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Correspondence

    ab

    UBS AG

    Postfach

    CH-8098 Zürich

    Tel. +41-44-234 11 11

    Group Tax & Accounting Policy

    Todd Tuckner

    Stockerstrasse 64

    Tel. +41-44-234 8280

    Via EDGAR and messenger

    Fax +41-44-234 7361

    todd.tuckner@ubs.com

    Ms. Kathryn McHale

    www.ubs.com

    Assistant Chief Accountant

    Division of Corporation Finance

    United States Securities and Exchange Commission

    100 F Street, N.E.

    Washington, D.C. 20549

October 7, 2010

UBS AG

Form 20-F for the fiscal year ended December 31, 2009

Form 6-K furnished May 4, 2010

Form 6-K furnished July 27, 2010

File Number 001-15060

Dear Ms. McHale:

We respectfully submit the responses set forth below to the comment letter dated September 9, 2010
(the “Comment Letter”) from the staff (the “Staff”) of the Securities and Exchange Commission (the
“Commission”) relating to (a) the annual report on Form 20-F for the fiscal year ended December 31,
2009 (the “2009 Form 20-F”), (b) the first quarter 2010 report on Form 6-K (the “Q1 2010 Form
6-K”), and (c) the second quarter 2010 report on Form 6-K (the “Q2 2010 Form 6-K) of UBS AG (“UBS”
or the “Company”). For your convenience, we have set out the text of each comment contained in the
Comment Letter, followed by our response. As you requested, we have included supplemental
information where applicable.

Comment 1

Form 20-F for the fiscal year ended December 31, 2009

Exhibits, page 21

Exhibit 4.1

We note that Exhibit 4.1 to your form 20-F refers to an Exhibit E, a letter agreement between UBS
and the U.S. government, which does not appear to have been provided. Please be aware that when you
file an agreement pursuant to Instruction 4 to Exhibits on Form 20-F, you are required to file the
entire agreement, including all exhibits, schedules and appendices. Please amend your Form 20-F to
file the full and complete Deferred Prosecution Agreement, including any exhibits, schedules and
appendices which are included in such agreement.

The Deferred Prosecution Agreement (DPA), as filed as Exhibit 4.1 to UBS’s 2009 Form 20-F, was full
and complete in all respects except that it omitted Exhibit E thereto. Exhibit E to the DPA
specifies the characteristics of the U.S. person account information that was delivered by UBS to
the US Department of Justice (DOJ) pursuant to paragraph 9 of the DPA and an order of the Swiss
Financial Market Supervisory Authority (FINMA).

    UBS AG

    Form 20-F for the fiscal year ended December 31, 2009

    Form 6-K furnished May 4, 2010

    Form 6-K furnished July 27, 2010

    File Number 001-15060

    October 7, 2010

    Page 2 of 18

Exhibit E was omitted from the Form 20-F filing because, at the request of the DOJ, that exhibit
was filed under seal pursuant to a court order, which remained in full force and effect at the time
the Form 20-F was filed and remains so today. DOJ applied for and obtained the court’s approval to
seal this document. Without court approval, UBS would not be able to provide the Exhibit to the SEC
or file it as an exhibit to the Form 20-F.

UBS filed the DPA because it is a material agreement to UBS as described in Instruction 4(a) of the
Instructions as to Exhibits in Form 20-F. However, UBS believes that the information contained in
Exhibit E is not material in any respect to the financial condition or financial statements of UBS.

Comment 2

Risk and treasury management

Composition of credit risk – UBS Group, page 119

We refer to your “Credit exposure by business division” table on page 119 which provides a
breakdown of your banking and trading product exposures before and after impairments, credit
valuation adjustments and specific hedges. Please revise your future filings to more clearly define
how your gross credit exposure was determined for each product. For example, the gross credit
exposure for loans in Wealth Management & Swiss Bank, Wealth Management Americas and Other business
divisions appears to equal the carrying value of loans in each of these divisions. However, for
your Investment Bank division you show that the gross credit exposure for loan products is CHF 25.4
million while the carrying value of loans in this division is CHF 90.7 million as of 31 December
2009.

We agree to more clearly define in our future filings how our gross credit exposure was determined
for each product. However, we would like to highlight that in our Annual Report 2009, page 115, we
included a specific section explaining that we have different measures of risk exposure depending
on the purposes for which exposures are calculated: financial accounting under IFRS, determination
of our regulatory capital, or our internal management of the firm.

With respect to the disclosure of our Investment Bank loan exposures, you correctly identify that
there is a difference between the balance sheet carrying value of loans (as reported under IFRS)
and our internal risk view of these exposures. This is primarily driven by adjustments to exclude
margin that we post to counterparties against negative replacement values, prime brokerage cash
accounts and securities that are classified as loans and receivables. We would like to highlight
that on page 122, we included the table “Investment Bank: net banking products exposure to
corporates and other non-banks.” The Investment Bank’s banking products portfolio is defined as
loans and contingent claims and irrevocable commitments. The table specifically identifies the
adjustments required to derive our internal risk view of loans and contingent claims and
irrevocable commitments from the equivalent balance sheet reported exposures. However, we agree to
more clearly define in our future filings the linkage between the various credit exposure tables
and our descriptions of the different exposure measures used.

    UBS AG

    Form 20-F for the fiscal year ended December 31, 2009

    Form 6-K furnished May 4, 2010

    Form 6-K furnished July 27, 2010

    File Number 001-15060

    October 7, 2010

    Page 3 of 18

Comment 3

Composition of credit risk – business divisions, page 120

Investment Bank, page 122

Based on your “Allowances and provisions for credit losses” table on page 126, it appears that the
majority of your loans are held within the Wealth Management & Swiss Bank business division.
However, the Investment Bank also holds a significant portion of your loans (approximately 30% as
of December 2009). In an effort to provide greater transparency and granularity to your
disclosures, please revise your future filings to disclose the composition of the Investment Bank
lending portfolio in a level of detail similar to that disclosed for Wealth Management & Swiss Bank
on page 121.

The “Allowances and provisions for credit losses” table on page 126 shows our balance sheet
reported exposures for loans under IFRS. As discussed in 2 above, our IFRS reported exposures for
Investment Bank loans differ from our internal risk view. In the table “Investment Bank: net
banking products exposure to corporates and other non-banks”, we specifically identify the
adjustments required to derive our internal risk view of loans and contingent claims and
irrevocable commitments from the equivalent balance sheet reported exposures. Furthermore in the
tables on page 123, we provide granular information on our Investment Bank net banking product
exposures by internal rating and loss-given-default (LGD) buckets, by industry sector and also by
geographical region. These disclosures are similar to the level of granularity provided on our
Wealth Management and Swiss Bank banking product and lending portfolios. However, we agree to more
clearly define in our future filings the linkage between the various credit exposure tables and our
descriptions of the different exposure measures used.

Comment 4

Impaired loans, allowances and provisions, page 125

We note that your disclosure in Note 1(a)(11) that for purposes of measuring impairment on
specifically identified impaired loans, you include amounts that may result from restructuring or
liquidation of the collateral in your estimate of expected future cash flows. We also note,
however, that as of 31 December 2009 your allocated allowances represent only 56.3% of your
impaired lending portfolio after considering the estimated liquidation proceeds of the underlying
collateral. Please provide us with more clarity around how estimated liquidation proceeds from
collateralized financial assets are factored into your impairment measurements and explain how you
considered the guidance in paragraph AG84 of IAS 39 when developing your calculation of the present
value of estimated future cash flows.

As detailed in Note 1(a)(11) on page 267 of our Annual Report 2009, UBS applies the principles of
IAS 39 to evaluate individual credit exposures based on the borrower’s character, overall financial
condition, resources and payment record; the prospects for support from any financially responsible
guarantors; and the realizable value of any collateral if applicable. In keeping with the guidance
in paragraph AG84 of IAS 39, the estimated recoverable amount is the present value, using the
loan’s original effective interest rate, of expected future cash flows, including amounts that may
result from restructuring or the liquidation of collateral.

The table “Allowances and provisions for credit losses” on page 126 of our Annual Report 2009
provides information on our lending portfolio, allowances for credit losses, the estimated
liquidation proceeds of collateral and various ratios by business division. You correctly
identified that at 31 December 2009 our allocated allowances represented 56.3% of our impaired
lending portfolio after
considering the estimated liquidation proceeds of collateral. By business division, the comparable
ratio for Wealth Management & Swiss Bank was approximately 77%, whereas for the Investment Bank the
ratio was approximately 49%. The relatively low ratio for the Investment Bank is explained by two
legacy restructured leveraged finance positions with a total carrying value of CHF 1.1 billion for
which the cumulative allowances for credit losses had been written off. The remaining loan balances
on these positions were assessed as largely recoverable and therefore had de minimis remaining
allowances for credit losses at 31 December 2009. Excluding these positions, the Investment Bank’s
allocated allowances would have represented 68% of its impaired loan portfolio. In addition, one of
the legacy restructured leveraged finance loans with a carrying value of CHF 0.9 billion at 31
December 2009, was subsequently sold early in third quarter 2010 at no additional cost to the firm
(i.e. the sale proceeds realized in the market were commensurate with the carrying value).

    UBS AG

    Form 20-F for the fiscal year ended December 31, 2009

    Form 6-K furnished May 4, 2010

    Form 6-K furnished July 27, 2010

    File Number 001-15060

    October 7, 2010

    Page 4 of 18

Comment 5

Notes to the consolidated financial statements

Note 1(a)(11) – Allowance and provisions for credit losses, page 267

Please revise your future filings to more comprehensively disclose your process for collectively
measuring impairment on those loans that have not been specifically identified as impaired.
Consider the following in your revised disclosures:

    •

    Disclose how loans with similar risk characteristics are grouped to be evaluated for loan
collectability (such as loan type, past-due status, and risk);

    •

    Disclose how historical loss rates are determined and what factors are considered when
establishing appropriate time frames over which you evaluate loss experience; and

    •

    Describe any qualitative factors (e.g., industry, geographical, economic, and political
factors) that have affected loss rates or other loss measurements.

We agree to provide more comprehensive disclosure in our future filings on our process for
collectively measuring impairment on those loans that have not been specifically identified as
impaired and to consider the various factors you have identified.

Comment 6

Note 1(a)(14) – Repurchase and reverse repurchase transactions, page 269

We note that securities purchased and sold are generally treated as collateralized financing
transactions. You also disclose that securities delivered under repurchase agreements are not
derecognized from the balance sheet unless the risks and rewards of ownership are relinquished.
Please address the following:

    •

    Tell us and revise your future filings to clearly disclose whether you have derecognized
any securities delivered in your repurchase agreements.

    •

    If you have, provide us the specific facts and circumstances related to these transactions
and provide us your accounting analysis that supports your treatment. Also, provide us with
and revise your future filings to quantify the amount derecognized at each balance sheet date,
the average amount derecognized for the periods presented and discuss how you calculated the
average amount.

We do not derecognize securities delivered in repurchase transactions. Under IFRS, our repurchase
transactions are accounted for as collateralized financing transactions (i.e. UBS does not
relinquish the risk and rewards of ownership of the securities transferred). In future filings, we
will revise our policy description to eliminate the term generally.

    UBS AG

    Form 20-F for the fiscal year ended December 31, 2009

    Form 6-K furnished May 4, 2010

    Form 6-K furnished July 27, 2010

    File Number 001-15060

    October 7, 2010

    Page 5 of 18

Comment 7

Note 11 – Trading portfolio, page 294

We note that you present the debt instruments in both your trading and available-for-sale
investment portfolios in three categories based on the issuers of such securities (e.g., government
and government agencies, banks, corporates and others). In an effort to provide greater
transparency and granularity to your disclosure, please consider disaggregating these categories
into additional classes of financial instruments (for example, by product type). Provide us with
your proposed revised disclosure for future filings, if applicable.

In Note 11 Trading portfolio and Note 13 Financial investments available-for-sale of our financial
statements 2010, we will present carrying amounts for debt instruments held for trading and
available-for-sale by counterparty type (government/ government agencies, banks, corporates and
other) and product type. The product type information we intend to provide will consider
materiality aspects and is expected to present carrying values for bonds (split by government
bills/bonds and corporate bonds, including bonds issued by financial institutions), asset-backed
securities (split by mortgage-backed securities and other), and loans, complemented by fair value
hierarchy information (levels 1 to 3).

Comment 8

Note 13 – Financial Investments available-for-sale, page 296

We note that you present the total net unrealized gains/(losses) for your available-for-sale
investment portfolio as an aggregate (net) amount. Such aggregate presentation does not necessarily
provide a clear indication of your exposure to impairment risk on those securities that are
currently in an unrealized loss position. In the interest of transparency and consistent with the
guidance in paragraph 31 of IFRS 7, please revise your future filings to provide disclosures that
will enable a reader to more clearly assess the extent of your impairment risk exposure on your
available-for-sale investment portfolio. For example, consider revising your disclosure to
separately present gross unrealized losses and gross unrealized gains on investment securities.
Please also consider classifying the gross unrealized losses by duration (e.g., less than 12 months
and greater tha