy statement/prospectus or the date of any information included or incorporated by reference in this proxy statement/prospectus. All subsequent written and oral forward-looking statements concerning the Merger or other matters addressed in this proxy statement/prospectus and attributable to Morgan Stanley or E*TRADE or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, Morgan Stanley and E*TRADE undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

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THE COMPANIES

MORGAN STANLEY

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments-Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, 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. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley together with its consolidated subsidiaries.

A description of the clients and principal products and services of each of Morgan Stanley’s business segments is as follows:

Morgan Stanley & Co. LLC, registered broker-dealer;

Morgan Stanley was originally incorporated under the laws of the State of Delaware on October 1, 1981, and its predecessor companies date back to 1924. Morgan Stanley common stock is traded on the NYSE under the symbol “MS.”

The principal executive offices of Morgan Stanley are located at 1585 Broadway, New York, New York 10036; its telephone number is (212) 761-4000; and its website is www.morganstanley.com.

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Based on share ownership of Morgan Stanley that MUFG has disclosed in its filings with the SEC, as of March 23, 2020, MUFG beneficially owned approximately 24% of the outstanding shares of common stock of Morgan Stanley.

This proxy statement/prospectus incorporates important business and financial information about Morgan Stanley from other documents that are not included in or delivered with this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

E*TRADE FINANCIAL CORPORATION

E*TRADE and its subsidiaries provide financial services including brokerage and banking products and services to traders, investors, stock plan administrators and participants, and RIAs. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a registered investment adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are federal savings banks (Members FDIC). Employee stock and student loan benefit plan solutions are offered by E*TRADE Financial Corporate Services, Inc.

E*TRADE common stock is traded on the Nasdaq under the symbol “ETFC.” Following the Merger, E*TRADE common stock will be delisted from the Nasdaq.

The principal executive offices of E*TRADE are located at 671 North Glebe Road, Ballston Tower, Arlington, VA 22203-2120.

Additional information about E*TRADE and its subsidiaries are included in documents incorporated by reference into this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

MOON-EAGLE MERGER SUB, INC.

Merger Sub is a wholly owned subsidiary of Morgan Stanley. Merger Sub was formed solely for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

Merger Sub was incorporated in the State of Delaware on February 14, 2020. The principal executive offices of Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

MOON-EAGLE MERGER SUB II, LLC

Second Merger Sub is a wholly owned subsidiary of Morgan Stanley. Second Merger Sub was formed solely for the purpose of completing the Mergers. Second Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Mergers.

Second Merger Sub was incorporated in the State of Delaware on February 24, 2020. The principal executive offices of Second Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

THE E*TRADE SPECIAL MEETING

GENERAL

This proxy statement/prospectus is being provided to E*TRADE stockholders as part of a solicitation of proxies by the E*TRADE board of directors for use at the E*TRADE special meeting and at any adjournments or postponements thereof. This proxy statement/prospectus provides E*TRADE stockholders with information they need to know to be able to vote or instruct their vote to be cast at the E*TRADE special meeting or any adjournment or postponement thereof and should be read carefully in its entirety. In addition, this proxy statement/prospectus constitutes a prospectus for Morgan Stanley in connection with the issuance by Morgan Stanley of Morgan Stanley common stock and Morgan Stanley preferred stock pursuant to the merger agreement.

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DATE, TIME AND PLACE OF THE E*TRADE SPECIAL MEETING

Due to concerns regarding COVID-19 and to assist in protecting the health and well-being of our stockholders and employees, the E*TRADE special meeting will be held exclusively in a virtual format to provide a consistent experience to all stockholders regardless of location, on July 17, 2020 at 8:30 a.m. Eastern Time. We have adopted a virtual format for the E*TRADE special meeting to make participation accessible for stockholders from any geographic location with Internet connectivity. We designed the format of the E*TRADE special meeting to ensure that our stockholders who attend the E*TRADE special meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You are entitled to attend and participate in the E*TRADE special meeting only if you were a stockholder of record as of the close on June 10, 2020, the record date for the E*TRADE special meeting, or hold a valid proxy of such a stockholder for the E*TRADE special meeting. To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. Please note that you will not be able to attend the virtual E*TRADE special meeting in person.

PURPOSES OF THE E*TRADE SPECIAL MEETING

The E*TRADE special meeting is being held to consider and vote upon the following proposals:

RECOMMENDATION OF THE E*TRADE BOARD OF DIRECTORS

The E*TRADE board of directors unanimously recommends that the E*TRADE stockholders vote:

The E*TRADE board of directors unanimously (i) determined that it is in the best interests of E*TRADE and its stockholders, and declared it advisable, for E*TRADE to enter into the merger agreement, (ii) approved the execution, delivery and performance by E*TRADE of the merger agreement and the consummation of the transactions contemplated thereby, including the Merger, and (iii) resolved to recommend adoption of the merger agreement by E*TRADE’s stockholders and that the adoption of the merger agreement be submitted to a vote at a meeting of E*TRADE’s stockholders.

This proxy statement/prospectus contains important information regarding these proposals and factors that E*TRADE stockholders should consider when deciding how to cast their votes. E*TRADE stockholders are encouraged to read carefully this proxy statement/prospectus in its entirety, including the annexes to this proxy statement/ prospectus and documents incorporated by reference into this proxy/prospectus, for more detailed information regarding the merger agreement and the Merger and other transactions contemplated by the merger agreement.

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YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.The Merger between E*TRADE and Morgan Stanley cannot be completed without the adoption of the merger agreement by the affirmative vote, via the E*TRADE meeting website or by proxy, of holders representing a majority of the voting power of the outstanding shares of E*TRADE common stock entitled to vote on the merger agreement proposal as of the record date for the E*TRADE special meeting.

THE ADVISORY COMPENSATION PROPOSAL AND INTERESTS OF E*TRADE’S DIRECTORS AND EXECUTIVE OFFICERS

In considering the recommendations of the E*TRADE board of directors, E*TRADE stockholders should be aware that E*TRADE’s directors and executive officers may have interests that are different from, or in addition to, the interests of E*TRADE stockholders more generally. For more information see “Interests of E*TRADE’s Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 124 of this proxy statement/prospectus.

Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Act, requires that E*TRADE provide its stockholders with the opportunity to vote to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to E*TRADE’s named executive officers in connection with the Merger, as disclosed in this proxy statement/prospectus, including the compensation table and the related narrative named executive officer compensation disclosures set forth in “Interests of E*TRADE’s Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 124 of this proxy statement/prospectus. This vote is commonly referred to as a “golden parachute say on pay” vote.

Accordingly, E*TRADE is seeking approval of the following resolution at the E*TRADE special meeting:

“RESOLVED, that E*TRADE’s stockholders approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to E*TRADE’s named executive officers in connection with the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K in “Interests of E*TRADE’s Directors and Executive Officers in the Merger—Golden Parachute Compensation” beginning on page 124 of this proxy statement/ prospectus (which disclosure includes the compensation table and related narrative named executive officer compensation disclosures required pursuant to Item 402(t) of Regulation S-K).”

E*TRADE stockholders should note that the advisory compensation proposal is merely an advisory vote, which will not be binding on E*TRADE, Morgan Stanley or their respective boards of directors. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Merger is consummated, the eligibility of the E*TRADE named executive officers for such payments and benefits will not be affected by the outcome of the advisory vote.

The proposal to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to E*TRADE’s named executive officers in connection with the Merger is a vote separate and apart from the vote on the proposal to adopt the merger agreement. Accordingly, an E*TRADE stockholder may vote to approve one proposal and not the other. Approval of the advisory compensation proposal is not a condition to the completion of the Merger.

ATTENDANCE AT THE E*TRADE SPECIAL MEETING

To be admitted to the E*TRADE special meeting at www.virtualshareholdermeeting.com/ETFC2020SM, you must enter the 16-digit control number found on your proxy card or voting instruction form. If you do not have a control number, please contact your broker, bank or other nominee as soon as possible so that you can be provided with a control number and gain access to the meeting.

RECORD DATE

The record date for the determination of stockholders entitled to receive notice of and to vote at the E*TRADE special meeting is June 10, 2020. Only E*TRADE stockholders who held shares of common stock of E*TRADE of record at the close of business on June 10, 2020 are entitled to vote at the E*TRADE special meeting and any adjournment or postponement of the E*TRADE special meeting.

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OUTSTANDING SHARES AS OF RECORD DATE

As of the close of business on the record date, there were 221,089,284 shares of E*TRADE common stock outstanding, held by 574 holders of record.

A complete list of E*TRADE stockholders of record entitled to vote at the E*TRADE special meeting will be available for inspection at the principal place of business of E*TRADE at 671 North Glebe Road, Ballston Tower, Arlington, Virginia 22203 during regular business hours for a period of no less than 10 days before the E*TRADE special meeting. If E*TRADE’s headquarters are closed for health and safety reasons related to COVID-19 during such period, the list of stockholders will be made available for inspection upon request via e-mail to IR@etrade.com, subject to E*TRADE’s satisfactory verification of stockholder status. The list of stockholders will also be made available online during the E*TRADE special meeting at the E*TRADE meeting website.

QUORUM

A quorum is necessary to conduct business at the E*TRADE special meeting. A quorum requires the presence at the E*TRADE special meeting of a majority of the outstanding shares of E*TRADE common stock entitled to vote on each matter considered at the E*TRADE special meeting, via the E*TRADE meeting website or represented by proxy.

For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which will include proxies received but marked as abstentions and will exclude broker non-votes. Broker non-votes occur when a beneficial owner holding shares in “street name” does not instruct the broker, bank or other nominee that is the record owner of such stockholder’s shares on how to vote those shares on a particular proposal.

VOTE REQUIRED

The votes required for each proposal are as follows:

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SHARE OWNERSHIP AND VOTING BY E*TRADE’S DIRECTORS AND EXECUTIVE OFFICERS

At the close of business on the record date for the E*TRADE special meeting, E*TRADE’s directors and executive officers had the right to vote approximately 496,280 shares of the then-outstanding E*TRADE common stock at the E*TRADE special meeting, collectively representing approximately less than 1% of the E*TRADE common stock outstanding and entitled to vote on that date. We currently expect that E*TRADE’s directors and executive officers will vote their shares “FOR” Proposal 1 (the merger agreement proposal), “FOR” Proposal 2 (the advisory compensation proposal) and “FOR” Proposal 3 (the adjournment proposal), although they have no obligation to do so.

HOW TO VOTE

E*TRADE stockholders of record as of the close of business on the record date may have their shares voted by submitting a proxy or may vote at the E*TRADE special meeting by following the instructions provided on the enclosed proxy card. E*TRADE recommends that E*TRADE stockholders entitled to vote submit a proxy even if they plan to attend the E*TRADE special meeting.

E*TRADE stockholders who hold their shares beneficially in “street name” and wish to submit a proxy must provide instructions to the broker, bank, trustee or other nominee that holds their shares of record as to how to vote their shares with respect to Proposals 1, 2 and 3. E*TRADE stockholders who hold their shares beneficially and wish to vote at the E*TRADE special meeting must receive a voting instruction form with a 16-digit control number from their broker, bank, trustee or other nominee.

E*TRADE stockholders of record may submit a proxy in one of three ways or vote at the E*TRADE special meeting:

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E*TRADE stockholders are encouraged to submit a proxy promptly.Each valid proxy received in time will be voted at the E*TRADE special meeting according to the choice specified, if any. Executed but uninstructed proxies (i.e., proxies that are properly signed, dated and returned but are not marked to tell the proxies how to vote) will be voted in accordance with the recommendations of the E*TRADE board of directors.

SHARES HELD IN “STREET NAME”

E*TRADE stockholders who hold shares of E*TRADE common stock in a stock brokerage account or through a bank, broker or other nominee (“street name” stockholders) who wish to vote at the E*TRADE special meeting should be provided a voting instruction form by the bank, broker or other nominee that holds their shares. If you are a street name stockholder and this has not occurred, contact the bank, broker or other nominee that holds your shares of record. A number of banks and brokerage firms participate in a program that also permits “street name” stockholders to direct their vote by telephone or over the Internet. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may direct the vote of these shares by telephone or over the Internet by following the voting instructions enclosed with the proxy form from the bank or brokerage firm. The Internet and telephone proxy procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their proxy voting instructions and to confirm that those instructions have been properly recorded. Votes directed by telephone or over the Internet through such a program must be received by 11:59 p.m. Eastern Time, on July 16, 2020. Directing the voting of your shares will not affect your right to vote at the E*TRADE special meeting if you decide to attend the E*TRADE special meeting; however, you must use the 16-digit control number set forth on the voting instruction form received from your bank, broker or other nominee to vote your shares held in “street name” at the E*TRADE special meeting. Voting at the E*TRADE special meeting using the 16-digit control number set forth on the voting instruction form received from your bank, broker or other nominee prior to the deadline described above will automatically cancel any voting directions you have previously given by telephone or over the Internet with respect to your shares.

In accordance with the rules of the Nasdaq, brokers, banks and other nominees who hold shares of E*TRADE common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the merger agreement proposal, the advisory compensation proposal and the adjournment proposal. Accordingly, if brokers, banks or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to these proposals. Under such circumstance, a “broker non-vote” would arise. “Broker non-votes,” if any, will not be considered present at the special meeting for purposes of determining whether a quorum is present at the special meeting, will have the same effect as a vote “AGAINST” the merger agreement proposal and, assuming a quorum is present, will have no effect on the advisory compensation proposal or on the adjournment proposal. Thus, for shares of E*TRADE common stock held in “street name,” only shares of E*TRADE common stock affirmatively voted “FOR” the merger agreement proposal will be counted as a vote in favor of such proposal.

REVOCATION OF PROXIES

E*TRADE stockholders of record may revoke their proxies at any time before their shares are voted at the E*TRADE special meeting in any of the following ways:

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Beneficial owners of E*TRADE common stock may change their voting instruction by submitting new voting instructions to the brokers, banks or other nominees that hold their shares of record or by following the instructions for voting set forth on the voting instruction form with a 16-digit control number provided by their brokers, banks or other nominees and voting at the E*TRADE special meeting.

E*TRADE stockholders that hold their shares in “street name” through a broker, bank or other nominee will need to follow the instructions provided by their broker, bank or other nominee in order to revoke their proxies or submit new voting instructions.

INSPECTOR OF ELECTION

The E*TRADE board of directors has appointed a representative of IOE Services Inc. to act as the inspector of election at the E*TRADE special meeting.

SOLICITATION OF PROXIES

E*TRADE and Morgan Stanley will equally share the proxy solicitation costs related to the E*TRADE special meeting. This includes the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials to E*TRADE stockholders. In addition to sending and making available these proxy materials, some of E*TRADE’s directors, officers and other employees may solicit proxies by contacting E*TRADE stockholders by telephone, by mail, by e-mail or at the E*TRADE special meeting via the E*TRADE meeting website. E*TRADE stockholders may also be solicited by press releases issued by E*TRADE and/or Morgan Stanley, postings on E*TRADE’s or Morgan Stanley’s websites and advertisements in periodicals. None of E*TRADE’s directors, officers or employees will receive any extra compensation for their solicitation services. E*TRADE has also retained Innisfree M&A Incorporated to assist in the solicitation of proxies for a fee expected not to exceed $25,000, plus reasonable out-of-pocket expenses. E*TRADE and Morgan Stanley may also reimburse brokers, banks and other nominees representing beneficial owners of shares of E*TRADE common stock for their expenses in sending proxy solicitation materials to such beneficial owners and obtaining their proxies.

ADJOURNMENTS AND POSTPONEMENTS

The E*TRADE special meeting may be adjourned or postponed, if necessary or appropriate, in the absence of a quorum by the affirmative vote of holders of a majority of the E*TRADE shares having voting power present at the E*TRADE special meeting via the E*TRADE meeting website or represented by proxy at the E*TRADE special meeting. Even if a quorum is present, the E*TRADE special meeting may also be adjourned in order to provide more time to solicit additional proxies in favor of adoption of the merger agreement if sufficient votes are cast in favor of the adjournment proposal. If a sufficient number of shares of E*TRADE common stock is present or represented, via the E*TRADE meeting website or by proxy, and voted in favor of the merger agreement proposal at the special meeting such that the E*TRADE stockholder approval shall have been obtained, E*TRADE does not anticipate that it will adjourn or postpone the special meeting.

Any adjournment or postponement of the special meeting will allow E*TRADE’s stockholders who have already sent in their proxies to revoke them at any time before their use at the E*TRADE special meeting that was adjourned or postponed. If the adjournment is for more than 30 days or if after the adjournment a new record date is set for the adjourned meeting, a notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the special meeting.

OTHER MATTERS

At this time, E*TRADE knows of no other matters to be submitted at the E*TRADE special meeting.

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HOUSEHOLDING OF PROXY STATEMENT/PROSPECTUS

Under SEC rules, a single copy of this proxy statement will be delivered in one envelope to multiple stockholders having the same last name and address and to individuals with more than one account registered at American Stock Transfer & Trust Company, LLC with the same address, unless contrary instructions have been received from an affected stockholder. This procedure, referred to as “householding,” reduces the volume of duplicate materials that stockholders receive and reduces mailing expenses.

You may revoke your consent to future householding mailings or enroll in householding by submitting a written request to E*TRADE’s Corporate Secretary at E*TRADE’s principal offices located at 671 North Glebe Road, Ballston Tower, Arlington, VA 22203-2120. You may also send an email to ir@etrade.com or call E*TRADE at (646) 521-4340.

E*TRADE will promptly deliver, upon verbal or written request, a separate copy of the Notice of Internet Availability and other proxy materials to any stockholder residing at an address to which only a single copy of the documents was originally delivered. Requests for additional copies should be directed to E*TRADE’s Corporate Secretary as described above.

QUESTIONS AND ADDITIONAL INFORMATION

E*TRADE stockholders may contact E*TRADE’s proxy solicitor, Innisfree M&A Incorporated, with any questions concerning the merger agreement or the Merger or the other transactions contemplated by the merger agreement, or the accompanying proxy statement/prospectus, or if they would like additional copies of this proxy statement/prospectus or documents incorporated by reference herein, or need help voting their shares of E*TRADE common stock:

Innisfree M&A Incorporated
501 Madison Avenue, 20^thFloor
New York, New York 10022
Stockholders May Call Toll-Free: (888) 750-5834
Banks & Brokers May Call Collect: (212) 750-5833

E*TRADE stockholders should not return their stock certificates or send documents representing E*TRADE common stock with the enclosed proxy card. If the Merger is completed, the exchange agent for the Merger will send to E*TRADE stockholders a letter of transmittal and related materials and instructions for exchanging shares of E*TRADE common stock.

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THE MERGER

GENERAL

This proxy statement/prospectus is being provided to holders of E*TRADE common stock in connection with the solicitation of proxies to be voted at the E*TRADE special meeting and at any adjournments or postponements of the E*TRADE special meeting. At the E*TRADE special meeting, E*TRADE will ask E*TRADE stockholders to consider and vote on (i) the merger agreement proposal, (ii) the advisory compensation proposal and (iii) the adjournment proposal.

The merger agreement provides for, among other things, the merger of Merger Sub with and into E*TRADE, with E*TRADE continuing as the surviving corporation and a wholly owned subsidiary of Morgan Stanley.The Merger will not be completed unless E*TRADE stockholders approve and adopt the merger agreement.A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus. You are urged to read the merger agreement in its entirety because it is the legal document that governs the Merger. For additional information about the Merger, see “The Merger Agreement—Structure of the Merger” and “The Merger Agreement—Merger Consideration” beginning on pages 94 and 95, respectively, of this proxy statement/prospectus.

If the Merger is completed, each outstanding share of E*TRADE common stock (with certain exceptions described in this proxy statement/prospectus) will be entitled to the right to receive the Common Merger Consideration, without interest and subject to any applicable withholding taxes for cash paid in lieu of fractional shares.Although the number of shares of Morgan Stanley common stock that E*TRADE stockholders will receive in the Merger is fixed, the market value of the Common Merger Consideration will fluctuate with the market price of Morgan Stanley common stock and will not be known at the time that E*TRADE stockholders vote to adopt the merger agreement.Based on the closing price of Morgan Stanley’s common stock on the NYSE on February 19, 2020, the last trading day before the public announcement of the Merger, the 1.0432 exchange ratio represented approximately$58.74 in implied value for each share of E*TRADE common stock. Based on Morgan Stanley’s closing price on June 10, 2020 of $48.69, the 1.0432 exchange ratio represented approximately $50.79 in implied value for each share of E*TRADEcommon stock.The market price of Morgan Stanley common stock when E*TRADE stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of shares of Morgan Stanley common stock on the date of this proxy statement/prospectus or at the time of the E*TRADE special meeting.

THE PARTIES

Morgan Stanley

Morgan Stanley is a global financial services firm that maintains significant market positions in each of its business segments-Institutional Securities, Wealth Management and Investment Management. Morgan Stanley, through its subsidiaries and affiliates, 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. Unless the context otherwise requires, the terms “Morgan Stanley” or the “Firm” mean Morgan Stanley together with its consolidated subsidiaries.

A description of the clients and principal products and services of each of Morgan Stanley’s business segments is as follows:

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Morgan Stanley’s significant regulated U.S. and international subsidiaries include:

Morgan Stanley was originally incorporated under the laws of the State of Delaware on October 1, 1981, and its predecessor companies date back to 1924. Morgan Stanley common stock is traded on the NYSE under the symbol “MS.”

The principal executive offices of Morgan Stanley are located at 1585 Broadway, New York, New York 10036; its telephone number is (212) 761-4000; and its website is www.morganstanley.com.

Based on share ownership of Morgan Stanley that MUFG has disclosed in its filings with the SEC, as of March 23, 2020, MUFG beneficially owned approximately 24% of the outstanding shares of common stock of Morgan Stanley.

This proxy statement/prospectus incorporates important business and financial information about Morgan Stanley from other documents that are not included in or delivered with this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

E*TRADE Financial Corporation

E*TRADE and its subsidiaries provide financial services including brokerage and banking products and services to traders, investors, stock plan administrators and participants, and RIAs. Securities products and services are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Commodity futures and options on futures products and services are offered by E*TRADE Futures LLC (Member NFA). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, a registered investment adviser. Bank products and services are offered by E*TRADE Bank, and RIA custody solutions are offered by E*TRADE Savings Bank, both of which are federal savings banks (Members FDIC). Employee stock and student loan benefit plan solutions are offered by E*TRADE Financial Corporate Services, Inc.

E*TRADE common stock is traded on the Nasdaq under the symbol “ETFC.” Following the Merger, E*TRADE common stock will be delisted from the Nasdaq.

The principal executive offices of E*TRADE are located at 671 North Glebe Road, Ballston Tower, Arlington, VA 22203-2120.

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Additional information about E*TRADE and its subsidiaries are included in documents incorporated by reference into this proxy statement/prospectus. For a list of the documents that are incorporated by reference in this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus.

Moon-Eagle Merger Sub, Inc.

Merger Sub is a wholly owned subsidiary of Morgan Stanley. Merger Sub was formed solely for the purpose of completing the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

Merger Sub was incorporated in the State of Delaware on February 14, 2020. The principal executive offices of Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

Moon-Eagle Merger Sub II, LLC

Second Merger Sub is a wholly owned subsidiary of Morgan Stanley. Second Merger Sub was formed solely for the purpose of completing the Mergers. Second Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Mergers.

Second Merger Sub was incorporated in the State of Delaware on February 24, 2020. The principal executive offices of Second Merger Sub are located at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000.

BACKGROUND OF THE MERGER

As part of their ongoing evaluation of E*TRADE’s business, the E*TRADE board of directors, together with E*TRADE senior management, regularly review E*TRADE’s operations and strategy, competitive position, prospects and opportunities to increase stockholder value. The E*TRADE board of directors and management also monitor developments in the financial services space and the industries serviced by financial services providers, as well as the opportunities and challenges facing participants in those industries. These assessments have included guidance and analysis from E*TRADE’s legal counsel and its financial advisors. In recent years, the financial services industry has experienced increasing competition, commissions cuts, macroeconomic changes and other challenges. In response, E*TRADE has focused on increasing stockholder value by, among other things, adapting its strategic plan to the industry-wide and macroeconomic changes, including by executing strategic acquisitions and integrating those acquisitions into its existing businesses. In 2018, the E*TRADE board of directors, in connection with its annual strategic review process, evaluated E*TRADE’s position in the market and developed views on industry trends, the competitive landscape and customer segmentation within the markets served by E*TRADE. In addition, the E*TRADE board of directors discussed E*TRADE’s organic growth strategy, including opportunities to leverage its existing strengths, expand fee-based assets, develop a banking offering, optimize its marketing, improve operating leverage and develop an open platform. On October 7, 2019, The Charles Schwab Corporation (“Charles Schwab”), one of E*TRADE’s largest competitors, cut its U.S. equity, exchange-traded fund and options base commissions to zero, accelerating the trend of commission reductions in the brokerage industry, with others in the industry, including E*TRADE, making similar reductions shortly thereafter. Then, on November 25, 2019, Charles Schwab and TD Ameritrade Holding Corporation (“TD Ameritrade”) announced that they had entered into a definitive agreement for Charles Schwab to acquire TD Ameritrade in an all-stock transaction valued at approximately $26 billion.

In November 2019, E*TRADE’s management updated its strategic plan and financial forecasts reflecting the changing competitive landscape and incorporating the four key elements for E*TRADE’s future growth of (1) leveraging E*TRADE’s iconic brand, hybrid support model and technology infrastructure, (2) empowering customers through powerful digital offerings and professional guidance, (3) capitalizing on symbiotic institutional channels and (4) maximizing stockholder returns and earnings growth through a dynamic model, and presented the updated strategic plan and financial forecasts to the E*TRADE board of directors at the regularly scheduled meeting held in November. In light of the changing competitive landscape, Rodger Lawson, Chairman of the E*TRADE board of directors, requested that E*TRADE’s financial advisors provide their perspectives on management’s updated strategic plan and general market conditions as part of the E*TRADE board of directors’ ongoing assessment of E*TRADE and its strategy, at a meeting of the E*TRADE board of directors to be held in mid-December.

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On December 11, 2019, Michael Pizzi, Chief Executive Officer of E*TRADE, and James Gorman, Chairman and Chief Executive Officer of Morgan Stanley, had a telephonic conversation about market dynamics in the financial services industry generally, including potential challenges and opportunities for their respective businesses. Messrs. Pizzi and Gorman also discussed, at a high-level, the possibility of a future strategic arrangement between the two companies.

On December 16, 2019, the E*TRADE board of directors held the previously scheduled meeting, at which members of E*TRADE senior management and representatives from J.P. Morgan, E*TRADE’s long-standing financial advisor, and Ardea were present to review management’s updated strategic plan, which management had previously presented to the E*TRADE board of directors at the regularly scheduled November 2019 meeting, and to discuss general market conditions. As part of the E*TRADE board of directors’ ongoing assessment of the industries in which E*TRADE operates and the changing competitive landscape, representatives from J.P. Morgan and Ardea separately reviewed with the E*TRADE board of directors their respective perspectives on E*TRADE’s updated strategic plan and general market conditions, including a general overview of potential strategic alternatives.

On December 18, 2019, Messrs. Pizzi and Gorman met in person to follow up on their telephonic conversation on December 11, 2019. At the meeting, Mr. Gorman expressed an interest in having discussions regarding the possibility of Morgan Stanley and E*TRADE exploring a strategic arrangement. Mr. Gorman indicated that to facilitate any such discussions, it would be helpful for Morgan Stanley to receive certain non-public financial and other information from E*TRADE. Mr. Pizzi responded that Morgan Stanley should provide a list of the information it would like to review.

On December 23, 2019, Messrs. Pizzi and Gorman had a telephonic conversation to follow up on the discussions they had on December 18. Mr. Gorman provided his preliminary views on the strategic benefits of a potential transaction involving E*TRADE and Morgan Stanley and described the information Morgan Stanley would need to further develop its views on such a potential transaction. Messrs. Pizzi and Gorman agreed that E*TRADE and Morgan Stanley would need to enter into a confidentiality agreement as a pre-condition to E*TRADE providing confidential information to Morgan Stanley.

Over the course of the following week, representatives of Skadden, E*TRADE’s outside counsel, and representatives of Davis Polk, Morgan Stanley’s outside counsel, negotiated the terms of the confidentiality agreement between Morgan Stanley and E*TRADE, including the terms of a customary standstill provision binding on Morgan Stanley that permitted Morgan Stanley to communicate confidentially with the Chief Executive Officer of E*TRADE or the Chairman of the E*TRADE board of directors regarding a possible transaction and contained a “fall-away” provision rendering the standstill inapplicable following the public announcement of E*TRADE’s entry into a definitive agreement with a third party to effectuate a business combination transaction pursuant to which any person would acquire a majority of the outstanding shares of common stock of E*TRADE or all or substantially all of the assets of E*TRADE.

In December 2019, E*TRADE had preliminary, high-level discussions with a private firm, which we refer to as “Party A,” regarding the possibility of evaluating the feasibility and benefits of potential strategic transactions involving E*TRADE and Party A. On January 7, 2020, E*TRADE entered into a confidentiality agreement with Party A, which included a customary standstill provision binding on Party A that permitted Party A to communicate confidentially with the Chief Executive Officer of E*TRADE or the Chairman of the E*TRADE board of directors regarding a possible transaction and contained a “fall-away” provision rendering the standstill inapplicable following the public announcement of E*TRADE’s entry into a definitive agreement with a third party to effectuate a business combination transaction pursuant to which any person would acquire a majority of the outstanding shares of common stock of E*TRADE, to allow the parties to discuss these topics and E*TRADE to provide limited, preliminary non-public information to Party A to determine whether further discussions regarding potential strategic transactions would be fruitful. During January and February 2020, E*TRADE management engaged in preliminary discussions and due diligence with representatives of Party A regarding possible strategic transactions as the parties assessed challenges to such transactions. Ultimately, Party A did not provide any proposal to E*TRADE regarding any potential strategic transaction.

On January 8, 2020, Jonathan Pruzan, Executive Vice President and Chief Financial Officer of Morgan Stanley, provided a list of preliminary business and financial due diligence requests to Chad Turner, Chief Financial Officer of E*TRADE, that would help Morgan Stanley develop its perspectives on synergies resulting from a potential strategic transaction between E*TRADE and Morgan Stanley.

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On January 10, 2020, E*TRADE and Morgan Stanley entered into the confidentiality agreement.

On January 14, 2020, E*TRADE gave access to certain members of Morgan Stanley management to a virtual data room with materials responsive to the diligence requests Mr. Pruzan had sent to Mr. Turner on January 8.

Following the execution of the confidentiality agreement and opening of the virtual data room, Messrs. Turner and Pruzan and other representatives of Morgan Stanley spoke on several occasions to discuss the summary financial information E*TRADE had shared and Morgan Stanley’s preliminary perspectives with respect to such information and other related topics of business and finance matters.

On January 16, 2020, the E*TRADE board of directors’ compensation committee held a regularly scheduled meeting jointly with the E*TRADE board of directors. During the meeting, the E*TRADE board of directors received an update on management’s discussions with Morgan Stanley, including details regarding the executed confidentiality agreement and the initial exchange of information with Morgan Stanley.

On January 17, 2020, Mr. Pizzi, Lori Sher, Executive Vice President, General Counsel and Corporate Secretary of E*TRADE, and Mr. Turner met with Mr. Gorman, Mr. Pruzan, Eric Grossman, Executive Vice President and Chief Legal Officer of Morgan Stanley, and Jed Finn, Chief Operating Officer of Morgan Stanley Wealth Management. The representatives of Morgan Stanley expressed their strong interest in a potential business combination with E*TRADE and indicated that, once they had developed a firmer view on potential synergies, they expected to be able to provide a preliminary proposal (which they indicated would be for an all-stock transaction). Mr. Gorman noted that if the parties were able to agree on the key terms of a transaction, including value, Morgan Stanley would desire to move expeditiously toward a definitive agreement.

Later on January 17, 2020, Mr. Pizzi, Mr. Turner and Ms. Sher updated Mr. Lawson on the meeting with Morgan Stanley.

On February 3, 2020, Messrs. Pizzi and Gorman had a telephonic discussion, during which Mr. Gorman advised Mr. Pizzi that Morgan Stanley expected to deliver a preliminary written proposal on February 14. Mr. Gorman informed Mr. Pizzi that the proposal would be for an all-stock merger transaction pursuant to which Morgan Stanley would acquire E*TRADE and that the implied value would be significantly above $50.00 per share. Mr. Gorman subsequently informed Mr. Pizzi that he expected to deliver the preliminary written proposal earlier than previously indicated, on February 12.

Later on February 3, 2020, Ms. Sher sent a note to the E*TRADE board of directors with an update on the latest discussions with Morgan Stanley.

On February 5, 2020, the E*TRADE board of directors held its regularly scheduled quarterly meeting at which members of E*TRADE senior management were present. The E*TRADE board of directors received an update regarding management’s discussions with Morgan Stanley from Mr. Pizzi, Ms. Sher and Mr. Turner. The E*TRADE board of directors discussed with management the general process and other considerations regarding the possible further pursuit of a potential business combination transaction with Morgan Stanley.

On February 7, 2020, Mr. Pruzan provided Mr. Turner with additional due diligence requests, indicating that responsive information would expedite Morgan Stanley’s review for purposes of putting forward a proposal on February 12.

On February 9, 2020, Mr. Grossman and Ms. Sher had a telephonic discussion regarding process considerations. Ms. Sher indicated that, in the event that the parties decided to pursue a potential transaction, E*TRADE would expect to conduct reverse due diligence on Morgan Stanley assuming the transaction was structured as an all-stock transaction. Mr. Grossman and Ms. Sher agreed that the parties would enter into a reverse confidentiality agreement covering the sharing of Morgan Stanley information to facilitate a reverse diligence process.

Over the course of the next several days, representatives of Skadden and Davis Polk negotiated the terms of a reverse confidentiality agreement covering the sharing of Morgan Stanley information. The parties entered into the reverse confidentiality agreement effective as of February 12, 2020.

On or about February 10, 2020, E*TRADE informed J.P. Morgan and Ardea of the possibility of a potential strategic transaction but did not disclose the identity of Morgan Stanley as an interested counterparty at that time.

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On February 12, 2020, E*TRADE received a written non-binding proposal and draft merger agreement from Morgan Stanley for an acquisition of E*TRADE in an all-stock merger transaction at an exchange ratio that would yield an implied value of $56.00 for each share of E*TRADE common stock. Morgan Stanley’s proposal included a fixed exchange ratio which, based on the closing price on February 12, 2020 of E*TRADE common stock, would have been 0.9968 of a share of Morgan Stanley common stock for each share of E*TRADE common stock, representing an implied premium of 26.7% over the closing price of E*TRADE stock on February 12, 2020. Morgan Stanley also reflected in its proposal that an unidentified member of the E*TRADE board of directors would join the Morgan Stanley board of directors effective as of the closing of the transaction.

Later on February 12, 2020, the E*TRADE board of directors held a meeting to discuss the terms of Morgan Stanley’s proposal, with members of E*TRADE senior management and representatives from J.P. Morgan, Ardea and Skadden in attendance. During such meeting, Mr. Pizzi provided an update regarding management’s discussions with Morgan Stanley and described Morgan Stanley’s proposal to the E*TRADE board of directors and representatives of J.P. Morgan and Ardea provided their preliminary views on the financial terms of Morgan Stanley’s proposal. Representatives of Skadden reviewed legal matters, including the fiduciary duties of directors in the context of considering a potential strategic transaction involving E*TRADE such as the Morgan Stanley proposal. After in-depth discussion, the E*TRADE board of directors requested that management and E*TRADE’s advisors conduct further analysis of the proposal from Morgan Stanley and potential alternatives available to E*TRADE, that J.P. Morgan and Ardea proceed with engaging with Morgan Stanley to clarify the assumptions underlying the proposal and that Mr. Pizzi convey to Mr. Gorman the message that the E*TRADE board of directors was actively reviewing the proposal with its advisors and would respond in due course.

Over the course of the next several days, representatives of E*TRADE, J.P. Morgan and Ardea had various calls with representatives of Morgan Stanley in connection with Morgan Stanley’s due diligence of E*TRADE, including the topics of business and finance matters, general legal matters, compliance, IP/IT and regulatory matters. Representatives of E*TRADE, J.P. Morgan and Ardea also had various calls with representatives of Morgan Stanley in connection with E*TRADE’s reverse due diligence of Morgan Stanley, including the topics of business and finance matters, general legal matters, compliance, IP/IT and regulatory matters. In addition, representatives of E*TRADE, J.P. Morgan and Ardea had calls with representatives of Morgan Stanley to clarify the assumptions underlying the February 12 proposal from Morgan Stanley.

On February 16, 2020, the E*TRADE board of directors held a meeting to further discuss the February 12 proposal from Morgan Stanley, with members of E*TRADE senior management and representatives from J.P. Morgan, Ardea and Skadden in attendance. During the meeting, Mr. Pizzi provided an update on his communications with Morgan Stanley. Representatives of J.P. Morgan and Ardea (i) reviewed preliminary financial analyses of the February 12 proposal from Morgan Stanley, (ii) provided their views on the strategic benefits and considerations in connection with the proposal and (iii) provided their views on the benefits and risks associated with potential strategic alternatives that might be available to E*TRADE, including continuing to pursue E*TRADE’s strategic plan on a standalone basis or seeking to engage in discussions with potential additional alternate transaction counterparties. Among other things, J.P. Morgan and Ardea provided their views on the possibility of parties other than Morgan Stanley having an interest in and ability to effect a transaction to acquire E*TRADE and the potential risks to E*TRADE of reaching out to other parties. Representatives of Skadden reviewed legal matters, including fiduciary duties of directors in the context of considering the proposal from Morgan Stanley. Representatives of Skadden also reviewed the terms of and key issues in the draft merger agreement proposed by Morgan Stanley with the E*TRADE board of directors, including the proposed size of the termination fee payable by E*TRADE under certain circumstances, the ability of E*TRADE to terminate the merger agreement in order to accept a superior proposal and the appropriate efforts standard applicable to obtaining necessary regulatory and antitrust approvals.

The E*TRADE board of directors discussed the alternatives potentially available to E*TRADE, including continuing to pursue E*TRADE’s strategic plan on a standalone basis or seeking to engage in discussions with potential additional alternate transaction counterparties, and the relative probability and attractiveness of those alternatives compared to the proposal from Morgan Stanley, including the potential risks to E*TRADE of reaching out to other parties and the potential benefits of using the possibility of doing so to negotiate an improved value from Morgan Stanley. The E*TRADE board of directors also discussed the possibility of, and benefits and downsides of, securing a mechanism to protect against the downside risk of a fixed exchange ratio. After discussion, the E*TRADE board of directors determined that the February 12 proposal was strategically compelling but was not acceptable at

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the proposed exchange ratio. The E*TRADE board of directors instructed management to inform Morgan Stanley that E*TRADE’s financial advisors and Mr. Turner were prepared to work with representatives of Morgan Stanley on reviewing their assessment of the potential synergies to enable Morgan Stanley to improve its proposal. The E*TRADE board of directors also discussed whether to contact any additional parties and determined not to do so at that time in light of various considerations, including the E*TRADE board of directors’ belief as to (i) a low likelihood of significant interest in a transaction by other industry participants at a competitive value, (ii) the risk of jeopardizing a strategically compelling proposal from Morgan Stanley and the absence of other industry participants with a strategic fit as compelling as Morgan Stanley that would justify such risk, (iii) the potential to use discussions solely with Morgan Stanley to obtain a higher value or other better terms than if the process were opened to other third parties and (iv) the belief that if E*TRADE were to contact other industry participants, there was significant risk of potential leaks that could cause disruption to E*TRADE’s business and that could jeopardize keeping Morgan Stanley engaged in pursuing a strategically compelling transaction in light of the concerns that Morgan Stanley had expressed on multiple occasions around potential leaks.

Later on February 16, 2020, Mr. Pizzi called Mr. Gorman and advised him of (i) the E*TRADE board of directors’ determination that Morgan Stanley’s proposal was not acceptable and (ii) E*TRADE’s willingness to work with Morgan Stanley to help it identify synergies to improve its offered value as described above. Mr. Gorman requested that E*TRADE provide a counter-proposal regarding the value at which E*TRADE would be willing to pursue a transaction with Morgan Stanley. Mr. Pizzi informed Mr. Gorman that he would discuss this request with the E*TRADE board of directors.

On February 17, 2020, the E*TRADE board of directors held a meeting to receive an update from management on its discussions with Morgan Stanley, with members of E*TRADE management and representatives of Skadden in attendance. During the meeting, Mr. Pizzi provided an update to the E*TRADE board of directors about the discussion he had with Mr. Gorman following the last E*TRADE board of directors meeting and Mr. Gorman’s request that E*TRADE provide a counter-proposal on value. The E*TRADE board of directors discussed this request, and taking into account the preliminary financial analyses of J.P. Morgan and Ardea, determined that $60.00 in value per E*TRADE share (with the incremental value over the February 12 proposal being provided in additional Morgan Stanley shares or cash) was the appropriate value with which to respond to Morgan Stanley’s proposal at that time, and instructed management to deliver that response to Morgan Stanley.

Later on February 17, 2020, Mr. Pizzi called Mr. Gorman and, as discussed at the earlier E*TRADE board of directors meeting, relayed E*TRADE’s response. Mr. Gorman responded that such a value could not be supported by Morgan Stanley. After further discussion on value, Mr. Gorman asked Mr. Pizzi if a revised proposal in Morgan Stanley stock at an indicative value of $57.50 per E*TRADE share would be acceptable to the E*TRADE board of directors. Mr. Pizzi responded that he did not believe such a proposal would be acceptable to the E*TRADE board of directors. Following further discussion on value, including E*TRADE’s ability to continue paying its quarterly dividend, Mr. Gorman asked if a revised proposal in Morgan Stanley stock at an indicative value of $58.25 per E*TRADE share, but without the ability to continue paying E*TRADE’s quarterly dividend of $0.14 per share, would be acceptable to E*TRADE. Shortly thereafter, Mr. Gorman called Mr. Pizzi to convey a further revised proposal in Morgan Stanley stock at an indicative value of $58.25 per E*TRADE share with the ability of E*TRADE to continue paying its quarterly dividend. Mr. Gorman stated that he did not feel that Morgan Stanley could support a higher price. Mr. Pizzi told Mr. Gorman he would convey this proposal to the E*TRADE board of directors and respond in due course.

The E*TRADE board of directors held another meeting later the same day to discuss Morgan Stanley’s revised proposal, which was for a fixed ratio of Morgan Stanley shares at an indicative value of $58.25 per E*TRADE share (which, based on Morgan Stanley’s five-day volume-weighted average price on the NYSE from February 10, 2020 to February 14, 2020, represented 1.0432 shares of Morgan Stanley common stock for each share of E*TRADE common stock and an implied premium of 31.8% over E*TRADE’s closing price of $44.19 on the Nasdaq on February 14, 2020), with members of E*TRADE management, J.P. Morgan, Ardea and Skadden in attendance. Mr. Pizzi updated the E*TRADE board of directors on his discussions with Mr. Gorman earlier that day, and members of E*TRADE management and representatives of J.P. Morgan and Ardea provided an overview of Morgan Stanley’s revised proposal and a discussion followed on whether there was realistically more value that could be gained from further negotiations with Morgan Stanley. After discussion, the E*TRADE board of directors determined that the value offered by Morgan Stanley in its proposal was compelling and there was not likely to be more value available from

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Morgan Stanley, and that the risk of losing the current Morgan Stanley proposal outweighed the potential benefits that could be derived from the other alternatives that the E*TRADE board of directors had reviewed with management and its advisors over the course of numerous board meetings. As such, the E*TRADE board of directors authorized management to pursue negotiation of a definitive agreement with Morgan Stanley based on an exchange ratio indicative of a $58.25 per E*TRADE share price, and to pursue negotiation of other terms in the merger agreement as had been discussed with the E*TRADE board of directors, including with respect to E*TRADE’s ability to terminate the merger agreement for a superior proposal, the size of the termination fee payable by E*TRADE under certain circumstances, the appropriate efforts standard applicable to obtaining necessary regulatory and antitrust approvals and the reverse termination fee payable by Morgan Stanley in the event of a failure to obtain required antitrust approvals.

Following such meeting of the E*TRADE board of directors, later on February 17, 2020, Mr. Pizzi spoke with Mr. Gorman, and, in accordance with the E*TRADE board of directors’ direction, relayed E*TRADE’s response. They agreed to work expeditiously toward finalizing a definitive agreement.

On February 18, 2020, the E*TRADE board of directors’ audit committee held a regularly scheduled meeting jointly with the E*TRADE board of directors, with members of E*TRADE management and Deloitte & Touche LLP in attendance. Mr. Pizzi updated the E*TRADE board of directors on his conversation with Mr. Gorman and conveyed the desired timeline to execution of a definitive agreement.

Over the course of the next few days, representatives of E*TRADE and Morgan Stanley conducted multiple conference calls to discuss due diligence items. Representatives of Skadden and Davis Polk negotiated the merger agreement. Representatives of the parties further negotiated and reached resolution on the remaining open points in the merger agreement, which included, among other things, size of the termination fee payable by E*TRADE under certain circumstances, the ability of E*TRADE to terminate the merger agreement to enter into a superior proposal, a reverse termination fee payable under certain circumstances by Morgan Stanley for failure to receive required antitrust approvals and the regulatory efforts covenant. Representatives of the parties also completed confirmatory diligence on both E*TRADE and Morgan Stanley.

On February 19, 2020, the E*TRADE board of directors held a meeting to consider the proposed final terms of the merger agreement, with members of E*TRADE senior management and representatives of J.P. Morgan, Ardea and Skadden in attendance. Skadden representatives reviewed legal matters and the proposed terms of the final merger agreement. Representatives of J.P. Morgan and Ardea again reviewed their respective financial analyses in connection with the Merger, and each rendered its oral opinion to the E*TRADE board of directors, subsequently confirmed in its respective written opinion to the E*TRADE board of directors, that, as of the date of such written opinion and based upon and subject to the factors and assumptions set forth in such written opinion, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to the holders of E*TRADE common stock. After discussing the proposed transaction and considering the presentations by Skadden, J.P. Morgan and Ardea, the E*TRADE board of directors unanimously determined (i) it to be in the best interests of E*TRADE’s stockholders, and declared it advisable, to enter into the merger agreement and effect the transactions contemplated thereby, (ii) that the merger agreement be submitted to a vote of E*TRADE’s stockholders at a special meeting to approve and adopt the merger agreement and (iii) that the E*TRADE board of directors recommend that holders of E*TRADE common stock vote to approve and adopt the merger agreement at the E*TRADE special meeting.

Following the respective meetings of the E*TRADE board of directors and the Morgan Stanley board of directors on February 19, 2020, the parties executed the merger agreement on February 20, 2020.

On February 20, 2020, prior to the opening of trading of E*TRADE’s and Morgan Stanley’s stock on the Nasdaq and NYSE, respectively, E*TRADE and Morgan Stanley issued a joint press release announcing the execution of the merger agreement.

CERTAIN RELATIONSHIPS BETWEEN MORGAN STANLEY AND E*TRADE

Morgan Stanley, E*TRADE and their respective affiliates engage in transactions and enter into agreements with each other in the ordinary course of business. No such transaction occurring in the fiscal year ended December 31, 2019, or the two prior fiscal years, had a value in excess of 1% of either party’s consolidated revenues for the fiscal year in which such transaction occurred, nor did all such transactions in the aggregate have a cumulative value in excess of 1% of Morgan Stanley’s consolidated revenues, or 2% of E*TRADE’s consolidated revenues, for the fiscal

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year in which such transactions occurred. Except as described in this proxy statement/prospectus, there are and have been no past, present or proposed material contracts, arrangements, understandings, relationships, negotiations or transactions during the current calendar year or the five immediately preceding calendar years, between Morgan Stanley or its affiliates, on the one hand, and E*TRADE or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer for or other acquisition of securities, the election of directors, or the sale or other transfer of a material amount of assets.

E*TRADE’S REASONS FOR THE MERGER; RECOMMENDATION OF THE E*TRADE BOARD OF DIRECTORS

By unanimous vote at a meeting held on February 19, 2020, the E*TRADE board of directors (i) determined that it is in the best interests of E*TRADE’s stockholders, and declared it advisable, for E*TRADE to enter into the merger agreement and effect the Merger, (ii) approved, adopted and authorized in all respects the execution, delivery and performance of the merger agreement and the transactions contemplated thereby, (iii) resolved to submit the merger agreement to a vote of holders of E*TRADE common stock at the E*TRADE special meeting to approve and adopt the merger agreement and to recommend that holders of E*TRADE common stock vote to approve and adopt the merger agreement at the E*TRADE special meeting.The E*TRADE board of directors unanimously recommends that holders of E*TRADE common stock vote “FOR” the merger agreement proposal, “FOR” the advisory compensation proposal and “FOR” the adjournment proposal.

In evaluating the merger agreement, the Merger and the other transactions contemplated by the merger agreement, the E*TRADE board of directors consulted with E*TRADE’s senior management, outside legal counsel and financial advisors. In recommending that E*TRADE’s stockholders vote their shares of E*TRADE common stock in favor of adoption of the merger agreement, the E*TRADE board of directors also considered a number of factors, including the following (not necessarily in order of relative importance):

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The E*TRADE board of directors also considered a number of uncertainties and risks in its deliberations concerning the Merger and the other transactions contemplated by the merger agreement, including the following (not necessarily in order of relative importance):

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The E*TRADE board of directors considered all of these factors as a whole and believed that, overall, the potential benefits of the Merger to E*TRADE’s stockholders outweighed the uncertainties and risks of the Merger.

The foregoing discussion of factors considered by the E*TRADE board of directors is not intended to be exhaustive, but includes the material factors considered by the E*TRADE board of directors. In light of the variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, the E*TRADE board of directors did not find it practicable to, and did not, quantify, rank or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the E*TRADE board of directors applied his or her own personal business judgment to the process and may have viewed factors differently or given different weight or merit to different factors. The E*TRADE board of directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The E*TRADE board of directors based its recommendation on the totality of the information presented. The E*TRADE board of directors evaluated the factors described above, among others, and reached the conclusion that it is in the best interests of E*TRADE and its stockholders, and declared it advisable, to enter into the merger agreement, and unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the Merger, and resolved to recommend the adoption of the merger agreement by E*TRADE’s stockholders and resolved that the adoption of the merger agreement be submitted to a vote at a meeting of E*TRADE’s stockholders.

IF YOU ARE A HOLDER OF E*TRADE COMMON STOCK, THE E*TRADE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE MERGER AGREEMENT PROPOSAL.

CERTAIN E*TRADE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION

E*TRADE Management Projections of E*TRADE Financial Information

E*TRADE does not normally publicly disclose long-term projections other than through public guidance of limited metrics concerning its expected financial performance in its regular earnings releases and other investor materials due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, in connection with its strategic review, in November 2019, E*TRADE management prepared certain non-public and unaudited non-GAAP standalone financial forecasts (“Initial E*TRADE Forecasts”) derived from a five (5) year model developed by E*TRADE management and reflecting actual results through September 30, 2019, which financial forecasts were presented to the E*TRADE board of directors, and provided to J.P. Morgan and Ardea, for purposes of assessing possible strategic alternatives and not for public disclosure. In January 2020, following the execution of a confidentiality agreement, E*TRADE provided the Initial E*TRADE Forecasts to Morgan Stanley in connection with its due diligence review of E*TRADE.

In February 2020, as part of its quarterly update, E*TRADE management updated its five (5) year model to reflect revised expectations with respect to E*TRADE’s financial performance based on actual results through December 31, 2019 and market developments, including updated interest rate forecasts to reflect a lower forward-looking interest rate outlook as a result of changes in the interest rate environment. E*TRADE management provided the E*TRADE board of directors and J.P. Morgan and Ardea with certain updated non-public and unaudited non-

GAAP standalone financial forecasts prepared by management of E*TRADE (“Updated E*TRADE Forecasts”) and derived from such updated model. In February 2020, E*TRADE provided the Updated E*TRADE Forecasts to Morgan Stanley in connection with its due diligence review of E*TRADE.

At the direction of the E*TRADE board of directors, J.P. Morgan and Ardea used the Updated E*TRADE Forecasts, consisting of unaudited financial projections prepared by E*TRADE management for calendar years 2020 through 2024, and extrapolations of the Updated E*TRADE Forecasts for calendar years 2025 through 2030 prepared at the direction of and approved by E*TRADE’s management (the “E*TRADE Extrapolations” and, together with the Updated E*TRADE Forecasts, the “E*TRADE Projections”) in performing financial analyses in connection with rendering their respective opinions described and summarized in “The Merger—Opinions of E*TRADE’s Financial Advisors” beginning on page 73 of this proxy statement/prospectus. The E*TRADE Projections were the only internal financial forecasts with respect to E*TRADE used by J.P. Morgan and Ardea in performing financial analyses

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in connection with rendering their respective opinions described and summarized in “The Merger—Opinions of E*TRADE’s Financial Advisors” beginning on page 73 of this proxy statement/prospectus. A summary of each of the Initial E*TRADE Forecasts and the E*TRADE Projections is set forth below in Table 1 and Table 2, respectively:

Table 1: Initial E*TRADE Forecasts

Table 2: E*TRADE Projections

E*TRADE Projections Regarding Morgan Stanley

Morgan Stanley does not normally publicly disclose long-term projections due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. E*TRADE management, J.P. Morgan and Ardea were not provided with, and did not have any access to, financial projections of Morgan Stanley prepared by management of Morgan Stanley. However, in connection with evaluation of the Merger, J.P. Morgan and Ardea used certain unaudited financial projections for Morgan Stanley’s calendar years 2020 through 2030 prepared by E*TRADE management based on certain publicly available research analyst projections for calendar years 2020 and 2021 that were highlighted by Morgan Stanley management (the “Research Analyst Forecasts for Morgan Stanley”), with further adjustments made by E*TRADE management (the “Adjusted Research Analyst Forecasts for Morgan Stanley”) and extrapolations of the Adjusted Research Analyst Forecasts for Morgan Stanley for calendar years 2022 through 2030 prepared at the direction of and approved by E*TRADE management (the

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“Adjusted Research Analyst Extrapolations for Morgan Stanley” and, together with the Adjusted Research Analyst Forecasts for Morgan Stanley, the “Adjusted Research Analyst Projections for Morgan Stanley”), in performing financial analyses in connection with rendering their respective opinions described and summarized in “The Merger—Opinions of E*TRADE’s Financial Advisors” beginning on page 73 of this proxy statement/prospectus, which Adjusted Research Analyst Projections for Morgan Stanley were provided to the E*TRADE board of directors in connection with its evaluation of the Merger. The following table presents a summary of the Adjusted Research Analyst Projections for Morgan Stanley:

Important Information about the Unaudited Prospective Financial Information

The inclusion of the unaudited prospective financial information summarized above in “The Merger—Certain E*TRADE Unaudited Prospective Financial Information” beginning on page 69 of this proxy statement/prospectus (collectively, the “Unaudited Prospective Financial Information”) should not be regarded as an indication that any of E*TRADE, Morgan Stanley, J.P. Morgan, Ardea, their respective advisors, or any of their respective affiliates, officers, directors, partners, advisors or other representatives or any other person considered, or now considers, those projections to be predictive of actual future performance or events, or that it should be construed as financial guidance, and the summary of the Unaudited Prospective Financial Information set forth above should not be relied on as such.

While presented with numeric specificity, the Unaudited Prospective Financial Information summarized above is subjective in many respects and reflects numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to E*TRADE’s and Morgan Stanley’s businesses that are inherently subject to significant uncertainties and contingencies, including risks and uncertainties described or incorporated by reference under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 37 and 45, respectively, of this proxy statement/prospectus, all of which are difficult to predict and many of which are beyond the control of E*TRADE and Morgan Stanley and will be beyond the control of the combined company. The Unaudited Prospective Financial Information reflects both assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. There can be no assurance that the Unaudited Prospective Financial Information and the underlying estimates and assumptions will be realized and actual results will likely differ, and may differ materially, from those reflected in the Unaudited Prospective Financial Information, whether or not the Merger is completed.

The Unaudited Prospective Financial Information constitutes forward-looking statements. In addition, because the Unaudited Prospective Financial Information covers multiple years, such information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth above, and important factors that may affect actual results and cause the Unaudited Prospective Financial Information to be inaccurate

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include, but are not limited to, risks and uncertainties relating to Morgan Stanley’s and E*TRADE’s businesses, industry performance, the regulatory environment, general business and economic conditions and other matters described under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 37 and 45, respectively, of this proxy statement/prospectus. As a result, the Unaudited Prospective Financial Information cannot be considered predictive of actual future operating results, and this information should not be relied on as such. E*TRADE and Morgan Stanley stockholders are urged to review the SEC filings of E*TRADE and Morgan Stanley for a description of risk factors with respect to the businesses of E*TRADE and Morgan Stanley, as well as the risks and other factors described or incorporated by reference under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” beginning on pages 37 and 45, respectively, of this proxy statement/prospectus. See also “Where You Can Find More Information” beginning on page 163 of this proxy statement/prospectus. The Unaudited Prospective Financial Information includes certain non-GAAP financial measures.

The Unaudited Prospective Financial Information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. No independent registered public accounting firm has audited, reviewed, compiled, examined, applied or performed any procedures with respect to the Unaudited Prospective Financial Information contained herein, nor have they expressed nor do they express any opinion or any other form of assurance on such information or its achievability. The report of the respective independent registered public accounting firms of E*TRADE and Morgan Stanley contained in their respective Annual Reports on Form 10-K for the year ended December 31, 2019, which have been filed with the SEC and are incorporated by reference into this proxy statement/prospectus, relate to historical financial information of E*TRADE and Morgan Stanley, respectively, and such reports do not extend to the projections summarized above and should not be read to do so. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by E*TRADE and Morgan Stanley may not be comparable to similarly titled amounts used by other companies.

Furthermore, the Unaudited Prospective Financial Information does not take into account any circumstances or events occurring after the date it was prepared. There can be no assurance that, had the Unaudited Prospective Financial Information been prepared either as of the date of the merger agreement or as of the date of this proxy statement/prospectus, similar estimates and assumptions would be used. The Unaudited Prospective Financial Information does not take into account all the possible financial and other effects on E*TRADE or Morgan Stanley of the Merger, the effect on E*TRADE or Morgan Stanley of any business or strategic decision or action that has been or will be taken as a result of the merger agreement, or the effect of any business or strategic decisions or actions which would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the Merger. Further, the Unaudited Prospective Financial Information does not take into account the effect on E*TRADE or Morgan Stanley of any possible failure of the Merger to occur. None of E*TRADE, Morgan Stanley or any of their respective affiliates, officers, directors, partners, advisors or other representatives has made, makes or is authorized in the future to make any representation to any E*TRADE or Morgan Stanley stockholder or other person regarding E*TRADE’s or Morgan Stanley’s ultimate performance compared to the information contained in the Unaudited Prospective Financial Information or that the forecasted results will be achieved. The inclusion of the Unaudited Prospective Financial Information herein should not be deemed an admission or representation by E*TRADE, Morgan Stanley, their respective advisors or any other person that it is viewed as material information of E*TRADE or Morgan Stanley, particularly in light of the inherent risks and uncertainties associated with such information. There can be no assurance that the projected results will be realized or that actual results will not be materially lower or higher than estimated, whether or not the Merger is completed. The summary of the Unaudited Prospective Financial Information included above is not being included to influence any E*TRADE stockholder’s decision on whether to vote in favor of the Merger or any other proposal to be considered at the E*TRADE special meeting, but is being provided solely because it was made available to the E*TRADE board of directors, E*TRADE, Morgan Stanley and E*TRADE’s financial advisors, as applicable, in connection with the Merger.

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READERS OF THIS PROXY STATEMENT/PROSPECTUS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION. E*TRADE AND MORGAN STANLEY DO NOT INTEND TO UPDATE OR OTHERWISE REVISE THE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY LAW.

OPINIONS OF E*TRADE’S FINANCIAL ADVISORS

Opinion of J.P. Morgan Securities LLC

Pursuant to an engagement letter between E*TRADE and J.P. Morgan, E*TRADE retained J.P. Morgan as its financial advisor in connection with the proposed Merger.

At a meeting of the E*TRADE board of directors on February 19, 2020, J.P. Morgan rendered its oral opinion to the E*TRADE board of directors, subsequently confirmed by delivery of J.P. Morgan’s written opinion to the E*TRADE board of directors, dated February 19, 2020, that, as of such date, and based upon and subject to the factors and assumptions set forth in its written opinion, the exchange ratio in the proposed Merger was fair, from a financial point of view, to holders of E*TRADE common stock.

The full text of the written opinion of J.P. Morgan, dated February 19, 2020, which sets forth the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. E*TRADE’s stockholders are urged to read the opinion carefully and in its entirety. J.P. Morgan’s written opinion was addressed to the E*TRADE board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Merger; was directed only to the exchange ratio in the proposed Merger and did not address any other aspect of the proposed Merger. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed Merger to the holders of any other class of securities, creditors or other constituencies of E*TRADE, or as to the underlying decision by E*TRADE to engage in the proposed Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any holder of E*TRADE common stock as to how such stockholder should vote with respect to the proposed Merger or any other matter.

In arriving at its opinion, J.P. Morgan, among other things:

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In addition, J.P. Morgan held discussions with certain members of the management of E*TRADE and Morgan Stanley with respect to certain aspects of the proposed Merger, and the past and current business operations of E*TRADE and Morgan Stanley, the financial condition and future prospects and operations of E*TRADE and Morgan Stanley, the effects of the proposed Merger on the financial condition and future prospects of E*TRADE and Morgan Stanley, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by E*TRADE and Morgan Stanley or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to J.P. Morgan’s engagement letter with E*TRADE, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of E*TRADE or Morgan Stanley under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on the E*TRADE Forecasts, the Adjusted Research Analyst Projections for Morgan Stanley and the Synergies and the financial analyses and forecasts derived therefrom, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the then best currently available estimates and judgments by management of E*TRADE as to the expected future results of operations and financial condition of E*TRADE and Morgan Stanley to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts (including the E*TRADE Forecasts, the Adjusted Research Analyst Projections for Morgan Stanley or the Synergies) or the assumptions on which they were based. J.P. Morgan also assumed that the proposed Merger and the other transactions contemplated by the merger agreement would qualify as a tax-free reorganization for United States federal income tax purposes in discussions with, and materials furnished to J.P. Morgan by, representatives of E*TRADE, and would be consummated as described in the merger agreement, and that the definitive merger agreement would not differ in any material respects from the draft thereof furnished to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by E*TRADE and Morgan Stanley in the merger agreement and the related agreements were and would be true and correct in all respects material to J.P. Morgan’s analysis. J.P. Morgan is not a legal, regulatory or tax expert and has relied on the assessments made by advisors to E*TRADE with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the proposed Merger would be obtained without any adverse effect on E*TRADE or Morgan Stanley or on the contemplated benefits of the proposed Merger.

The projections furnished to J.P. Morgan for E*TRADE were prepared by E*TRADE’s management. E*TRADE does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan’s analysis of the Merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections, please refer to “The Merger—Certain E*TRADE Unaudited Prospective Financial Information” beginning on page 69 of this proxy statement/prospectus.

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion and that J.P. Morgan does not have any obligation to update, revise, or reaffirm its opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, to the holders of the E*TRADE common stock of the exchange ratio in the proposed Merger, and J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed Merger to the holders of any other class of securities, creditors or other constituencies of E*TRADE or as to the underlying decision by E*TRADE to engage in the proposed Merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed Merger, or any class of such

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persons relative to the exchange ratio applicable to the holders of E*TRADE common stock in the proposed Merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which the E*TRADE common stock or Morgan Stanley common stock will trade at any future time. J.P. Morgan was not authorized to and did not solicit any expressions of interest from any other parties with respect to the sale of all or any part of E*TRADE or any other alternative transaction.

The terms of the merger agreement, including the exchange ratio, were determined through arm’s length negotiations between E*TRADE and Morgan Stanley, and E*TRADE’s decision to enter into the merger agreement was solely that of the E*TRADE board of directors. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the E*TRADE board of directors in its evaluation of the proposed Merger and should not be viewed as determinative of the views of the E*TRADE board of directors or the E*TRADE’s management with respect to the proposed Merger or the exchange ratio.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the E*TRADE board of directors on February 19, 2020 and in the presentation delivered to the E*TRADE board of directors on such date in connection with the rendering of such opinion. The summary below does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and, in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

Public Trading Multiples Analysis – E*TRADE Standalone.

Using publicly available information, J.P. Morgan compared selected publicly available financial and market data of E*TRADE with similar publicly available data for the Charles Schwab Corporation, a publicly traded company engaged in a business which, for purposes of its analysis, J.P. Morgan considered to be sufficiently analogous to E*TRADE’s business.

Charles Schwab Corporation is not identical or directly comparable to E*TRADE and may have characteristics that are materially different from those of E*TRADE. The analysis necessarily involves complex considerations and judgments concerning differences in financial and operational characteristics of Charles Schwab Corporation and other factors that could affect Charles Schwab Corporation differently than they would affect E*TRADE. However, Charles Schwab Corporation was selected, among other things, because it is a publicly traded company engaged in operations and business which, for purposes of J.P. Morgan’s analysis, may be considered to be sufficiently analogous in certain respects to E*TRADE’s operations and business or aspects thereof based on J.P. Morgan’s experience and its familiarity with the industries in which the companies operates.

For each of Charles Schwab Corporation and E*TRADE, J.P. Morgan calculated and compared, among other things, the multiples of the company’s share price as of the close on February 18, 2020, to the Wall Street research analyst consensus estimates of the company’s earnings per share (“EPS”) respectively, for calendar years 2020 and 2021 (such multiples, “P/2020E EPS” and “P/2021E EPS,” respectively). Financial data for Charles Schwab Corporation and E*TRADE was based on Charles Schwab Corporation’s and E*TRADE’s respective public filings with the SEC and publicly available Wall Street research analyst consensus estimates for calendar year 2020 and 2021 that J.P. Morgan obtained from FactSet Research Systems.

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Based on the above analysis and other factors which J.P. Morgan considered appropriate based on its experience and judgment, J.P. Morgan selected P/2020E EPS and P/2021E EPS multiple reference ranges for E*TRADE of 12.0x–17.0x and 11.0x–16.0x, respectively. J.P. Morgan then applied these multiple reference ranges, as applicable, to the estimates of E*TRADE’s EPS for calendar years 2020 and 2021 included in the E*TRADE Forecasts. The analysis indicated the following ranges of implied equity values per share of E*TRADE common stock (rounded to the nearest $0.25), which J.P. Morgan compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price per share of E*TRADE’s common stock on February 18, 2020, as follows:

Dividend Discount Analysis – E*TRADE Standalone

J.P. Morgan calculated a range of implied values for E*TRADE common stock by discounting to present value, as of December 31, 2019, the cash amounts estimated to be distributed to E*TRADE stockholders in the form of dividends and share repurchases during each year 2020 to 2029, as reflected in the E*TRADE Forecasts, plus the implied amount of the additional cash distributions E*TRADE would make to its stockholders during each year 2020 through 2029 to achieve a Tier 1 Leverage Ratio of 6.75% (as provided by E*TRADE management) and estimates of the terminal value for E*TRADE at the end of 2029. In performing its analysis, J.P. Morgan utilized, among others, the following assumptions, which were provided, or reviewed and approved, by E*TRADE management:

This analysis implied a range of equity values of $57.75 to $68.75 per share of E*TRADE common stock as of December 31, 2019, rounded to the nearest $0.25, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price per share of E*TRADE’s common stock on February 18, 2020.

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan also performed the dividend discount analysis described above, assuming, at the direction of E*TRADE management, that E*TRADE would achieve only 50% of the projected incremental revenues from its growth plan initiatives. This analysis implied a range of equity values of $50.75 to $60.75 per share of E*TRADE common stock as of December 31, 2019, rounded to the nearest $0.25, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price per share of E*TRADE’s common stock on February 18, 2020.

Selected Transaction Analysis – E*TRADE Standalone

Using publicly available information, J.P. Morgan examined a number of selected transactions involving target companies with businesses or operations that, for purposes of its analysis, J.P. Morgan considered sufficiently similar to E*TRADE’s business or aspects thereof. The transactions indicated in the following table were selected by J.P. Morgan as relevant in evaluating the proposed Merger. Using publicly available information, J.P. Morgan calculated, for each selected transaction, among other things, the multiple of the implied transaction price to the target company’s

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estimated EPS for the four quarter period beginning with the first quarter ended after the announcement of the applicable transaction (“P/NTM EPS”). Financial data for the target companies was based on public filings, FactSet Research Systems and SNL Financial.

Results of this analysis are as follows:

None of the selected transactions reviewed was identical to the proposed Merger. Certain of these transactions may have characteristics that are materially different from those of the proposed Merger. However, the transactions selected were chosen by J.P. Morgan, based on its experience and professional judgment, because their participants, size and certain other aspects of the transactions, for purposes of J.P. Morgan’s analysis, may be considered similar to the participants in, size and certain other aspects of the proposed Merger. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the transactions differently than they would affect the proposed Merger.

Based on the above analysis and other factors that J.P. Morgan considered appropriate in its professional judgment, J.P. Morgan then selected an illustrative P/NTM EPS multiple reference range for E*TRADE of 17.0x to 22.0x. J.P. Morgan then applied that range to the estimate of E*TRADE’s EPS for 2020, as reflected in the E*TRADE Forecasts. This analysis implied a range of equity values of $58.75 to $76.00 per share of E*TRADE common stock as of December 31, 2019, rounded to the nearest $0.25, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price per share of E*TRADE’s common stock on February 18, 2020.

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan also performed a selected transactions analysis by calculating, for each selected transaction, among other things, the multiple of the implied transaction price to the target company’s estimated EPS for the four quarter period ended with the last quarter ended prior to the announcement of the applicable transaction (“P/LTM EPS”). Based on the above analysis and other factors that J.P. Morgan considered appropriate in its professional judgment, J.P. Morgan then selected an illustrative P/LTM EPS multiple reference range for E*TRADE of 18.0x to 25.0x. J.P. Morgan then applied that range to the estimate of E*TRADE’s 2019 EPS, adjusted to reflect the full year impact of zero commission pricing assuming a 27.5% tax rate. This analysis implied a range of equity values of $59.50 to $82.50 per share of E*TRADE common stock as of December 31, 2019, rounded to the nearest $0.25, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price of E*TRADE’s common stock on February 18, 2020.

Public Trading Multiples Analysis – Morgan Stanley Standalone

Using publicly available information, J.P. Morgan compared selected financial and market data of Morgan Stanley with similar data for selected publicly traded companies engaged in businesses which, for purposes of its analysis, J.P. Morgan considered to be sufficiently analogous to Morgan Stanley’s business, including the following selected companies (“Morgan Stanley selected companies”):

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None of the Morgan Stanley selected companies reviewed is identical or directly comparable to Morgan Stanley and may have characteristics that are materially different from those of Morgan Stanley. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the Morgan Stanley selected companies and other factors that could affect the Morgan Stanley selected companies differently than they would affect Morgan Stanley. However, the Morgan Stanley selected companies were selected, among other reasons, because they are publicly traded companies engaged in operations and businesses which, for purposes of J.P. Morgan’s analysis, may be considered to be sufficiently analogous in certain respects to Morgan Stanley’s operations and businesses or aspects thereof based on J.P. Morgan’s experience and familiarity with the industries in which the companies operate.

For each of the Morgan Stanley selected companies and Morgan Stanley, J.P. Morgan calculated and compared, among other things, the multiples of P/2020E EPS and P/2021E EPS, as presented below. Financial data for the Morgan Stanley selected companies and Morgan Stanley was based on the Morgan Stanley selected companies’ and Morgan Stanley’s respective public filings with the SEC and publicly available Wall Street research analyst consensus estimates for calendar year 2020 and 2021 that J.P. Morgan obtained from FactSet Research Systems. Market data was as of the close on February 18, 2020.

Based on the above analysis and other factors which J.P. Morgan considered appropriate based on its experience and judgment, J.P. Morgan selected P/2020E EPS and P/2021E EPS multiple reference ranges for Morgan Stanley of 9.0x–12.5x and 8.0x–12.0x, respectively. J.P. Morgan then applied these multiple reference ranges, as applicable, to the estimates of Morgan Stanley’s EPS for calendar years 2020 and 2021 included in the Adjusted Research Analyst Projections for Morgan Stanley. The analysis indicated the following ranges of implied equity values per Morgan Stanley common stock (rounded to the nearest $0.25), which J.P. Morgan compared to the $55.52 closing stock price per share of Morgan Stanley’s common stock on February 18, 2020, as follows:

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan also performed a public trading analysis based on a regression analysis with respect to Morgan Stanley and the Morgan Stanley selected banks, to review the relationship between (i) the multiple of price to tangible book value (“P/TBV”) and (ii) the estimated 2021 return on average tangible common equity (“CY 2021E ROATCE”) based on public filings, equity research, information J.P. Morgan obtained from SNL Financial and FactSet Research Systems, and the Adjusted Research Analyst Projections for Morgan Stanley. Based on the above analysis and other factors which J.P. Morgan considered appropriate based on its experience and judgment, J.P. Morgan selected a P/TBV multiple reference range of 1.3x to 1.7x for Morgan Stanley. J.P. Morgan then applied that multiple reference range, to Morgan Stanley’s tangible book value per share as of December 31, 2019. This analysis implied an equity value per share of $51.00 to $66.25 per share of Morgan Stanley common stock, rounded to the nearest $0.25, as compared to the $55.52 closing stock price per share of Morgan Stanley’s common stock as of February 18, 2020.

Dividend Discount Analysis – Morgan Stanley Standalone

J.P. Morgan calculated a range of implied values for Morgan Stanley common stock by discounting to present value, as of December 31, 2019, estimates of the cash amounts estimated to be distributed to Morgan Stanley stockholders in the form of dividends and share repurchases during each year 2020 to 2029, as reflected in the Adjusted Research

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Analyst Projections for Morgan Stanley, plus the implied amount of the additional cash distributions Morgan Stanley would make to its stockholders during each year 2020 through 2029 to achieve a supplementary leverage ratio of 6% (as provided by E*TRADE management) at the end of the applicable year based on the Adjusted Research Analyst Projections for Morgan Stanley and estimates of the terminal value of Morgan Stanley at the end of 2029. In performing its analysis, J.P. Morgan utilized, among others, the following assumptions, which were provided, or reviewed and approved by E*TRADE management (except as otherwise noted):

This analysis implied a range of equity values of $59.50 to $69.50 per share of Morgan Stanley common stock as of December 31, 2019, rounded to the nearest $0.25, as compared to the $55.52 closing stock price per share of Morgan Stanley’s common stock as of February 18, 2020.

Relative Value Analysis

Based upon the implied valuations for each of E*TRADE and Morgan Stanley calculated pursuant to the trading multiples analyses and standalone dividend discount analyses described above under “Public Trading Multiples Analysis - E*TRADE Standalone,” “Dividend Discount Analysis - E*TRADE Standalone,” “Public Trading Multiples Analysis - Morgan Stanley Standalone,” and “Dividend Discount Analysis - Morgan Stanley Standalone,” J.P. Morgan calculated a range of implied exchange ratios of a share of Morgan Stanley common stock to a share of E*TRADE common stock and then compared that range of implied exchange ratios to the exchange ratio in the Merger of 1.0432 shares of Morgan Stanley common stock per share of E*TRADE common stock.

For each of the analyses referred to above, J.P. Morgan calculated the ratio implied by dividing the low end of each implied equity value of E*TRADE by the high end of each implied equity value of Morgan Stanley. J.P. Morgan also calculated the ratio implied by dividing the high end of each implied equity value of E*TRADE by the low end of each implied equity value of Morgan Stanley. J.P. Morgan assumed, in each case, that 100% of the Common Merger Consideration would be stock consideration.

This analysis implied the following ranges of exchange ratios, compared in each case to the exchange ratio in the Merger of 1.0432 shares of Morgan Stanley common stock per share of E*TRADE common stock:

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan also performed the relative value analysis described above based upon the implied valuations for each of E*TRADE and Morgan Stanley calculated pursuant to the standalone dividend discount analyses described above under “Dividend Discount Analysis - E*TRADE Standalone” and “Dividend Discount Analysis - Morgan Stanley Standalone,” assuming, at the direction of E*TRADE management, that E*TRADE would achieve only 50% of the projected incremental revenues from its growth plan initiatives. This analysis implied a range of exchange ratios of 0.7328x to 1.0225x, compared to the exchange ratio in the Merger of 1.0432 shares of Morgan Stanley common stock per share of E*TRADE common stock.

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Value Creation Analysis

J.P. Morgan performed a value creation analysis that compared the equity value of E*TRADE (implied by the dividend discount analysis) to the equity value of holders of E*TRADE common stock in the pro forma combined company. J.P. Morgan determined the pro forma combined company equity value by calculating the sum of (i) the range of implied equity values for E*TRADE derived by J.P. Morgan based on its dividend discount analysis described above in “Dividend Discount Analysis -E*TRADE Standalone,” (ii) the range of implied equity values for Morgan Stanley derived by J.P. Morgan based on its dividend discount analysis described above in “Dividend Discount Analysis - Morgan Stanley Standalone,” (iii) the estimated present value of the expected cost Synergies, net of restructuring charges, including one-time transaction fees and (iv) the estimated present value of expected funding Synergies. The value creation analysis at the exchange ratio of 1.0432x provided for in the Merger indicated value creation to the holders of E*TRADE common stock of 8.9% under the midpoint of the implied equity value ranges in (i) and (ii) above. There can be no assurance that the synergies and transaction-related expenses will not be substantially greater or less than the E*TRADE estimate described above.

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan also performed the value creation analysis described above, utilizing, at the direction of E*TRADE management, the range of implied equity values for E*TRADE derived by J.P. Morgan for reference purposes based on the dividend discount analysis described above in “Dividend Discount Analysis - E*TRADE Standalone” conducted assuming E*TRADE would achieve only 50% of the projected incremental revenues from its growth plan initiatives. This analysis indicated value creation to the holders of E*TRADE common stock of 21.8% under the midpoint of the implied equity value ranges in (i) and (ii) above.

Other Information

For reference purposes only and not as a component of its fairness analysis, J.P. Morgan performed the following analyses:

Historical Trading Range for E*TRADE. J.P. Morgan reviewed the historical prices of E*TRADE common stock during the 52-week period prior to February 18, 2020, noting that the low and high closing prices during such period ranged from $35.20 per E*TRADE ordinary share to $51.27 per E*TRADE ordinary share, in each case, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price of E*TRADE’s common stock as of February 18, 2020.

Broker Price Targets for E*TRADE. J.P. Morgan reviewed certain publicly available broker share price targets for E*TRADE common stock, noting that these share price targets ranged from $43.00 per E*TRADE ordinary share to $54.00 per E*TRADE ordinary share, rounded to the nearest $0.25, in each case, as compared to the implied value of the Common Merger Consideration of $57.92 per share of E*TRADE common stock and the $43.79 closing stock price of E*TRADE’s common stock as of February 18, 2020.

Historical Trading Range for Morgan Stanley. J.P. Morgan reviewed the historical prices of Morgan Stanley common stock during the 52-week period prior to February 18, 2020, noting that the low and high closing prices during such period ranged from $39.10 per Morgan Stanley ordinary share to $57.51 per Morgan Stanley ordinary share, in each case, as compared to the $55.52 closing stock price of Morgan Stanley’s common stock as of February 18, 2020.

Broker Price Targets for Morgan Stanley. J.P. Morgan reviewed certain equity research share price targets available on FactSet Research Systems for Morgan Stanley common stock, noting that these share price targets ranged from $45.00 per Morgan Stanley ordinary share to $78.00 per Morgan Stanley ordinary share, rounded to the nearest $0.25, in each case, as compared to the $55.52 closing stock price of Morgan Stanley’s common stock as of February 18, 2020.