SecProbe.io

February 11, 2014
 Via E-mail
Sarah M. Starkweather, Esq. Executive Director UBS AG 677 Washington Boulevard Stamford, CT  06901
Re: UBS AG
  424 Prospectuses relating to Registration Statement on Form F-3ASR
Filed January 11, 2012
  File No. 333-178960

Dear Ms. Starkweather:
 We are writing this letter in connection with our selective review of takedowns of
exchange- traded notes (“ETNs”) from sh elf registration statements.  In this letter, we identify
areas where we believe there could be disclosure improvements that would benefit investors.  We are issuing the following comments in an effort to enhance disclosures in your future ETN offerings.

This letter reflects observations from our se lective review of prospectus supplements for
ETN offerings by a number of different financial institutions.  Although we reviewed certain
takedowns from your existing shelf registration statement, we are including comments that may
or may not specifically apply to disclosures with respect to all of your ETN offerings.  If you disagree with a comment or think it does not apply to your ETN program, please explain why in your response letter.
 This letter may not address all of the disclosure issues that could arise in your ETN
offerings.  It is intended only to highlight the issues described in the comments below.  We recommend that you also review our April 2012 samp le comment letter to issuers of structured
notes for additional disclosure matters that may be applicable to ETN offerings.
1

Terms of Offering
 1. We have observed that frequently the prospect us supplement does not clearly describe the
terms of the ETN being offered.  As a result, investors may have difficulty understanding
what they are purchasing and how the ETN operates.  For example, some prospectus supplements use highly complex defined terms without explaining those terms in the

1  The comment letter to issuers of structured notes is available on our website at
http://sec.gov/divisions/corpfin/ guidance/structurednote0412.htm .

Sarah M. Starkweather UBS AG February 11, 2014 Page 2

 context of the ETN, while others do not clearly describe the precise mechanics of the
ETN, including payment at maturity or redemption.  Please revise your prospectus supplements, as appropriate, to disclose th e material terms of each ETN in a clear,
concise and understandable ma nner.  Refer to Rule 421(b) of the Securities Act of 1933.

2. Please revise your prospectus supplements, as appropriate, to disclose whether the ETN
issuer may cease or suspend and restart sales of the notes at any time at the issuer’s discretion.  Also, describe the potential impact these actions may have on the market price and liquidity of the ETNs in the seconda ry market.  Tell us whether you consider
the issuer’s discretion to suspend and restart sa les to be a material risk to investors in the
offering and, if so, please provide appropriate risk factor disclosure in future filings.

Indicative Value

3. We note that some prospectus supplements for ETN offerings state that the “indicative
value” of the ETN will be published on a regular basi s, such as daily, including through
third parties.  Please explain to us the purpose of calculating indicati ve value and why it
is relevant to investors.  Further, tell us whether and where the ETN’s indicative value is
publicly available to any investor without charge and how often it is updated.
 4. We note that some prospectus supplements for ETN offerings include numeric formulas
describing how the indicative value of an ETN is calculated without providing sufficient
narrative explanation as to how the formula works, and therefore how the security’s terms
work.  Please provide narrative disclosure th at describes the inputs and mechanics of such
formulas in a clear, concise and understandable manner so that investors may evaluate
how the terms of the security work and are calculated.
5. If you include information about indicative value in your prospectus supplements, please
also disclose the relationship among the indicative value, the market value of the ETN relative to the initial offering price to the public, and the redemption amount.  Please also provide a risk factor discussing the risk that ETNs may trade at a substantial premium or discount in relation to the value of the ETN determined or disclosed by the issuer (whether as “indicative value” or otherwise) or the redemption amount  of the ETN.
 Redemption Value

6. We have observed that in most ETN offerings, the holder may submit the notes for
redemption at a “redemption value.”  However, the prospectus or prospectus supplement may not clearly disclose the method of determining the redemption value (or amount) for the ETN or indicate whether the redemption value is publicly available prior to an investor’s redemption.  Please revise, as applicable, to disclose this information.

Sarah M. Starkweather UBS AG February 11, 2014 Page 3

 Fees

7. Please revise your disclosure to clearly de scribe all fees that may be charged relating to
the ETNs, including but not limited to, as applicable, annual fees, redemption fees, event risk hedge costs, futures execution costs, and index calculation fees.  Identify the party responsible for payment of each fee, and describe how, if applicable, such fees may change based on the performance of any referenced index or asset.  In addition, please explain when fees are collected and what effect the fees have on the redemption amount and the indicative value of the ETN.
Conflicts of Interest
 8. We note that prospectus supplements for ETN offerings typically include disclosure
about activities of the issuer and its affiliates that may create conflicts of interest, such as
trading activities, hedging, and publishing research reports.  To the extent you or your affiliates engage in activities that create material conflicts of interest, please revise to disclose those activities and the types of conflicts they create.  Also describe the potential impact of such activities and conflicts on the supply, pricing and market for the ETN.
 Outstanding ETNs
 9. We note that issuers of ETNs may provide public information about the number and
dollar amount of outstanding ETNs in a series.  Please disclose where the number and
amount of outstanding ETNs in a series is available to investors at any point in time.

Plan of Distribution
 10. Please provide a detailed explanation of your methods of sale for ETNs, including the
involvement of broker-dealers as initial purchasers of ETNs from the issuer, whether such broker-dealers are identified as underw riters in the prospectus supplement and how
such broker-dealers satisfy prospectus delivery  obligations under the S ecurities Act.  See
Item 508 of Regulation S-K.
 Disclosure Format

11. We note that some prospectus supplements include disclosure for numerous ETN
offerings with different investment profiles.  Considering that different ETNs may have
different features and risks for investors to evaluate, please explain to us why you believe that providing disclosure for multiple ETN offerings in a single prospectus supplement is appropriate.

Sarah M. Starkweather UBS AG February 11, 2014 Page 4

 Security Titles

12. Please evaluate the titles used for your ETNs and avoid titles that may suggest investors
are purchasing equities or other types of securities instead of an unsecured debt
obligation.  For example, titles incorporati ng the term “shares” may suggest that in vestors
are purchasing an equity security, rather than a debt instrument.  In addition, please avoid titles that may suggest you are offering interests in an exchange traded fund registered under the Investment Company Act of 1940.
 Short Sales

13. We note that in some offerings there is disclosure in the prospectus supplement stating
that broker-dealers and other persons may make short sales of ETNs and may cover such
short positions by borrowing ETNs from the issuer or its affiliates.  In some cases the issuer has agreed to repurchase those ETNs.  These activities may impact in the short or long term the number of ETNs outstanding at any point.  Please disclose whether you intend to engage in such activities and if so how you will publicly disclose such loans and repurchases.  Please confirm you will register  these transactions under the Securities Act
of 1933.  If applicable, please provide risk factor disclosure that describes the market impact of short sales and the effect that securities lending may have on the number of ETNs outstanding at any time.
 Regulation M

14. We have observed that a large divergence between the ETN’s market value and the value
of the reference index of the ETN can emerge  (for example, where ETN issuers suspend
further issuances or otherwise limit the availability of newly issued ETNs).  Please explain how your redemptions in such circ umstances comply with the requirements of
Rule 102 of Regulation M.  If these redemptions are done in reliance on no-action letters granting relief from Rule 102 and permitting issuers to redeem an ETN during the ETN’s
distribution
2, please explain how the representation that the market value of the ETN not
vary substantially from the value of th e underlying or reference index is met.

Please respond to this letter within ten  business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circum stances, please tell us why in your response.
After reviewing the information you provide in response to these comments, we may have
additional comments.
 We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings to be certain that the filings include the information the Securities Act and all applicable Securities Act rules require.  Since the company and its management are in possession

2  See e.g. Barclays Bank PLC, Staff No-Action letter (J uly 27, 2006) or Deutsche Bank AG, Staff No-Action
Letter (October 12, 2007).

Sarah M. Starkweather UBS AG February 11, 2014 Page 5

 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:

x the company is responsible for the adequacy and accuracy of the disclosure in the
filings;

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

x the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
 You may contact David Walz at (202) 551-3358 or me at (202) 551-3860 with any
questions regarding these comments.
  Sincerely,  /s/ Amy M. Starr

Amy M. Starr Chief Office of Capital Markets Trends Division of Corporation Finance