SecProbe.io

August 22, 2011
 Via E-mail

Tom Naratil Group Chief Financial Officer UBS AG Bahnhofstrasse 45 CH-8001 Zurich, Switzerland
Re: UBS AG
Form 20-F for the Fiscal Year Ended December 31, 2010 Filed March 15, 2011 Form 6-K Filed July 26, 2011
  File No. 001-15060

Dear Mr. Naratil:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  Where we have requested changes in  future filings, please include a draft of your
proposed disclosures that clearly identifies new or revised disclosu res.  If you do not believe our
comments apply to your facts and circumstances or  do not believe an amendment is appropriate,
please tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, including the draf t of your proposed disclosures, we may have
additional comments.    Form 20-F for Fiscal Year Ended December 31, 2010

 Risk management and control, page 116

Impairment and default – distressed claims, page 128
 1. We note that in your retail and corporate banking busine ss in Switzerland you typically
review individual positions for impairment onl y after they have been in arrears for a

 Tom Naratil UBS AG August 22, 2011 Page 2

 certain time.  In future filings, please sp ecify the length of time (e.g., 90 days, 180 day,
etc.) for each loan category that you would wait before evaluating the loan individually
for impairment.
 Regulation and supervisi on in the U.S., page 216

2. We note your brief discussion of the Dodd-Frank Act and th e so-called Volcker rule
which may limit the ability of deposit-taki ng banks to engage in  proprietary trading
activities and invest in hedge funds and private equity.  To  the extent reasonably known,
please clarify the extent to wh ich your proprietary trading act ivities will be subject to the
Volcker rule under the U.S. Dodd-Frank Act.  In this regard, please provide your analysis
of the applicability of the Volcker rule to  your operations con ducted both within and
outside the U.S.

Financial Statements and Notes
 Note 1 – Summary of significan t accounting policies, page 273

 3)  Subsidiaries, page 273

3. We note your accounting policies related to SPE s, including for SPEs that are used to
allow clients to hold investments, those that  are used for securitization when UBS has
assets it sells to an SPE, and SPEs used for credit protection.  We al so note from review
of your Basel II Pillar 3 disclosures on  page 185 that you have done some re-
securitization tran sactions, but it is uncle ar how these transacti ons are accounted for in
your financial statements.  Pl ease tell us the following:
 Whether you consolidate any of your re-secu ritization vehicles, and provide us with
your accounting analysis to support the non-c onsolidation of any of these vehicles.
 Quantify the total assets of your re-securi tization vehicles and amount of securities
that were re-securitized in the periods presen ted.  To the extent that certain of your re-
securitization transactions are consolidated  and certain are not, please separately
quantify the amounts for each type.
 Tell us whether your clients request the re-securitization, and if so, the types of
parties that request your a ssistance in performing the re -securitization, and discuss
their role in the design of the vehicle and th e structure of the secu rities to be issued.
 Tell us whether there are situations in which you are doing re-securitizations for your
own liquidity or capital purpos es, and tell us the other parties involved that have
discretion over the design of the vehicle.
 24) Equity participation and ot her compensation plans, page 284

4. We note your disclosure that plans contai ning voluntary termination and non-compete
provisions and no vesting conditi ons are considered vested at  the grant date because no

 Tom Naratil UBS AG August 22, 2011 Page 3

 future service is requ ired.  In these cases, compensa tion expense is fully recognized on
the grant date or is recognized in a peri od prior to the grant da te if the bank can
substantiate that the award is  attributable to past servic e and the amount can be reliably
estimated.  We also note your disclosure on page 352 that compensation for all SESAP
and SESOP awards is recogni zed during the performance ye ar, which is generally the
period prior to the grant date, as well as your disclosure that compensation expense for
your cash balance plan is recognized in the performance year, which is generally the
period prior to the grant date.  Please te ll us in more detail how you believe you can
reliably estimate the expense prior to the grant date and tell us the typical time period involved between expense measurement and the grant date.

(b) Changes in accounting polic ies, comparability and other adjustments, page 288

 Equity and Other comprehensive income, page 289

5. We note your disclosure on page 41 where you state that you recognized an out-of-period
credit of CHF 592 million resulting from th e correction of prior period misstatements,
and that your total comprehensive income attributable to UBS shareholders for the year ended December 31, 2010 was CHF 5.9 billion (and a CHF 3.3 billion loss for the year ended December 31, 2009).  We fu rther note your disclosure on page 289 that the foreign
currency balance was adjusted by CHF 592 m illion and that it increased total other
comprehensive income by CHF 592 million a nd total comprehensive income by CHF 429
million because a loss of CHF 163 million was tr ansferred to the income statement.
However, we were unable to locate a discussion describing the nature of the
misstatements or an understanding of how the misstatements occurred or were identified.
Please respond to the following:
 Tell us the nature of the misstatements id entified and separately  quantify the amount
of each misstatement by type;
 Tell us how the misstatements were identifie d.  As part of your response, please tell
us whether changes were made to your intern al controls over fi nancial reporting to
prevent these types of misstatements in the future;
 Quantify the amount of the misstatements by period; and
 Tell us whether you prepared a SAB 99 materiality analysis supporting your
conclusion that the misstatements were not ma terial.  If so, please provide us with
your analysis.
 Note 16 – Goodwill and intangible assets, page 309

6. We note your disclosure on page 309 that the carrying amount for each segment is
determined by reference to the Equity Attr ibution framework, and within the framework,
management attributes equity to the businesse s after considering thei r risk exposure, asset
size, goodwill and intangible assets.  We note that prio r to 2010, you determined the

 Tom Naratil UBS AG August 22, 2011 Page 4

 carrying value of the cash-generating units by a roll-forward of the historic carrying
amount.  Please respond to the following:
 Please tell us whether the amounts of equity  attributed to each cash-generating unit
under the Equity Attribution framework differed significantly from the amounts
previously determined for each of the cas h-generating units under the roll-forward
method.  If so, please quantity those amounts,  and tell us how you concluded that the
new amounts allocated are be tter reflective of the ca rrying amounts of the cash-
generating units.
 We note your disclosure on page 159 s howing the average amount of equity
attributed to each of the segments as co mpared to total average equity at the
consolidated level.  We also note your disc losure on page 158, that where total equity
attributed to the businesses differs from  the Group’s actual equity during a given
period, the surplus or deficit is reflected in Treasury activitie s and other corporate
items. Please clarify whether that mean s for purposes of your goodwill impairment
test you would use the equity attributed  to each segment/cash-generating unit under
the Equity Attribution framework even t hough the total would be in excess/less than
total shareholders’ equ ity.  If so, please tell us in mo re detail why you believe that is
the most appropriate way to determine the carrying value of  your cash-generating
units.   As part of your response, please address the guidance in paragraphs 76-79 of
IAS 36.

Additional disclosure required under SEC regulations, page 408

7. We note your disclosure of operating profit be fore tax per share in  the table providing
additional disclosure required under SEC regulat ions.  We did not locate the use of this
measure in other places of your document.  Gi ven that this measure is not required under
SEC regulations, and would potentially appe ar to be a non-GAAP measure, please
consider removing the measure in future fili ngs to the extent you are including it solely
because you believe it is required by SEC regul ations.  If you believe the use of this
measure is appropriate, please c onsider relocating the measure or including it as part of
your consolidated financial statements along with the disclosures required by paragraph
73 of IAS 33.

 Tom Naratil UBS AG August 22, 2011 Page 5

Form 6-K filed July 26, 2011

Risk management and control, page 38
 Exposures to sovereign of select ed industrialized European count ries rated AA and below, page
41
8. We note your disclosure of the CHF 116 million of Greek sovereign exposures as of June
30, 2011.  Please tell us how the Greek expos ures are accounted for (loans and
receivables, held for tr ading, etc.).  To the extent that any of the Greek exposures are not
held for trading or designated under the fa ir value option, please tell us whether you
recognized any credit impairment on these e xposures during the three months ended June
30, 2011.  If not, please tell us how you conc luded that an impairment event has not
occurred under paragraph 58 of  IAS 39.  Finally, please tell us whether you have written
any credit protection on Greek bonds .  If so, please tell us wh ether the notional value of
protection written is included in the CHF 116 million of Greek exposures.

Note 11 – Fair value of financial instruments, page 75

(b) Valuation information, page 78
9. We note your disclosure that during the second quarter of 2011, you corrected the own
credit effect calculation to capture the vol ume effect of foreign currency movements on
life-to-date own credit si nce initial recognition, and this co rrection contributed to an own
credit loss of CHF 77 million.  You also noted a further change due to certain
collateralized liabilities that were identified as having become insensitive to changes in
your credit spread, resulting in a CHF 37 million increase in your own credit loss.  Please
respond to the following:
 Tell us how the error was identified and describe in further detail how you new
calculation captures the volume effect of  foreign current movements on your own-
credit calculation;
 Tell us in more detail about the change made to certain collateralized liabilities and
clarify the reasons why you believe the collat eralized liabilities became insensitive to
your credit spreads.  As part of your response, please confirm that your prior
methodology was capturing the existence of collateral for all of  your liabilities,
including for these liabiliti es, (as you describe on page 331 of your 2010 Form 20-F)
when measuring the effect of your  own-credit adjustment; and
 Tell us whether you performed an assessment of the effect of these changes on your
prior period financial statements or whet her you believe such assessment is not
necessary.

 Tom Naratil UBS AG August 22, 2011 Page 6

              We urge all persons who are res ponsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.                In responding to our comments, please provide a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Yolanda Trot ter, Staff Accountant, at (202) 551-3472 or me at (202)
551-3512 if you have any questions.
Sincerely,
  /s/ Stephanie L. Hunsaker

 Stephanie L. Hunsaker
Senior Assistant Chief Accountant