SecProbe.io

January 30, 2013

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, 2011
Filed March 15, 2012
Form s 6-K filed July 31, 2012 and October 30, 2012
Response dated September 10, 2012
File No. 001-15060

Dear Mr. Naratil :

We have reviewed your filing s and your response and have the following comments.
We have limited our review to only your financial statements and related disclosures and do not
intend to expand our review to other portions of your documents.  In some of our comments, we
may ask you to provide us with information so we may better unders tand your disclosure.

Please respond to this letter within ten business days by prov iding the requested
information  or by advising 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 disclosures.  If you do not believe our comments apply to your
facts and circumstances, please tell us why in your response.

After reviewing the information you provide in response to these comments,  including
the draft of your proposed disclosures,  we may have  additional comments.

Form 20 -F for Fiscal Year Ended December 31, 2011

Composition of credit risk – business divisions, page 120

Wealth Management & Swiss Bank, page 120

1. We note your response to prior comment 5.  Please provide us with the proposed
disclosures that you intend to provide in your future filings to address our comment .

Tom Naratil
UBS AG
January 30, 2013
Page 2

 Consolidated Financial Statements, page 284

Note 1 – Summary of significant accounting policies, page 297

a) Significant accounting policies, page 297

10) Loans and Receivable s – Renegotiated Loans, page 301

2. We note your response to prior comments 14 and 15.  Please address the following:

 Revise your disclosure in future filings to clarify the differences between loans
renegotiated on concessionary terms and loans renegotiated on a non -
concessionary basis in terms of nonperforming classification and method of
impairment measurement.
 Tell us and revise future filings to disclose wheth er you monitor or segregate
these loans from other non -renegotiated loans within the general collective loan
assessment for purposes of measuring credit losses.  If you do not segregate these
loans from loans that were not previously renegotiated, please t ell us whether you
otherwise take into consideration the fact that these loans have been renegotiated
when measuring credit losses.

Note 16 – Goodwill and intangible assets, page 336

3. We note your response to prior comment 16, including the statement that  you do not
specifically identify the assets and liabilities that make up the excess capital.  Please
confirm that the carrying value of each cash generating unit (CGU) includes only those
assets that can be attributed directly, or allocated on a reasonabl e and consistent basis, to
each CGU and provide a robust explanation of your asset allocation process.  In this
regard, clarify whether you are able to specifically identify the assets that remain in the
Corporate Center after allocations (or conversely, w hether you are able to specifically
identify which assets have been allocated out to the CGUs).    If not, please tell us how
you concluded that you met the criteria in paragraphs 76 of IAS 36.

4. Furthermore, to the extent that you do not identify the speci fic assets and liabilities
directly attributed to each CGU, please tell us how you are able to estimate the cash flows
from such CGUs.  In your response, please address why you believe your methodology
complies with the guidance in paragraph 77 of IAS 36.

5. In your response dated September 16, 2011 you noted that one potential shortfall of the
equity attribution framework was that the attribution process will not always result in
aggregated attributed equity at the segment level being the same as equity attr ibuted to
your shareholders. You further recognized that adjustments would need to be made to
ensure that the carrying amount for purposes of the goodwill impairment test was not less

Tom Naratil
UBS AG
January 30, 2013
Page 3

 than the equity attributable to shareholders and therefore the net carry ing amount of your
assets and liabilities, which you believed was consistent with the premise and
requirements of paragraphs 76 -79 of IAS 36.  Please tell us how your current equity
attribution framework, including how it is used in determining the carryin g value of your
CGUs for purposes of goodwill impairment testing is consistent with your prior response.

Note 21 – Provisions and contingent liabilities, page 341

6. We note your response to the first bullet of prior comment 17.  You state that “the classes
of provisions are the same as the classes of contingent liabilities; however, contingent
liabilities with respect to operational risks, restructuring, loan commitments and
guarantee, and other are either not present or not deemed to merit further disclosu re in the
notes to the financial statements.”  It appears you are saying that for the above classes,
the contingent liabilities are either immaterial or do not exist.  If true, affirmatively state
that in your footnote disclosure in future filings for each  class, as this cannot be inferred
from your current disclosure.

7. We note your response to the second bullet of prior comment 17.  You appear to state that
you have not provided the disclosure required by paragraph 85(a) regarding the timing of
any outfl ows of economic benefits and the disclosures required by paragraph 85(b) for
your restructuring provision based on your determination that the information was not
material.  We note that your restructuring provision increased by CHF 393 million in
2011, wh ich represents over 7% of your pre -tax income.  Please tell us why you believe
the above disclosures are immaterial in the context of your restructuring provision.
Alternatively, please tell us how you will revise future filings to provide the above
discl osures.

8. We note your response to the second bullet of prior comment 17.  You state that you have
provided the disclosure required by paragraph 85(a) regarding the expected timing of any
outflows of economic benefits for your litigation and regulatory matters provi sion class in
Note 21 b).  We are unable to locate this disclosure.  Please direct us to the sentences in
that footnote that you believe satisfy this disclosure requirement.

9. We note your response to the second bullet of prior comment 17.  You state that  you have
provided the disclosure required by paragraph 85(b) about the uncertainties surrounding
the amount or timing of the outflow of economic benefits for your litigation and
regulatory matters provision class in Note 21 b).  We note your disclosure th at “[s]uch
cases are subject to many uncertainties…”  However, other than the uncertainty regarding
whether you will enter into a settlement, as described in the following sentence in your
disclosures, we are unable to locate any further description of the  “many uncertainties” to
which you refer.  We also note your disclosure in the following paragraph regarding the
speculative nature of your legal assessments due to unique fact patterns, novel legal
theories, early stages of adjudications, and unquantified  damages; however, this

Tom Naratil
UBS AG
January 30, 2013
Page 4

 disclosure appears to be in the context of explaining why it is impracticable to estimate
the financial effect of this class’s contingent liability.  However, the practicability
accommodation is not available for the disclosures req uired by paragraph 85(b).
Accordingly, please direct us to the sentences in that footnote that you believe satisfy this
disclosure requirement.

10. We note your response to prior comments 18 and 19.  You state that “paragraph 87 of
IAS 37 places a heavy em phasis on the nature of the items in determining which of them
can be aggregated to form a class.” You also state that you believe the nature of the
provision is the “cause giving rise to the provision” and that “when such causes are
deemed similar because  general statements about their nature and other characteristics of
the items described in [paragraphs 85 and 86 of IAS 37] provide useful information, they
are aggregated … to form class.”

However, paragraph 87 of IAS 37 does not base aggregation on an entity’s ability to
merely make similar “ general  [emphasis added ] statements” about the disclosure
requirements in paragraphs 85 and 86 of IAS 37.  It states that “it is necessary to consider
whether the nature of items is sufficiently similar for a single  [emphasis added ] statement
about them to fulfill the requirements of paragraphs  85(a) and (b) and 86(a) and (b)” of
IAS 37.

Accordingly, as previously requested in prior comment 18, please provide us with a
detailed analysis of how you determined that the individual items in the litigation and
regulatory matters class may be aggregated to form a single class. For each of the 14
matters discussed in Note 21 b), please tell us the following:

 The expected timing of cash out flows and how the expected timi ng for each item
is sufficiently similar that you are able to make a single statement for all matters
in the class.
 The uncertainties in the amount and timing of the outflow of an economic benefit.
Explain whether or not the uncertainties will increase or  decrease the timing or
the amount of the outflow.  In addition, please discuss how the uncertainties in the
amount and timing for each item are sufficiently similar that you are able to make
a single statement for all matters in the class.
 The estimated  financial effects of the contingent liabilities and how the financial
effects for each item are sufficiently similar that you are able to make a single
statement for all matters in the class.  In this regard, we note in your response to
prior comment 21 a nd 22 that it is not practicable to estimate the financial effect
of the contingent liability for some matters, but that you are able to estimate it for
other matters.  We also note from your disclosures that you are unable to estimate
the possible financi al effect due to some combination of the reasons you provide –
in other words, that there is no consistent reason that applies to all matters in this
class.  We further note in your response to prior comment 21 that you have

Tom Naratil
UBS AG
January 30, 2013
Page 5

 recognized a provision for some  of the matters in this class, but not for others.
These differences suggest that the uncertainties associated with the individual
matters in this class may not be sufficiently similar for a single statement to be
made about them.

11. We have considered you r response to prior comment 19.  You state that disaggregation of
loan repurchase demands into a separate class would not “meaningfully augment the
information presented” because you disclose the amount of the provision.  However, we
note that disaggregati on would result in additional disclosures, including a rollforward of
the changes in the provision.  Based on the information disclosed in your filing it
continues to be unclear why you have aggregated loan repurchase demands within your
litigation and reg ulatory matters provision class.  Please provide us with a comprehensive
analysis regarding the similarity of the nature, expected timing, uncertainties in amount
and timing, and estimated financial effect, as described above, to support your
conclusion.

12. We note your responses to prior comments 17, 21, 22 and 23 with respect to your
application of paragraphs 91 and 92 of IAS 37.  We will further consider this information
with the information currently requested.

Note 23 – Derivative instruments and hedge accounting, page 351

Derivatives transacted for trading purposes – Detailed example: Credit derivatives, page 354

13. We note your response to prior comment 25.  Please provide us with the proposed
disclosures that you intend to provide in your future filings to address our comment.

Additional disclosure required under SEC regulations, page 439

D – Information required by industry guide 3, page 445

Impaired and non -performing loans, page 454

14. We note your response to prior comment 26.  Please provide  us with the proposed
disclosures that you intend to provide in your future filings to address our comment.

Tom Naratil
UBS AG
January 30, 2013
Page 6

Form 6 -K filed July 31, 2012

UBS business divisions and corporate center

Corporate Center – Core Function, page 43

Results: 2Q vs. 1Q, page 44

15. We note your response to prior comment 27.  Please provide us with a more detailed
explanation of the specific refinement that was made to your methodology to determine
the change in fair value when the interest rate swaps do not have a fair value  of zero at
inception.   Specifically, tell us whether this was due to a change in how you determine
the fair value of the hedging instrument, at inception or subsequent, and clarify your old
and new methodology so we can better understand the change.   As part of your response,
provide us with background information on the hedge itself (including how many hedges
were affected), the method by which hedge ineffectiveness is assessed and measured, and
the driver for the change in methodology.   Additionally, ple ase clarify whether there was
any change in fair value methodology for any other derivative instruments, in hedging
relationships or not in hedging relationships, which did not have a fair value of zero at
inception, based on your determination to change t he methodology to determine the
change in fair value when interest rate swaps do not have a fair value of zero at
inception.    Provide sufficient details around the change that was made to the valuation of
the hedging instrument, the reason(s) that such ch anges were made, and clarification on
why only certain hedging instruments were impacted.

16. As a related matter, despite your assertion that the prior period hedge ineffectiveness
error was not material to any current or prior period, the actual nature of this error
remains unclear.  Accordingly, please provide us with a detailed response that clearly
describes the nature of the error, the periods that were impacted, and how and when it
was discovered. Please also tell us how you considered whether this err or impacted your
assessment of hedge effectiveness considering the guidance in paragraph 88 of IAS 39.

Risk management and control  – Credit risk, page 50

Exposure to selected European countries, page 54

17. We note your response to prior comment 30.  Please  tell us in more detail what
information you are currently able to track and/or provide based on your current internal
data and systems, and why specifically you are unable to disclose the information
outlined in Topic 4 of the Division of Corporate Financ e’s Disclosure Guidance:
European Sovereign Debt Exposures.   More specifically tell us whether you are able to
quantify the fair values and notional values of credit default contracts purchased and sold

Tom Naratil
UBS AG
January 30, 2013
Page 7

 by country and if so, revise your future filings to disclose such amounts. Please provide
us with the disclosure you intend to provide in future filings.

18. As a related matter, your response to prior comment 30 indicates that your tabular
disclosure on page 55 may include indexed or tranched purchased credit  derivatives.
Please revise your future filings to clearly disclose this fact, separately quantify the
amount of this protection, and disclose how the amounts are reflected in your table
amongst the different countries and counterparties.

19. In your respons e to prior comment 31 you agreed to consider enhancements to your
narrative discussion in futur