Bull and Bear Growth Plan November 2012

A potential growth payment equal to 125% of the rise or the fall in the FTSE 100 Index

This plan is closed to new applications.

  • The Bull and Bear Growth Plan November 2012 is a six year and two week investment.
  • The investment return from the Plan is linked to the performance of the FTSE 100 Index (‘the Index’).

  • If the Final Level of the Index is above its Opening Level, the Plan will make a gross growth payment equal to 125% of the rise in the Index, plus a full return of your capital.

  • If the Final Level of the Index is below its Opening Level but is equal to or above 50% of its Opening Level, the Plan will make a gross growth payment equal to 125% of the fall in the Index, plus a full return of your capital. 

  • If the Final Level is equal to its Opening Level, no growth payment will be made, but your capital will be returned in full. 

  • You will lose some, or all, of your money if the Final Level is below 50% of its Opening Level. In this case, no growth payment will be made and the reduction in your original investment will equal the difference between the Opening Level and the Final Level of the Index.

  • All returns are subject to Counterparty Risk. You could also lose some or all of your money and any growth to which you would otherwise have been entitled in the event that Morgan Stanley B.V., the Issuer of the underlying Securities for the Plan and Morgan Stanley, the Guarantor, fail to make the payments due from the Plan (see Counterparty Risk on page 6 of the brochure).

  • It is our understanding that the returns from this Plan will be subject to Capital Gains Tax (see page 12 of the brochure).

  • This Plan is available for ISA investment in respect of the 2012/13 tax year.

Target Market

This investment could be appropriate as part of an investment portfolio for investors who:

  • have knowledge and experience in equity based investments, 

  • are willing and able to invest for a period of up to six years, and

  • are prepared to accept the investment risk to their capital in return for a higher potential growth than would be available via a deposit based investment.

 

Risks

Investment risks

  • This is a capital-at-risk product (see pages 8, 19 and 20 of the brochure for a detailed description of capital-at-risk products). The capital return at maturity will depend on the performance of the Index.

  • If the Final Level of the Index is more than 50% below its Opening Level, there may be a loss of capital. In this case, the reduction in your original investment will equal the difference between the Opening Level and Final Level of the Index.

  • The investment return you receive will depend on the performance of the Index and it is possible that you might not receive any growth payment at all. Please refer to ‘How an investment return is calculated’ (see page 7 of the brochure).
  • The payment of the maturity proceeds will depend on the closing level of the Index on the 2nd November 2018, as set out in 'How an investment return is calculated' and 'How the capital return is calculated' (see pages 7 and 8 of the brochure). The Plan may therefore be affected by sharp movements in the Index at those times. 
  • This Plan is designed to provide a growth payment and it is not appropriate if you need an income from the capital.

  • This Plan should only be considered as part of your investment portfolio. You should have other savings that you can access immediately and without penalty to meet any emergency cash needs over the investment term.
  • If you tell us that you want to cancel your investment after we have bought the Securities you will only get back the value of the Securities when we sell them, which is likely to be less than your original investment.

  • If your circumstances change and you need to withdraw your investment early we will have to sell your Securities back to the Issuer and the value will depend on the price they are prepared to pay. You will also have to pay an administration charge.
  • In normal market conditions, it is expected that the Issuer will provide pricing of Securities for investors who need access to their capital before the Maturity Date or an early maturity. However, there is no guarantee that you will be able to redeem your investments before maturity.

  • Whilst Morgan Stanley intends to provide a secondary market for this investment, there is no guarantee that this intended liquidity will be available.
  • You need to take account of the fact that inflation will reduce the value of what you receive back.

  • The Opening Level for the Index applies to the Start Date (2nd November 2012) and not the date on which your application form is received. The level may vary significantly between these dates.
  • The values of any tax reliefs will depend on your individual circumstances. You should note that the levels and bases of taxation could change in the future. Such changes may be applied retrospectively.

  • Re-registration of this investment to a new holder may alter the tax implications indicated on page 12 of the brochure.
  • If the Plan matures early you might not be able to reinvest the proceeds to achieve the same, or similar, level of potential investment return.

Counterparty risks

  • The security of your Plan is ultimately dependent on Morgan Stanley B.V. and Morgan Stanley making to us the payments due from the Securities to allow us to pay you any investment return and any repayment of your investment capital.

  • If Morgan Stanley B.V. and Morgan Stanley were to fail to meet the repayments due, you would lose some, or all, of your investment as well as any growth to which you may otherwise have been entitled (see page 6). The actual and perceived ability of Morgan Stanley B.V. as Issuer and Morgan Stanley as Guarantor to meet their obligations may affect the market value of the investment over the term. If Morgan Stanley B.V. and Morgan Stanley fail to meet their obligations, you may get back less than what is due to you or nothing at all. 

  • In addition, the terms of the investment may permit Morgan Stanley B.V. as Issuer to delay, reduce or withhold payments. These provisions are not intended to circumvent what is legally due to investors but are intended to cover unforeseen events which affect your return, for example, a suspension or delay in receiving share prices.

Risks of transferring an ISA

  • Your existing ISA must be transferred in cash, which means your existing ISA Manager will sell the investments held in your current ISA.

  • Your existing ISA Manager may charge you an exit or transfer fee. There is the potential for loss of income or growth if markets should rise while your transfer remains pending.

  • You could lose some interest if you transfer a cash ISA and decide not to wait for the expiry of any notice period.

  • If a cash ISA is transferred into a stocks and shares ISA it cannot be transferred back to a cash ISA at a later date.

  • We will not normally accept ISA transfer applications after 19th October 2012, to allow time for us to receive the proceeds from your existing ISA Manager. However, if they do not send us the funds you have requested before the Start Date, we will not be able to purchase Securities for this Plan on your behalf.

Key Facts

Investment Term

A six year and two week investment with the potential to provide a growth payment equal to 125% of the rise or fall in the Index. The investment return from the Plan is linked to the performance of the FTSE 100 Index.

Availability

As direct investments, stocks and shares ISAs for 2012/13, ISA transfers and for pension funds, trustees and companies.

Investment Return

  • The investment return from the Plan is linked to the performance of the FTSE 100 Index. The Opening Level of the Index will be the close of business level on 2nd November 2012.

  • We will compare the Opening Level with the close of business level of the Index on 2nd November 2018. If the Final Level of the Index is above its Opening Level, the Plan will provide a growth payment equal to 125% of the rise in the Index, i.e. the increase in the Index multiplied by 1.25.

  • If the Final Level of the Index is below its Opening Level but equal to or above 50% of its Opening Level, the Plan will make a growth payment equal to 125% of the fall in the Index, i.e. the fall in the Index multiplied by 1.25. 

  • If the Final Level of the Index is equal to its Opening Level, no growth payment will be payable. 

  • If the Final Level of the Index is below 50% of its Opening Level, no growth payment will be payable. 

Capital Return

  • Your capital return at the Maturity Date on 16th November 2018 will be based on the performance of the FTSE 100 Index and your original capital is not guaranteed to be returned in full. 

  • You will lose some, or all, of your money if the Final Level of the Index is more than 50% below its Opening Level. In this case, your capital will be reduced by the same percentage that the Final Level of the Index is below its Opening Level.

  • The Securities will be issued by Morgan Stanley B.V., a major financial institution with a long term credit rating of 'A-' by Standard and Poor’s as at 13th September 2012. The credit rating is subject to change during the offer period and the term of the investment.

  • If the financial institution were to fail to meet the repayments due to you, you could lose some or all of your investment. Counterparty risk is common to all similar investments.

Tax

Under current tax legislation gains on direct investments will be subject to Capital Gains Tax.

Interest

Interest will be credited on subscriptions received and held in our client account up to the investment date, subject to a de minimis limit of £10.

Charges

  • There are no initial or ongoing charges. Charges are included in the pricing of the investment.

  • Early encashments and transfers during the investment term will be subject to an administration charge.

Commission

3%

Securities

Securities will be structured to provide the returns shown in the plan brochure, and purchased for each investor. These may be notes, warrants, shares or deposits depending on the nature of the investment.

For this product the Securities will be Notes.

Key Dates

Offer period

This plan is closed to new applications.

ISA transfers

Applications must be received by 19/10/2012

Start date

02/11/2012

Opening Level

02/11/2012

Final Level

02/11/2018

Maturity date

16/11/2018

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