SecProbe.io

July 15, 2014

Via E -mail
Tom Naratil
Chief Financial Officer
UBS Group AG
677 Washington Boulevard
Stamford, Connecticut  06901

Re: UBS Group AG
Draft Registration Statement on Form  F-4
Submitted June 17, 2014
And Documents Incorporated by Reference
  CIK No. 0001610520

Dear Mr. Naratil :

We have reviewed your draft registration statement  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 by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  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 the information you provide in response to these  comments  and your
amended draft registra tion statement or filed registration statement,  we may have  additional
comments.

Draft Registration Statement on Form F -4

1. We note that you have submitted a request for exemptive relief from certain US tender
offer rules in connection with the exchange offer. We are continuing to process and
consider that request. Please note that by issuing these comments, we are not taking a
position with respect to your separate request. Further, we will likely issue additional
comments as revisions are made to the ex emptive letter.  Please confirm your
understanding in a response letter.

Tom Naratil
UBS Group AG
July 15, 2014
Page 2

 2. Please see our comment above.  Please confirm that you will conform the statements
made in the registration statement to the parameters outlined in your request letter and to
relief,  if any, that is granted.

3. We note that the exchange offer is to acquire “any and all issued registered shares” of
UBS  AG.  Please tell us what “registered” means in this context.  We note the description
of your capital structure on page 259 of your 2013 Form 20 -F.  To the extent that
“registered” means recorded in your share register, explain to us how the shares that are
not registered in the share register will be treated in the exchange offer.

Cover Page

4. State the minimum tender condition of 90% on  the cover page of the offer materials.

Questions and Answers about the Exchange Offer, page 1

What are the conditions to the exchange offer?,  page 3

5. You indicate  that the conditions specified in clauses 2, 4 and 5 may not be waived.  It is
unclear how  you can proceed without the approvals identified in clause 3.  Please explain.

What will happen if the minimum acceptance condition is waived?, page 3

6. Since you are conducting an exchange offer, please consider the possibility that if you
waive the mini mum acceptance condition to a level where you are not able to squeeze out
remaining minority shareholders of UBS, you may be required to disseminate additional
amended offer materials and extend the offering period beyond the five beyond five
additional bu siness days to allow shareholders time to understand the changes made.
Please confirm your understanding.

7. If possible, revise to provide parameters regarding the possible reduction or waiver of the
minimum acceptance condition. For example, is there a lev el below which you will not
go?

8. The offer materials should be revised where appropriate to discuss your plans for and
ability to conduct a second -step transaction at the lowest possible minimum acceptance
condition contemplated. In addition, any barriers to achieving the stated purpose of the
offer at this lower acceptance level should be explained.

Can I participate in the Swiss offer?, page 7

9. Since US persons may participate in the Swiss offer, tell us how you calculated the
number of UBS Group AG shar es used to calculate the filing fee. This is not clear from
footnote (1) to the fee table on the facing page of the registration statement.

Tom Naratil
UBS Group AG
July 15, 2014
Page 3

 If I decide not to tender, how will the exchange offer affect my UBS Shares?, page 8

10. The disclosure here is confu sing because it seems to imply that UBS and the market for
its shares may continue to exist after the offer. While this may be the case, if you
complete the offer subject to the 90% minimum tender condition, there will be no market
for USB shares going for ward and remaining minority shareholders will be squeezed out.
Please revise to clarify.

Background of the Exchange Offer, page 35

11. Please identify the members of the Group Executive Board who were involved in the
events described in this section.

12. Refer to the following sentence on page 36: “At this meeting, the GEB discussed the
ways in which the implementation of a holding company structure, potentially including
the separation of certain divisions into a separate subsidiary, could address regulat ory
requirements, provide strategic flexibility for the Group and enhance transparency and
accountability of the business divisions.”  Please describe the GEB’s rationale with
respect to how a holding company structure would enhance transparency and
accoun tability of the business divisions , as compared to an organizational structure in
which the business divisions are housed within a single legal entity .

13. We note your disclosure that currently your business divisions and Corporate Center
operate primarily out of UBS AG, as opposed to separate legal entities, and that you are
transitioning towards having “legal entities more closely aligned with business div isions
and regional operations.”  Please describe in greater detail the downside risk of
subsidiarization considered by your GEB and board of directors.  We note, for instance,
the statement on page 54 of your 2013 Form 20 -F that “‘[s]ubsidiarization’ in
Switzerland and elsewhere may create operational, capital, funding and tax inefficiencies
and increase our and counterparties’ credit risk. ”  Similarly, we note the statement on
page 56 of your Form 20 -F that “[s]uch structural changes may negatively impact  our
ability to benefit from synergies between business units [.]”  Please explain each one of
these aspects.

14. Please describe in greater detail “the concessions that would be required from FINMA
and the effects of the UK bank tax levy” to which you refer  on page 37.  Describe the
FINMA rulings that you sought.

15. Please describe in greater detail the “ratings implications” considered by your GEB and
board of directors.

16. Please describe in greater detail the GEB’s assessment of the proposed ring -fenced ent ity
referenced on page 41.

17. Please describe in greater detail the changes that the GEB and board of directors
considered making to “the investment banking booking model.”  We note, for instance,

Tom Naratil
UBS Group AG
July 15, 2014
Page 4

 the following disclosure on page 55 of your 2013 Form 20 -F: “For example, we have
significant operations in the UK and currently use UBS AG’s London branch as a global
booking center for many types of products.  We are being required by the UK Prudential
Regulatory Authority and by FINMA to increase very substantial ly the capitalization of
our UK bank subsidiary, UBS Limited, and expect to be required to change our booking
practices to reduce or even eliminate our utilization of UBS AG London branch as a
global booking center for the ongoing business of the Investmen t Bank. ”  Explain the
rationale for this change.  Also explain the terms “booking practices” and “global
booking center.”

18. Refer to the following sentence on page 42: “ On April 30, 2014, members of the project
team updated the board of directors on the pos sibility of establishing a group holding
company and briefed the board on two alternative means for achieving a group holding
company structure —the first being a share -for-share exchange offer and the second being
the conversion of UBS into a holding compa ny by means of a push -out.”  Please clarify
whether the GEB and/or the board of directors considered any other “ways of achieving a
group holding company effect.”  Describe the pros and cons of those two options and any
other strategic alternatives conside red, and explain why the board ultimately decided on
the share -for-share exchange offer.  Also explain the term “push -out.”

Purpose of the Exchange Offer, page 42

19. Please explain how the series of measures which UBS plans to undertake will “insulate[]
parts of the group to exposure from risks arising in other parts of the group[.]”

20. Refer to the following sentence on page 43: “We anticipate that the exchange offer and
the other measures already announced will allow UBS Group to qualify for a reduction in
the progressive buffer capital requirements applicable to the Group as a systemically
relevant Swiss bank under applicable Swiss ‘too -big-to-fail’ requirements.”  Please
explain and quantify the estimated reduction.

Plans for UBS After the Exchange Off er, page 43

21. Please clarify whether you will still propose the supplementary return to shareholders if
you do not complete the exchange offer.

Material Tax Considerations, page 58

22. We note the disclosure on page 64 that the post -closing dividend “should” be treated, for
U.S. federal income tax purposes, as a dividend or a distribution with respect to UBS
Group Shares but that it is possible that the post -closing dividend “could inste ad be
treated as additional consideration to be received by former shareholders of UBS
pursuant to the exchange transaction.”  Please disclose the reasons for counsel’s
uncertainty, the degree of uncertainty, and the tax consequences in the event that the
dividend is treated as additional consideration in the exchange transaction.  Also clarify
whether there is any such issue with respect to the anticipated post -closing dividend

Tom Naratil
UBS Group AG
July 15, 2014
Page 5

 under the Swiss tax laws.  For guidance, refer to Staff Legal Bulletin No. 19, Legality and
Tax Opinions in Registered Offerings , at Section III.C.4, available on our website  at:
http://www.sec.gov/interps/legal/cfslb19.htm .

Exhibit 5.1

II  Assumptions

23. With respect to the New Shares, it appears that counsel is assuming matters relating to
corporate actions to be taken in the future  and, moreover, is assuming that such actions
will be undertaken “in compliance with Swiss law”  instead of opining on those m atters.
For example, we note the  assumptions  in paragraph (a)  that the registrant’s sole
shareholder “will duly and validly resolve” on the share increase and that the registrant’s
board “will duly and validly resolve ” on the implementation of the share i ncrease and
issuance , all actions  which  appear to be within the registrant’s control  and which underlie
the opinion that the shares will be legally issued, fully paid and non -assessable .  Please
obtain and file a revised opinion that does not include any i nappropriate assumptions.
For guidance, refer to Staff Legal Bulletin No. 19, Legality and Tax Opinions in
Registered Offerings , at Section II.B , available on our website.

III  Opinions

24. It appears that counsel is opining on only the New Shares, as opp osed to the Existing
Shares and the New Shares.  We note from the first page of the opinion letter, however,
that “[t]he Shares subject to the Registration Statement will be comprised of … the
‘Existing Shares’ and … the ‘New Shares.’”  Please explain to u s why an opinion
covering the Existing Shares is unnecessary, or alternatively obtain and file a revised
opinion covering both.

V  Reliance

25. Refer to the following sentence: “ This legal opinion letter is furnished by us, as special
Swiss legal counsel to the Company, in connection with the filing of the Registration
Statement, and, except as provided in the immediately preceding paragraph, it may not be
used by, copied by, circulated by, quoted by, referred to, or disclosed to any party or for
any other pu rpose without our prior written consent. ”  Please obtain and file a revised
opinion that contains no language suggesting a limitation on the ability of investors to
rely on the opinion.

26. Refer to the following sentence: “ This legal opinion letter may only be relied upon on the
express condition that any issues of interpretation or liability arising hereunder will be
governed by the laws of Switzerland. ”  Please obtain and file a revised opinion that does
not include this provision.  The obligation to file t his opinion arises under U.S. law, and it
is inappropriate for counsel to include a provision that may operate  as a disclaimer or
waiver of rights.  See Exchange Act Section 29(a).

Tom Naratil
UBS Group AG
July 15, 2014
Page 6

 Form 20 -F for Fiscal Year End December 31, 2013

Statement of Comprehensiv e Income, page 351

27. We note that you have classified the foreign currency movements related to
comprehensive income attributable to non -controlling interests and comprehensive
income attributable to preferred noteholders as part of the components of other
comprehensive income that will not be reclassified to the income statement.  Please tell
us the drivers of these foreign currency translation amounts for these categories and
provide your analysis of the guidance in IAS 21 that supports your presentation.

Notes to the Consolidated Financial Statements, page 359

Note 26 – Offsetting Financial Assets and Financial Liabilities, page 452

28. We note the line items titled cash collateral receivables on derivative instruments and
cash collateral payables on deriva tive instruments in your offsetting tables, as well as
footnote 1 to the table describing what this balance represents.  Given the description in
footnote 1, please tell us why in all cases the amount of balance sheet netting with gross
assets and gross li abilities exactly offsets in each period for this category.

Note 30 – Interests in Subsidiaries and Other Entities , page 481

a) Interests in subsidiaries, page 481

29. We note that you provide tabular disclosure of your wholly -owned subsidiaries on pages
481 – 482; however, we could not locate any disclosures about the types of structured
entities that you consolidate other than your general consolidation accounting policy on
page 360.  Please consider revising your future filings to provide more specific di sclosure
about the types of structured entities that you consolidate (e.g., managed investment
funds, client investment entities, etc.) and the key factors that trigger consolidation.
Please also revise your future filings to provide the disclosures requi red by paragraphs
14-17 of IFRS 12 related to the risks associated with your interests in such consolidated
structured entities.

General

If you intend to respond to these comments with an amended draft registration statement ,
please submit it and any associated correspondence in accordance with the guidance we provide
in the Division’s October 11, 2012 announcement on the SEC website at
http://www.sec.gov/divisions/corpfin/cfannouncements/drsfilingprocedures101512.htm .

Please keep in mind that we may publicly post filing review correspondence in
accordance with our December 1, 2011 policy
(http://www.sec.gov/divisions/corpfin/cfannouncements/edgarcorrespondence.htm ).  If you
intend to use Rule 83 (17 CFR 200.83) to request confidential treatment of  information in the

Tom Naratil
UBS Group AG
July 15, 2014
Page 7

 correspondence you submit on EDGAR, please properly mark that information in each of your
confidential submissions to us so we do not repeat or refer to that information in our comment
letters to you.

You may contact Angela Connell, Staff Accountant, at (202) 551 -3426 or Stephanie J.
Ciboroski, Senior Assistant Chief Accountant, at (202) 551 -3512  if you have questions regarding
comments on the financial statements and related matters.  Please contact Alexandra M.
Ledbetter, Atto