SecProbe.io

CORRESP
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SEC Response Letter 11/16/05

Ms.Cecilia D. Blye, Chief

Office of Global Security Risk

Division of Corporation Finance

Securities and Exchange Commission

Washington, D.C. 20549 – 5546

USA
UBS AG

Postfach

CH-8098 Zürich

Tel. +41-44-234 11 11

Clive Standish

Chief Financial Officer

Bahnhofstrasse 45

8001 Zurich

Tel. +41 44 234 4046

Fax. +41 44 234 2100

clive.standish@ubs.com

www.ubs.com

UBS AG HAS CLAIMED
CONFIDENTIAL TREATMENT OF PORTIONS OF THIS LETTER IN

ACCORDANCE WITH 17 C.F.R §200.83.

16 November 2005

Dear Ms Blye

We refer to your letter of 20
September 2005 addressed to our Chief Executive Officer, Peter Wuffli regarding UBS
AG’s Form 20-F for the fiscal year ended 31 December 2004. Set forth below are UBS
AG’s responses to your comment letter. To facilitate your review, we have reproduced
your comment below, in bold, italicized text.

“We note from publicly available sources that last year you were
fined $100 million by the U.S. Federal Reserve as a penalty for engaging in USD
banknote transactions with countries subject to sanctions administered by the
U.S. Treasury Department’s Office of Foreign Assets Control, including
Cuba, Iran and Libya. Please advise us whether you have engaged or currently
engage, directly or indirectly, in other transactions, including financing or
credit arrangements, in or with Cuba, Iran and/or Libya. If so, please briefly
describe for us the nature of your operations and customer relationships in each
country. Advise us whether your customers include or have included the
governments of these countries, or enterprises controlled by the governments of
these countries. In view of the fact that Cuba, Iran and Libya have been
identified by the U.S. State Department as state sponsors of terrorism, and Cuba
and Iran are subject to OFAC-administered economic sanctions, please advise us
of the materiality of your contacts with these countries, and give us your view
as to whether those contacts, individually or in the aggregate, constitute a
material investment risk for your securityholders.

In preparing your response please consider that evaluations of materiality
should not be based solely on quantitative factors, but should include
consideration of all factors that a reasonable investor would deem important in
making an investment decision, including the potential impact of corporate
activities upon a company’s reputation and share value. In this regard, we
note that legislation requiring divestment from, or reporting of interest in,
companies that do business with U.S.-designated state sponsor of terrorism has
been adopted by Arizona and Louisiana.”

     CONFIDENTIAL TREATMENT REQUESTED BY UBS AG
     16 November 2005

Page 2 of 7

As we describe below in
section 1 of this letter, neither UBS AG nor any of its consolidated
subsidiaries (collectively, the “Group”) have any physical presence or
any employees in Cuba, Iran and/or Libya (collectively, the “Subject
Countries”). While we do have some transactions, operations or
relationships involving the Subject Countries (described in general terms in
section 2 and then described specifically by Subject Country in sections 3, 4
and 5 of this letter), (the “Subject Country Activities”), for the
reasons set out in this letter, we do not believe that our Subject Country
Activities, individually or in the aggregate, constitute a material or
potentially material risk to our security holders.

In terms of quantitative
materiality, in our assessment, the Subject Country Activities are immaterial.
Total Client Assets1 held on behalf of clients located in the
Subject Countries as at 31 December 2004 amounted to approximately [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]2 (representing [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]3 of total Client Assets held by the UBS Group as of
that date). Revenues earned from those relationships in 2004 were approximately
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] (representing [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
of Group revenues in the year).

As at 30 September 2005,
total Client Assets held on behalf of clients in the Subject Countries were
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]of total
Client Assets as at that date) and revenues earned from those relationships in
the nine months to 30 September 2005 were [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
(being approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] of total revenues in the
year to date).

By Subject Country, these
figures break down as follows:

_______________________________________________________________________________________________
                                          As at 31.12.2004            As at 30.09.2005
_______________________________________________________________________________________________
                                      Client Assets   Revenues     Client Assets   Revenues
_______________________________________________________________________________________________
Cuba* (see detail in section 3)
______________________________________
Iran* (see detail in section 4)
______________________________________
Libya* (see detail in section 5)
______________________________________  [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
Total*                                  AND FURNISHED SEPARATELY TO THE SECURITIES
______________________________________  AND EXCHANGE COMMISSION]
% of relevant Group total**
______________________________________

__________________

1     For the purposes of this letter, the term
“Client Assets” means all client assets managed or deposited (i.e.,
held by) with UBS including custody-only assets and assets held for purely
transactional purposes. This is consistent with the definition used in the UBS
Group’s financial reporting (see page 11 of the UBS Financial Report 2004
available at http://www.ubs.com/1/e/investors/annual_reporting2004.html ,
and is a wider term than our central measure of “Invested Assets”
(meaning all client assets managed by or deposited with UBS for investment
purposes).

2 Although all figures in this letter are stated in US dollars for
the sake of consistency, this does not mean that the underlying relationships described in
this letter are conducted in or involve transactions in US dollars. Exchange rates used to
convert into US dollars were the prevailing spot rates on the relevant dates to which the
figures relate.

3 All comparisons with wider Group figures have been calculated to
two decimal places.

     CONFIDENTIAL TREATMENT REQUESTED BY UBS AG
     16 November 2005

Page 3 of 7

*= all figures in Thousand
U.S. dollars (but see footnote 2 below)

** For these comparative purposes,
total Client Assets of the UBS Group were [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] (as at 31 December 2004)
and were [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] (as at 30 September 2005). Total revenues of the UBS
Group in 2004 were [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] and were [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] in the nine
months to 30 September 2005

[CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

1.    Physical Presence /
Employees in the Subject Countries

Neither UBS AG nor any of its
consolidated subsidiaries (collectively, the “Group”) have any physical presence
(branch, subsidiary, affiliate or otherwise) in any of the Subject Countries. The Group
has no employees located in any of the Subject Countries.

2.     Business Activities
involving the Subject Countries — Introduction

In the following sections, the
Subject Country Activities undertaken by the Group are described both for the year to 31
December 2004 as well as for the nine month period to 30 September 2005. We have sought to
present the information consistently for each Subject Country and to provide a brief
explanation and relevant figures in summary form.

In all cases, we would emphasize that
all Subject Country Activities mentioned in the following sections are conducted and
relationships are maintained pursuant to procedures designed to ensure that the
relationships are fully compliant with applicable law (including U.S. law if and to the
extent that it is applicable). As the Staff is aware, U.S. sanctions generally are not
legally applicable to UBS’s activities outside the United States. In all cases and
unless otherwise specified, the relationships mentioned are maintained outside the U.S.

For each Subject Country, we deal
with the following:

•

“Government relationships” – by which we refer to business relationships
(if any) with the government of the Subject Country itself as well as business
relationships with entities believed to be controlled by the Government and relationships
with any individual member of the Government in either his or her official or personal
capacity. However, we deal with relationships with banks (including government-owned
banks) in each Subject Country separately and do not therefore include them in this part
of our analysis.

•

“Bank relationships” – by which we refer to business relationships with
banks (including government owned banks) in the Subject Countries. These relationships are
maintained primarily to facilitate routine banking transactions for non-U.S. clients who
undertake transactions themselves with counterparts in the Subject Country (e.g. our
relationship with the Subject Country financial institution allows us to offer our clients
traditional banking services such as the ability to make or receive payments with
counterparts in a Subject Country).

     CONFIDENTIAL TREATMENT REQUESTED BY UBS AG
     16 November 2005

Page 4 of 7

•
“Other
Client relationships” – by which we refer to all other business
relationships we may have with parties (natural persons or legal entities) known
by us to have a business location or residence in a Subject Country. Where this
information is available to us in our systems, we have included relationships
with legal entities situated outside a Subject Country where we know the parent,
ultimate holding company or a material beneficial owner of the entity is known
to reside in a Subject Country. For the avoidance of doubt, we do not include
relationships with nationals of a Subject Country who are not resident in the
Subject Country (including e.g. exiles). The types of relationships we refer to
here may include relationships with both individuals and legal entities and may
involve the provision of individual or corporate banking services, investment
advice, securities and custody accounts, asset management services as well as
collateralised credit facilities secured against assets deposited with the Group
for the purpose of finalising additional investments in securities (i.e.
leveraging).

•
“Financing
or credit arrangements” – by which we refer to trade and export
financing (including e.g. letters of credit, confirmations of financing and
similar) issued by the Group on behalf of clients in connection with the
client’s own dealings with a Subject Country. In this context we give an
indication of total volumes of trade and export finance activity involving the
country in question in the relevant period (being for the year 2004 and for the
six months to 30 June 2005) including the level of financings where the Group
has no economic risk due to syndications or risk participations or insurance by
third parties. We also include any transactions that are only facilitated
without further obligation (i.e. where the Group has no financial involvement
other than collecting/forwarding shipping documents or facilitating transfers
via its network of correspondent banks). We also give a “net risk”
figure for the trade and export finance business as at 31 December 2004 and 30
September 2005. This “net risk” figure reflects UBS’s own
exposure (i.e. excluding exposure that is syndicated to, or participated in by,
third parties or covered by cash collateral) at the relevant date in respect of
the particular Subject Country. Credit facilities granted to clients resident in
a Subject Country for investment purposes are not included in this section
because where such facilities exist, the amounts involved are included within
the figures for “other client relationships” as described above.

In the following analysis and where
necessary we have also provided more detail on other aspects of our Subject Country
Activities where this would not otherwise be not sufficiently covered within the above
categories.

3.     Cuba

______________________________________________________________________________________________________
                                      As at 31.12.2004            As at 30.09.2005
______________________________________________________________________________________________________
                                  Client Assets   Revenues     Client Assets   Revenues
______________________________________________________________________________________________________
Government relationships*
__________________________________
Bank relationships*
__________________________________
Other Client relationships*
__________________________________  [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
Total*                              AND FURNISHED SEPARATELY TO THE SECURITIES
__________________________________  AND EXCHANGE COMMISSION]
% of relevant Group total**
__________________________________
                                  Total Volume     Net Risk as    Total Volume -   Net Risk as at
                                   during 2004     at 31.12.04     6 months to        30.9.05
                                                                     30.6.05
______________________________________________________________________________________________________
Financing / Credit Arrangements*    [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
                                    AND FURNISHED SEPARATELY TO THE SECURITIES
                                    AND EXCHANGE COMMISSION]
______________________________________________________________________________________________________

* = all figures in Thousand U.S.
dollars (but see footnote 2 above)

     CONFIDENTIAL TREATMENT REQUESTED BY UBS AG
     16 November 2005

Page 5 of 7

Other Points to Note
Regarding Cuba:

[CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

4.    Iran

__________________________________________________________________________________________________________
                                      As at 31.12.2004            As at 30.09.2005
______________________________________________________________________________________________________
                                  Client Assets   Revenues     Client Assets   Revenues
______________________________________________________________________________________________________
Government relationships*
__________________________________
Bank relationships*
__________________________________
Other Client relationships*
__________________________________  [CO