Litigation, regulatory and similar matters

12 Months Ended

Dec. 31, 2021

Entity [Table]

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 18a 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. 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, liquidity and funding, and

balance sheet” 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 2021

Balance at the beginning of the year

861

115

0

227

932

2,135

Increase in provisions recognized in the income statement

754

84

9

107

32

986

Release of provisions recognized in the income statement

(60)

(11)

0

(4)

0

(74)

Provisions used in conformity with designated purpose

(175)

(1)

(1)

(10)

(2)

(189)

Foreign currency translation / unwind of discount

(42)

(6)

0

(11)

0

(59)

Balance at the end of the year

1,338

181

8

310

962

2,798

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

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 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.

On 20 February 2019, the court of first instance returned 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 of 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. A trial in the French Court of Appeal

took place in March 2021. On 13 December 2021, the Court of

Appeal found UBS AG guilty of unlawful solicitation and

aggravated laundering of the proceeds of tax fraud. The court

ordered a fine of EUR

3.75

 million, the confiscation of

EUR

1

 billion, and awarded civil damages to the French state of

EUR

800

 million. The court also found UBS (France) SA guilty of

the aiding and abetting of unlawful solicitation and ordered it to

pay a fine of EUR

1.875

 million. UBS AG has filed an appeal with

the French Supreme Court to preserve its rights. The appeal

enables UBS AG to thoroughly assess the verdict of the Court of

Appeal and to determine next steps in the best interest of its

stakeholders. The fine and confiscation imposed by the Court of

Appeal are suspended during the appeal. The civil damages award

has been paid to the French state (EUR

99

 million of which was

deducted from the bail), subject to the result of UBS’s appeal.

Our balance sheet at 31 December 2021 reflected provisions

with respect to this matter in an amount of EUR

1.1

 billion

(USD

1.252

 billion at 31 December 2021). The wide range of

possible outcomes in this case contributes to a high degree of

estimation uncertainty and the provision reflects our best estimate

of possible financial implications, although actual penalties and

civil damages could exceed (or may be less than) the provision

amount.

In 2016, UBS was notified by the Belgian investigating judge

that it was under formal investigation (“

inculpé

”) regarding the

allegations of laundering of proceeds of tax fraud, banking and

financial solicitation by unauthorized persons, and serious tax

fraud. In November 2021, the Council Chamber approved a

settlement with the Brussels Prosecution Office for EUR

49

 million

without recognition of guilt with regard to the allegations of

banking and financial solicitation by unauthorized persons and

serious tax fraud. The allegation of laundering of proceeds of tax

fraud was dismissed.

Our balance sheet at 31 December 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 31 December 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 seeking aggregate damages

of USD

3.4

 billion, of which USD

3.1

 billion have been resolved

through settlements, arbitration or withdrawal of claims.

Allegations include fraud, misrepresentation and unsuitability of

the funds and of the loans.

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 2021, the parties reached an agreement to settle this

matter for USD

15

 million, subject to court approval. 

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. Defendants’

motions to dismiss were granted in two of the cases; those

decisions are being appealed by the plaintiffs. In the third case,

defendants’ motion to dismiss was denied, but on appeal that

ruling was reversed and the motion to dismiss was granted.

Our balance sheet at 31 December 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 Swiss, US and United Kingdom regulators and

the European Commission. UBS was 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.

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 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 was 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,

and again dismissed the antitrust claims in 2016 following an

appeal. In December 2021, the Second Circuit affirmed the district

court’s dismissal in part and reversed in part and remanded to the

district court for further proceedings. The Second Circuit, among

other things, held that there was personal jurisdiction over UBS

and other foreign defendants based on allegations that at least

one alleged co-conspirator undertook an overt act in the United

States. 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.

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 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. Defendants moved to dismiss

the complaint in September 2021.

Other benchmark class actions in the US: 

Yen LIBOR / Euroyen TIBOR –

In 2014, 2015 and 2017, the court

in one of the Yen LIBOR / Euroyen TIBOR lawsuits dismissed

certain of the plaintiffs’ claims, including the 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 focused on Yen LIBOR. The court

granted in part and denied in part defendants’ motion to dismiss

the amended complaint in September 2021 and plaintiffs and the

remaining defendants have moved for reconsideration. 

CHF LIBOR

 – In 2017, the court dismissed the CHF LIBOR action

on standing grounds and failure to state a claim. Plaintiffs filed an

amended complaint, and the court granted a renewed motion to

dismiss in September 2019. Plaintiffs appealed. In September

2021, the Second Circuit granted the parties’ joint motion to

vacate the dismissal and remand the case for further proceedings. 

EURIBOR

 – 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. 

SIBOR / SOR

 – In October 2018, the court in the SIBOR / SOR

action dismissed all but one of plaintiffs’ claims against UBS.

Plaintiffs filed an amended complaint, and the court granted a

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

March 2021, the Second Circuit reversed the dismissal. Plaintiffs

filed an amended complaint in October 2021, which defendants

have moved to dismiss. 

BBSW

 – In November 2018, the court dismissed the BBSW

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

personal jurisdiction. Plaintiffs filed an amended complaint in April

2019, which UBS and other defendants moved to dismiss. In

February 2020, the court 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, which the court denied in May

2021. 

GBP LIBOR

 – 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 in 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 31 December 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 continues 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 31 December 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.

UBS AG

Entity [Table]

Disclosure Of Contingent Liabilities Explanatory

b) Litigation, regulatory and similar matters

UBS 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 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 UBS 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 UBS 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. UBS 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 UBS 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 UBS, but are nevertheless expected to be, based

on UBS’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 18a 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. 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, liquidity and funding, and

balance sheet” 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 2021

Balance at the beginning of the year

861

115

0

227

932

2,135

Increase in provisions recognized in the income statement

754

84

9

107

32

986

Release of provisions recognized in the income statement

(60)

(11)

0

(4)

0

(74)

Provisions used in conformity with designated purpose

(175)

(1)

(1)

(10)

(2)

(189)

Foreign currency translation / unwind of discount

(42)

(6)

0

(11)

0

(59)

Balance at the end of the year

1,338

181

8

310

962

2,798

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

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 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.

On 20 February 2019, the court of first instance returned 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 of 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. A trial in the French Court of Appeal

took place in March 2021. On 13 December 2021, the Court of

Appeal found UBS AG guilty of unlawful solicitation and

aggravated laundering of the proceeds of tax fraud. The court

ordered a fine of EUR

3.75

 million, the confiscation of

EUR

1

 billion, and awarded civil damages to the French state of

EUR

800

 million. The court also found UBS (France) SA guilty of

the aiding and abetting of unlawful solicitation and ordered it to

pay a fine of EUR

1.875

 million. UBS AG has filed an appeal with

the French Supreme Court to preserve its rights. The appeal

enables UBS AG to thoroughly assess the verdict of the Court of

Appeal and to determine next steps in the best interest of its

stakeholders. The fine and confiscation imposed by the Court of

Appeal are suspended during the appeal. The civil damages award

has been paid to the French state (EUR

99

 million of which was

deducted from the bail), subject to the result of UBS’s appeal.

Our balance sheet at 31 December 2021 reflected provisions

with respect to this matter in an amount of EUR

1.1

 billion

(USD

1.252

 billion at 31 December 2021). The wide range of

possible outcomes in this case contributes to a high degree of

estimation uncertainty and the provision reflects our best estimate

of possible financial implications, although actual penalties and

civil damages could exceed (or may be less than) the provision

amount.

In 2016, UBS was notified by the Belgian investigating judge

that it was under formal investigation (“

inculpé

”) regarding the

allegations of laundering of proceeds of tax fraud, banking and

financial solicitation by unauthorized persons, and serious tax

fraud. In November 2021, the Council Chamber approved a

settlement with the Brussels Prosecution Office for EUR

49

 million

without recognition of guilt with regard to the allegations of

banking and financial solicitation by unauthorized persons and

serious tax fraud. The allegation of laundering of proceeds of tax

fraud was dismissed.

Our balance sheet at 31 December 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 31 December 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 seeking aggregate damages

of USD

3.4

 billion, of which USD

3.1

 billion have been resolved

through settlements, arbitration or withdrawal of

claims

.

Allegations include fraud, misrepresentation and unsuitability of

the funds and of the loans.

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 2021, the parties reached an agreement to settle this

matter for USD

15

 million, subject to court approval. 

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. Defendants’

motions to dismiss were granted in two of the cases; those

decisions are being appealed by the plaintiffs. In the third case,

defendants’ motion to dismiss was denied, but on appeal that

ruling was reversed and the motion to dismiss was granted.

Our balance sheet at 31 December 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 Swiss, US and United Kingdom regulators and

the European Commission. UBS was 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.

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 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 was 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,

and again dismissed the antitrust claims in 2016 following an

appeal. In December 2021, the Second Circuit affirmed the district

court’s dismissal in part and reversed in part and remanded to the

district court for further proceedings. The Second Circuit, among

other things, held that there was personal jurisdiction over UBS

and other foreign defendants based on allegations that at least

one alleged co-conspirator undertook an overt act in the United

States. 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.

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 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. Defendants moved to dismiss

the complaint in September 2021.

Other benchmark class actions in the US: 

Yen LIBOR / Euroyen TIBOR –

In 2014, 2015 and 2017, the court

in one of the Yen LIBOR / Euroyen TIBOR lawsuits dismissed

certain of the plaintiffs’ claims, including the 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 focused on Yen LIBOR. The court

granted in part and denied in part defendants’ motion to dismiss

the amended complaint in September 2021 and plaintiffs and the

remaining defendants have moved for reconsideration. 

CHF LIBOR

 – In 2017, the court dismissed the CHF LIBOR action

on standing grounds and failure to state a claim. Plaintiffs filed an

amended complaint, and the court granted a renewed motion to

dismiss in September 2019. Plaintiffs appealed. In September

2021, the Second Circuit granted the parties’ joint motion to

vacate the dismissal and remand the case for further proceedings. 

EURIBOR

 – 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. 

SIBOR / SOR

 – In October 2018, the court in the SIBOR / SOR

action dismissed all but one of plaintiffs’ claims against UBS.

Plaintiffs filed an amended complaint, and the court granted a

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

March 2021, the Second Circuit reversed the dismissal. Plaintiffs

filed an amended complaint in October 2021, which defendants

have moved to dismiss. 

BBSW

 – In November 2018, the court dismissed the BBSW

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

personal jurisdiction. Plaintiffs filed an amended complaint in April

2019, which UBS and other defendants moved to dismiss. In

February 2020, the court 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, which the court denied in May

2021. 

GBP LIBOR

 – 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 in 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 31 December 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 continues 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 31 December 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.