Litigation, regulatory and similar matters

6 Months Ended

Jun. 30, 2021

Disclosure Of Litigation Regulatory And Similar Matters [Line Items]

Disclosure Of Contingent Liabilities Explanatory

b) Litigation, regulatory and similar matters

The Group operates in a legal and regulatory environment that

exposes it to significant litigation and similar risks arising from

disputes and regulatory proceedings. As a result, UBS (which for

purposes of this Note may refer to UBS Group AG and/or one or

more of its subsidiaries, as applicable) is involved in various

disputes and legal proceedings, including litigation, arbitration,

and regulatory and criminal investigations.

Such matters are subject to many uncertainties, and the

outcome and the timing of resolution are often difficult to

predict, particularly in the earlier stages of a case. There are also

situations where the Group may enter into a settlement

agreement. This may occur in order to avoid the expense,

management distraction or reputational implications of

continuing to contest liability, even for those matters for which

the Group believes it should be exonerated. The uncertainties

inherent in all such matters affect the amount and timing of any

potential outflows for both matters with respect to which

provisions have been established and other contingent liabilities.

The Group makes provisions for such matters brought against it

when, in the opinion of management after seeking legal advice,

it is more likely than not that the Group has a present legal or

constructive obligation as a result of past events, it is probable

that an outflow of resources will be required, and the amount

can be reliably estimated. Where these factors are otherwise

satisfied, a provision may be established for claims that have not

yet been asserted against the Group, but are nevertheless

expected to be, based on the Group’s experience with similar

asserted claims. If any of those conditions is not met, such

matters result in contingent liabilities. If the amount of an

obligation cannot be reliably estimated, a liability exists that is

not recognized even if an outflow of resources is probable.

Accordingly, no provision is established even if the potential

outflow of resources with respect to such matters could be

significant. Developments relating to a matter that occur after

the relevant reporting period, but prior to the issuance of

financial statements, which affect management’s assessment of

the provision for such matter (because, for example, the

developments provide evidence of conditions that existed at the

end of the reporting period), are adjusting events after the

reporting period under IAS 10 and must be recognized in the

financial statements for the reporting period.

Specific litigation, regulatory and other matters are described

below, including all such matters that management considers to

be material and others that management believes to be of

significance due to potential financial, reputational and other

effects. The amount of damages claimed, the size of a

transaction or other information is provided where available and

appropriate in order to assist users in considering the magnitude

of potential exposures.

In the case of certain matters below, we state that we have

established a provision, and for the other matters, we make no

such statement. When we make this statement and we expect

disclosure of the amount of a provision to prejudice seriously our

position with other parties in the matter because it would reveal

what UBS believes to be the probable and reliably estimable

outflow, we do not disclose that amount. In some cases we are

subject to confidentiality obligations that preclude such

disclosure. With respect to the matters for which we do not

state whether we have established a provision, either: (a) we

have not established a provision, in which case the matter is

treated as a contingent liability under the applicable accounting

standard; or (b) we have established a provision but expect

disclosure of that fact to prejudice seriously our position with

other parties in the matter because it would reveal the fact that

UBS believes an outflow of resources to be probable and reliably

estimable.

With respect to certain litigation, regulatory and similar

matters for which we have established provisions, we are able to

estimate the expected timing

of outflows. However, the

aggregate amount of the expected outflows for those matters

for which we are able to estimate expected timing is immaterial

relative to our current and expected levels of liquidity over the

relevant time periods.

The aggregate amount provisioned for litigation, regulatory

and similar matters as a class is disclosed in the “Provisions”

table in Note 14a above.

It is not practicable to provide an

aggregate estimate of liability for our litigation, regulatory and

similar matters as a class of contingent liabilities. Doing so would

require UBS to provide speculative legal assessments as to claims

and proceedings that involve unique fact patterns or novel legal

theories, that have not yet been initiated or are at early stages of

adjudication, or as to which alleged damages have not been

quantified by the claimants. Although UBS therefore cannot

provide a numerical estimate of the future losses that could arise

from litigation, regulatory and similar matters, UBS believes that

the aggregate amount of possible future losses from this class

that are more than remote substantially exceeds the level of

current provisions.

Litigation, regulatory and similar matters may also result in

non-monetary penalties and consequences. For example, the

non-prosecution agreement UBS entered into with the US

Department of Justice (DOJ), Criminal Division, Fraud Section in

connection with submissions of benchmark interest rates,

including, among others, the British Bankers’ Association

London Interbank Offered Rate (LIBOR), was terminated by the

DOJ based on its determination that UBS had committed a US

crime in relation to foreign exchange matters. As a consequence,

UBS AG pleaded guilty to one count of wire fraud for conduct in

the LIBOR matter, paid a fine and was subject to probation,

which ended in January 2020.

A guilty plea to, or conviction of, a crime could have material

consequences for UBS. Resolution of regulatory proceedings may

require UBS to obtain waivers of regulatory disqualifications to

maintain certain operations, may entitle regulatory authorities to

limit, suspend or terminate licenses and regulatory

authorizations, and may permit financial market utilities to limit,

suspend or terminate UBS’s participation in such utilities. Failure

to obtain such waivers, or any limitation, suspension or

termination of licenses, authorizations or participations, could

have material consequences for UBS.

The risk of loss associated with litigation, regulatory and

similar matters is a component of operational risk for purposes

of determining capital requirements. Information concerning our

capital requirements and the calculation of operational risk for

this purpose is included in the “Capital management” section of

this report.

Provisions for litigation, regulatory and similar matters by business division and in Group Functions

1

USD million

Global Wealth

Manage-

ment

Personal &

Corporate

Banking

Asset

Manage-

ment

Investment

Bank

Group

Functions

Total

Balance as of 31 December 2020

861

115

0

227

932

2,135

Balance as of 31 March 2021

810

109

1

217

935

2,072

Increase in provisions recognized in the income statement

20

0

0

66

1

87

Release of provisions recognized in the income statement

(11)

(11)

0

(2)

0

(24)

Provisions used in conformity with designated purpose

(27)

0

0

0

0

(27)

Foreign currency translation / unwind of discount

8

2

0

1

0

11

Balance as of 30 June 2021

800

100

1

282

936

2,119

1 Provisions, if any, for matters described in this Note are recorded in Global Wealth Management (item 3 and item 4) and Group Functions (item 2). Provisions, if any, for the matters described in items 1 and 6 of

this Note are allocated between Global Wealth Management and Personal & Corporate Banking, and provisions, if any, for the matters described in this Note in item 5 are allocated between the Investment Bank

and Group Functions.

1. Inquiries regarding cross-border wealth management

businesses 

Tax and regulatory authorities in a number of countries have

made inquiries, served requests for information or examined

employees located in their respective jurisdictions relating to the

cross-border wealth management services provided by UBS and

other financial institutions. It is possible that the implementation

of automatic tax information exchange and other measures

relating to cross-border provision of financial services could give

rise to further inquiries in the future. UBS has received disclosure

orders from the Swiss Federal Tax Administration (FTA) to

transfer information based on requests for international

administrative assistance in tax matters. The requests concern a

number of UBS account numbers pertaining to current and

former clients and are based on data from 2006 and 2008. UBS

has taken steps to inform affected clients about the

administrative assistance proceedings and their procedural

rights, including the right to appeal. The requests are based on

data received from the German authorities, who seized certain

data related to UBS clients booked in Switzerland during their

investigations and have apparently shared this data with other

European countries. UBS expects additional countries to file

similar requests.

Since 2013, UBS (France) S.A., UBS AG and certain former

employees have been under investigation in France for alleged

complicity in unlawful solicitation of clients on French territory,

regarding the laundering of proceeds of tax fraud, and banking

and financial solicitation by unauthorized persons. In connection

with this investigation, the investigating judges ordered UBS AG

to provide bail (“

caution

”) of EUR

1.1

 billion and UBS (France)

S.A. to post bail of EUR

40

 million, which was reduced on

appeal to EUR

10

 million.

A trial in the court of first instance took place from 8 October

2018 until 15 November 2018. On 20 February 2019, the court

announced a verdict finding UBS AG guilty of unlawful

solicitation of clients on French territory and aggravated

laundering of the proceeds of tax fraud, and UBS (France) S.A.

guilty of aiding and abetting unlawful solicitation and laundering

the proceeds of tax fraud. The court imposed fines aggregating

EUR

3.7

 billion on UBS AG and UBS (France) S.A. and awarded

EUR

800

 million of civil damages to the French state. UBS has

appealed the decision. Under French law, the judgment is

suspended while the appeal is pending. The trial in the Court of

Appeal took place between 8-24 March 2021. At the conclusion

of the trial, the prosecutor asserted that the maximum penalty

was EUR

2.2

 billion and requested the court to award a penalty

of at least EUR

2

 billion. The French state asked for civil damages

of EUR

1

 billion. The judgment on the merits of the case is

currently set for 27 September 2021. A subsequent appeal to

the Cour de Cassation, France’s highest court, is possible with

respect to questions of law. 

UBS believes that based on both the law and the facts the

judgment of the court of first instance should be reversed. UBS

believes it followed its obligations under Swiss and French law as

well as the European Savings Tax Directive. Even assuming

liability, which it contests, UBS believes the penalties and

damage amounts awarded greatly exceed the amounts that

could be supported by the law and the facts. In particular, UBS

believes the court incorrectly based the penalty on the total

regularized assets rather than on any unpaid taxes on those

assets for which a fraud has been characterized and further

incorrectly awarded damages based on costs that were not

proven by the civil party. Notwithstanding that UBS believes it

should be acquitted, our balance sheet at 30 June 2021

reflected provisions with respect to this matter in an amount of

EUR

450

 million (USD

534

 million at 30 June 2021). The wide

range of possible outcomes in this case contributes to a high

degree of estimation uncertainty. The provision reflected on our

balance sheet at 30 June 2021 reflects our best estimate of

possible financial implications, although it is reasonably possible

that actual penalties and civil damages could exceed the

provision amount.

In 2016, UBS was notified by the Belgian investigating judge

that it is under formal investigation (“

inculpé

”) regarding the

laundering of proceeds of tax fraud, of banking and financial

solicitation by unauthorized persons, and of serious tax fraud. 

Our balance sheet at 30 June 2021 reflected provisions with

respect to matters described in this item 1 in an amount that

UBS believes to be appropriate under the applicable accounting

standard. As in the case of other matters for which we have

established provisions, the future outflow of resources in respect

of such matters cannot be determined with certainty based on

currently available information and accordingly may ultimately

prove to be substantially greater (or may be less) than the

provision that we have recognized.

2. Claims related to sales of residential mortgage-backed

securities and mortgages

From 2002 through 2007, prior to the crisis in the US residential

loan market, UBS was a substantial issuer and underwriter of US

residential mortgage-backed securities (RMBS) and was a

purchaser and seller of US residential mortgages. 

In November 2018, the DOJ filed a civil complaint in the

District Court for the Eastern District of New York. The complaint

seeks unspecified civil monetary penalties under the Financial

Institutions Reform, Recovery and Enforcement Act of 1989

related to UBS’s issuance, underwriting and sale of 40 RMBS

transactions in 2006 and 2007. UBS moved to dismiss the civil

complaint on 6 February 2019. On 10 December 2019, the

district court denied UBS’s motion to dismiss. 

Our balance sheet at 30 June 2021 reflected a provision with

respect to matters described in this item 2 in an amount that

UBS believes to be appropriate under the applicable accounting

standard. As in the case of other matters for which we have

established provisions, the future outflow of resources in respect

of this matter cannot be determined with certainty based on

currently available information and accordingly may ultimately

prove to be substantially greater (or may be less) than the

provision that we have recognized.

3. Madoff

In relation to the Bernard L. Madoff Investment Securities LLC

(BMIS) investment fraud, UBS AG, UBS (Luxembourg) S.A. (now

UBS Europe SE, Luxembourg branch) and certain other UBS

subsidiaries have been subject to inquiries by a number of

regulators, including the Swiss

Financial Market Supervisory

Authority (FINMA) and the Luxembourg Commission de

Surveillance du Secteur Financier. Those inquiries concerned two

third-party funds established under Luxembourg law,

substantially all assets of which were with BMIS, as well as

certain funds established in offshore jurisdictions with either

direct or indirect exposure to BMIS. These funds faced severe

losses, and the Luxembourg funds are in liquidation. The

documentation establishing both funds identifies UBS entities in

various roles, including custodian, administrator, manager,

distributor and promoter, and indicates that UBS employees

serve as board members.

In 2009 and 2010, the liquidators of the two Luxembourg

funds filed claims against UBS entities, non-UBS entities and

certain individuals, including current and former UBS employees,

seeking amounts totaling approximately EUR

2.1

 billion, which

includes amounts that the funds may be held liable to pay the

trustee for the liquidation of BMIS (BMIS Trustee).

A large number of alleged beneficiaries have filed claims

against UBS entities (and non-UBS entities) for purported losses

relating to the Madoff fraud. The majority of these cases have

been filed in Luxembourg, where decisions that the claims in

eight test cases were inadmissible have been affirmed by the

Luxembourg Court of Appeal, and the Luxembourg Supreme

Court has dismissed a further appeal in one of the test cases.

In the US, the BMIS Trustee filed claims against UBS entities,

among others, in relation to the two Luxembourg funds and one

of the offshore funds. The total amount claimed against all

defendants in these actions was not less than USD

2

 billion. In

2014, the US Supreme Court rejected the BMIS Trustee’s motion

for leave to appeal decisions dismissing all claims except those

for the recovery of approximately USD 125 million of payments

alleged to be fraudulent conveyances and preference payments.

In 2016, the bankruptcy court dismissed these claims against the

UBS entities. In February 2019, the Court of Appeals reversed

the dismissal of the BMIS Trustee’s remaining claims, and the US

Supreme Court subsequently denied a petition seeking review of

the Court of Appeals’ decision. The case has been remanded to

the Bankruptcy Court for further proceedings.

4. Puerto Rico

Declines since 2013 in the market prices of Puerto Rico

municipal bonds and of closed-end funds (funds) that are sole-

managed and co-managed by UBS Trust Company of Puerto

Rico and distributed by UBS Financial Services Incorporated of

Puerto Rico (UBS PR) led to multiple regulatory inquiries, which

in 2014 and 2015, led to settlements with the Office of the

Commissioner of Financial Institutions for the Commonwealth of

Puerto Rico, the US Securities and Exchange Commission (SEC)

and the Financial Industry Regulatory Authority. 

Since then UBS clients in Puerto Rico who own the funds or

Puerto Rico municipal bonds and/or who used their UBS account

assets as collateral for UBS non-purpose loans filed customer

complaints and arbitration demands. Allegations include fraud,

misrepresentation and unsuitability of the funds and of the loans

seeking aggregate damages of USD

3.4

 billion, of which

USD

2.9

 billion have been resolved through settlements,

arbitration or withdrawal of claims.

A shareholder derivative action was filed in 2014 against

various UBS entities and current and certain former directors of

the funds, alleging hundreds of millions of US dollars in losses in

the funds. In 2015, defendants’ motion to dismiss was denied. 

In 2011, a purported derivative action was filed on behalf of

the Employee Retirement System of the Commonwealth of

Puerto Rico (System) against over 40 defendants, including UBS

PR, which was named in connection with its underwriting and

consulting services. Plaintiffs alleged that defendants violated

their purported fiduciary duties and contractual obligations in

connection with the issuance and underwriting of USD

3

 billion

of bonds by the System in 2008 and sought damages of over

USD

800

 million. In 2016, the court granted the System’s

request to join the action as a plaintiff. In 2017, the court denied

defendants’ motion to dismiss the complaint. In 2020, the court

denied plaintiffs’ motion for summary judgment.

Beginning in 2015, certain agencies and public corporations

of the Commonwealth of Puerto

Rico (Commonwealth)

defaulted on certain interest payments on Puerto Rico bonds. In

2016, US federal legislation created an oversight board with

power to oversee Puerto Rico’s finances and to restructure its

debt. The oversight board has imposed a stay on the exercise of

certain creditors’ rights. In 2017, the oversight board placed

certain of the bonds into a bankruptcy-like proceeding under the

supervision of a Federal District Judge. 

In May 2019, the oversight board filed complaints in Puerto

Rico federal district court bringing claims against financial, legal

and accounting firms that had participated in Puerto Rico

municipal bond offerings, including UBS, seeking a return of

underwriting and swap fees paid in connection with those

offerings. UBS estimates that it received approximately USD

125

million in fees in the relevant offerings.

In August 2019, and February and November 2020, four US

insurance companies that insured issues of Puerto Rico municipal

bonds sued UBS and several other underwriters of Puerto Rico

municipal bonds in three separate cases. The actions collectively

seek recovery of an aggregate of USD

955

 million in damages

from the defendants. The plaintiffs in these cases claim that

defendants failed to reasonably investigate financial statements

in the offering materials for the insured Puerto Rico bonds issued

between 2002 and 2007, which plaintiffs argue they relied upon

in agreeing to insure the bonds notwithstanding that they had

no contractual relationship with the underwriters. In June 2021

the court in the first of the three cases denied defendants’

motion to dismiss; defendants are seeking leave to appeal that

decision. In July 2021, the court in another of these cases

granted defendants’ motion to dismiss. A motion to dismiss is

pending in the remaining case.

Our balance sheet at 30 June 2021 reflected provisions with

respect to matters described in this item 4 in amounts that UBS

believes to be appropriate under the applicable accounting

standard. As in the case of other matters for which we have

established provisions, the future outflow of resources in respect

of such matters cannot be determined with certainty based on

currently available information and accordingly may ultimately

prove to be substantially greater (or may be less) than the

provisions that we have recognized.

5. Foreign exchange, LIBOR and benchmark rates, and other

trading practices

Foreign exchange-related regulatory matters:

 Beginning in 2013,

numerous authorities commenced investigations concerning

possible manipulation of foreign exchange markets and precious

metals prices. As a result of these investigations, UBS entered

into resolutions with the UK Financial Conduct Authority (FCA),

the US Commodity Futures Trading Commission (CFTC), FINMA,

the Board of Governors of the Federal Reserve System (Federal

Reserve Board) and the Connecticut Department of Banking, the

DOJ’s Criminal Division and the European Commission. UBS has

ongoing obligations under the Cease and Desist Order of the

Federal Reserve Board and the Office of the Comptroller of the

Currency (as successor to the Connecticut Department of

Banking), and to cooperate with relevant authorities and to

undertake certain

remediation measures. UBS has also been

granted conditional immunity by the Antitrust Division of the

DOJ and by authorities in other jurisdictions in connection with

potential competition law violations relating to foreign exchange

and precious metals businesses. Investigations relating to foreign

exchange matters by certain authorities remain ongoing

notwithstanding these resolutions.

Foreign exchange-related civil litigation:

 Putative class actions

have been filed since 2013 in US federal courts and in other

jurisdictions against UBS and other banks on behalf of putative

classes of persons who engaged in foreign currency transactions

with any of the defendant banks. UBS has resolved US federal

court class actions relating to foreign currency transactions with

the defendant banks and persons who transacted in foreign

exchange futures contracts and options on such futures under a

settlement agreement that provides for UBS to pay an aggregate

of USD

141

 million and provide cooperation to the settlement

classes. Certain class members have excluded themselves from

that settlement and have filed individual actions in US and

English courts against UBS and other banks, alleging violations

of US and European competition laws and unjust enrichment.

In 2015, a putative class action was filed in federal court

against UBS and numerous other banks on behalf of persons

and businesses in the US who directly purchased foreign

currency from the defendants and alleged co-conspirators for

their own end use. In March 2017, the court granted UBS’s (and

the other banks’) motions to dismiss the complaint. The plaintiffs

filed an amended complaint in August 2017. In March 2018, the

court denied the defendants’ motions to dismiss the amended

complaint.

LIBOR and other benchmark-related regulatory matters:

Numerous government agencies, including the SEC, the CFTC,

the DOJ, the FCA, the UK Serious Fraud Office, the Monetary

Authority of Singapore, the Hong Kong Monetary Authority,

FINMA, various state attorneys general in the US and competition

authorities in various jurisdictions, have conducted investigations

regarding potential improper attempts by UBS, among others, to

manipulate LIBOR and other benchmark rates at certain times.

UBS reached settlements or otherwise concluded investigations

relating to benchmark interest rates with the investigating

authorities. UBS has ongoing obligations to cooperate with the

authorities with whom we have reached resolutions and to

undertake certain remediation measures with respect to

benchmark interest rate submissions. UBS has been granted

conditional leniency or conditional immunity from authorities in

certain jurisdictions, including the Antitrust Division of the DOJ

and the Swiss Competition Commission (WEKO), in connection

with potential antitrust or competition law violations related to

certain rates. However, UBS has not reached a final settlement

with WEKO, as the Secretariat of WEKO has asserted that UBS

does not qualify for full immunity.

LIBOR and other benchmark-related civil litigation:

 A number

of putative class actions and other actions are pending in the

federal courts in New York against UBS and numerous other

banks on behalf of parties who transacted in certain interest rate

benchmark-based derivatives. Also pending in the US and in

other jurisdictions are a number of other actions asserting losses

related to various products whose interest rates were linked to

LIBOR and other benchmarks, including adjustable rate

mortgages, preferred and debt securities, bonds pledged as

collateral,

loans, depository accounts, investments and other

interest-bearing instruments. The complaints allege

manipulation, through various means, of certain benchmark

interest rates, including USD LIBOR, Euroyen TIBOR, Yen LIBOR,

EURIBOR, CHF LIBOR, GBP LIBOR, SGD SIBOR and SOR and

Australian BBSW, and seek unspecified compensatory and other

damages under varying legal theories.

USD LIBOR class and individual actions in the US:

In 2013 and

2015, the district court in the USD LIBOR actions dismissed, in

whole or in part, certain plaintiffs’ antitrust claims, federal

racketeering claims, CEA claims, and state common law claims.

Although the Second Circuit vacated the district court’s

judgment dismissing antitrust claims, the district court again

dismissed antitrust claims against UBS in 2016. Certain plaintiffs

have appealed that decision to the Second Circuit. Separately, in

2018, the Second Circuit reversed in part the district court’s

2015 decision dismissing certain individual plaintiffs’ claims and

certain of these actions are now proceeding. UBS entered into

an agreement in 2016 with representatives of a class of

bondholders to settle their USD LIBOR class action. The

agreement has received final court approval. In 2018, the district

court denied plaintiffs’ motions for class certification in the

USD class actions for claims pending against UBS, and plaintiffs

sought permission to appeal that ruling to the Second Circuit. In

July 2018, the Second Circuit denied the petition to appeal of

the class of USD lenders and in November 2018 denied the

petition of the USD exchange class. In December 2019, UBS

entered into an agreement with representatives of the class of

USD lenders to settle their USD LIBOR class action. The

agreement has received final court approval. In January 2019, a

putative class action was filed in the District Court for the

Southern District of New York against UBS and numerous other

banks on behalf of US residents who, since 1 February 2014,

directly transacted with a defendant bank in USD LIBOR

instruments. The complaint asserts antitrust claims. The

defendants moved to dismiss the complaint in August 2019. On

26 March 2020 the court granted defendants’ motion to dismiss

the complaint in its entirety. Plaintiffs have appealed the

dismissal. In August 2020, an individual action was filed in the

Northern District of California against UBS and numerous other

banks alleging that the defendants conspired to fix the interest

rate used as the basis for loans to consumers by jointly setting

the USD LIBOR rate and monopolized the market for LIBOR-

based consumer loans and credit cards. 

Other benchmark class actions in the US:

In 2014, 2015 and

2017, the court in one of the Euroyen TIBOR lawsuits dismissed

certain of the plaintiffs’ claims, including plaintiffs’ federal

antitrust and racketeering claims. In August 2020, the court

granted defendants’ motion for judgment on the pleadings and

dismissed the lone remaining claim in the action as impermissibly

extraterritorial. Plaintiffs have appealed. In 2017, the court

dismissed the other Yen LIBOR / Euroyen TIBOR action in its

entirety on standing grounds. In April 2020, the appeals court

reversed the dismissal and in August 2020 plaintiffs in that

action filed an amended complaint. Defendants moved to

dismiss the amended complaint in October 2020. In 2017, the

court dismissed the CHF LIBOR action on standing grounds and

failure to state a claim. Plaintiffs filed an amended complaint

following the dismissal, and the court granted a renewed

motion to dismiss in September 2019. Plaintiffs have appealed.

Also in 2017, the court in the EURIBOR lawsuit dismissed the

case as to UBS and certain other foreign defendants for lack of

personal jurisdiction. Plaintiffs have appealed. In October 2018,

the court in the SIBOR / SOR action dismissed all but one of

plaintiffs’ claims against UBS. Plaintiffs filed an amended

complaint following the dismissal, and the court granted a

renewed motion to dismiss in July 2019. Plaintiffs appealed. In

March 2021, the Second Circuit reversed

the dismissal. In

November 2018, the court in the BBSW lawsuit dismissed the

case as to UBS and certain other foreign defendants for lack of

personal jurisdiction. Following that dismissal, plaintiffs filed an

amended complaint in April 2019, which UBS and other

defendants named in the amended complaint moved to dismiss.

In February 2020, the court in the BBSW action granted in part

and denied in part defendants’ motions to dismiss the amended

complaint. In August 2020, UBS and other BBSW defendants

joined

a motion for judgment on the pleadings. The court

dismissed the GBP LIBOR action in August 2019. Plaintiffs have

appealed. 

Government bonds:

 Putative class actions have been filed since

2015 in US federal courts against UBS and other banks on behalf

of persons who participated in markets for US Treasury securities

since 2007. A consolidated complaint was filed in 2017 in the US

District Court for the Southern District of New York alleging that

the banks colluded with respect to, and manipulated prices of, US

Treasury securities sold at auction and in the secondary market

and asserting claims under the antitrust laws and for unjust

enrichment. Defendants’ motions to dismiss the consolidated

complaint was granted on 31 March 2021. Plaintiffs filed an

amended complaint, which defendants moved to dismiss in June

2021. Similar class actions have been filed concerning European

government bonds and other government bonds.

In May 2021, the European Commission issued a decision

finding that UBS and six other banks breached European Union

antitrust rules in 2007-2011 relating to European government

bonds. The European Commission fined UBS EUR

172

 million. UBS

is appealing the amount of the fine.

With respect to additional matters and jurisdictions not

encompassed by the settlements and orders referred to above,

our balance sheet at 30 June 2021 reflected a provision in an

amount that UBS believes to be appropriate under the applicable

accounting standard. As in the case of other matters for which

we have established provisions, the future outflow of resources

in respect of such matters cannot be determined with certainty

based on currently available information and accordingly may

ultimately prove to be substantially greater (or may be less) than

the provision that we have recognized.

6. Swiss retrocessions

The Federal Supreme Court of Switzerland ruled in 2012, in a

test case against UBS, that distribution fees paid to a firm for

distributing third-party and intra-group investment funds and

structured products must be disclosed and surrendered to clients

who have entered into a discretionary mandate agreement with

the firm, absent a valid waiver. FINMA issued a supervisory note

to all Swiss banks in response to the Supreme Court decision.

UBS has met the FINMA requirements and has notified all

potentially affected clients.

The Supreme Court decision has resulted, and may continue

to result, in a number of client requests for UBS to disclose and

potentially surrender retrocessions. Client requests are assessed

on a case-by-case basis. Considerations taken into account when

assessing these cases include, among other things, the existence

of a discretionary mandate and whether or not the client

documentation contained a valid waiver with respect to

distribution fees.

Our balance sheet at 30 June 2021 reflected a provision with

respect to matters described in this item 6 in an amount that

UBS believes to be appropriate under the applicable accounting

standard. The ultimate exposure will depend on client requests

and the resolution thereof, factors that are difficult to predict

and assess. Hence, as in the case of other matters for which we

have established provisions, the future outflow of resources in

respect of such matters cannot be determined with certainty

based on currently available information and accordingly may

ultimately prove to be substantially greater (or may be less) than

the provision that we have recognized.