Group structure and shareholders

Under Swiss company law, UBS is organized as a limited company, a corporation that has issued shares of common stock to investors. UBS AG is the parent company of the UBS Group.

UBS Group legal entity structure

The legal entity structure of UBS is designed to support its businesses within an efficient legal, tax, regulatory and funding framework. None of the Business Groups of UBS or its Corporate Center are separate legal entities. They operate out of the parent bank, UBS AG, through its branches worldwide. The goal of this structure is to capitalize on the increased business opportunities and cost efficiencies offered by the use of a single legal platform and to enable the flexible and efficient use of capital.

Where it is either not possible or not efficient to operate out of the parent bank, usually due to local legal, tax or regulatory rules or as a result of additional legal entities joining the UBS Group through acquisition, businesses operate through local subsidiaries. The significant operating subsidiary companies of the Group are listed in note 35 to the financial statements.

Operational group structure

The three Business Groups – Global Wealth Management & Business Banking (with its three business units Wealth Management International & Switzerland, Wealth Management US, and Business Banking Switzerland), Global Asset Management, and Investment Bank – together with Corporate Center – form the operational structure of the Group’s financial businesses. Performance is reported according to this structure (see our Financial Report 2005). A description of the Business Groups and their strategy, structure, organization, products and services is contained in this Handbook on pages 8–13. In addition, the UBS Group accounts contain a separate reporting segment called Industrial Holdings, which was created in 2004 following the full consolidation of Motor-Columbus AG into the financial statements (and which also includes our private equity holdings). This allows UBS to maintain continuity in the presentation and analysis of the core financial businesses.

Listed and non-listed companies belonging to the Group (consolidated entities)

Motor-Columbus AG, Baden (Switzerland), listed on the SWX Swiss Exchange, share capital CHF 253 million, capitalization on 31 December 2005 CHF 2,464.2 million, UBS stake 55.6%, Valor No 212427 / ISIN CH0002124276, was fully consolidated in UBS’s financial statements in third quarter 2004 following the acquisition of a majority stake on 1 July 2004. UBS announced the intended sale of Motor-Columbus AG on 30 September 2005.

The UBS Group includes a great number of other subsidiaries, none of which, however, is listed. For details of significant subsidiaries, see note 35 to the financial statements.

Significant shareholders

Chase Nominees Ltd., London, acting in its capacity as a nominee for other investors, was registered with 8.55% of all shares issued as of 31 December 2005, compared to 8.76% at year-end 2004 and 8.27% at year-end 2003. DTC (Cede & Co.), New York, “The Depository Trust Company”, a US securities clearing organization, was registered as a shareholder for a great number of beneficial owners with 9.95% of all shares issued as of 31 December 2005 (5.77% as of 31 December 2004). According to UBS’s Regulation on the Registration of Shares, voting rights of nominees are restricted to 5%, while clearing and settlement organizations are exempt from this restriction. No other shareholders hold more than 5% of all shares issued. Ownership of UBS shares is widely spread. The tables on the next page provide information about the distribution by category of shareholders and by geography. This information relates only to registered shareholders and cannot be assumed to be representative of the entire UBS investor base. Only registered shareholders are entitled to exercise voting rights.

Under the Swiss Stock Exchange Act, anyone holding shares in a company listed in Switzerland has to notify the company and the stock exchange if the holding attains, falls below or exceeds the following thresholds: 5, 10, 20, 33 1/3, 50, or 66 2/3% of the voting rights, whether they are exercisable or not. The methodology for calculating the limit is defined in the Ordinance of the Swiss Federal Banking Commission on the Stock Exchange (disclosure of shareholdings) and includes, among others, securities lending and share acquisition rights that provide entitlement for the future acquisition of shares. Since 13 September 2002, UBS’s holdings of its own shares have been above the 5% threshold requiring disclosure under the Swiss Stock Exchange law. UBS’s position in its own shares remained between 5 and 10% throughout 2005.

At year-end, UBS’s holdings in its own shares were 8.5% of the total share capital in the form of shares. It also held a further potential 0.5% of total share capital through derivatives UBS held on its own shares.

Cross shareholdings

UBS has no cross shareholdings in excess of a reciprocal 5% of capital or voting rights with any other company.

Distribution of UBS shares

As at 31.12.05	Shareholders registered		Shares registered
Number of shares registered	Number	%	Number	% of shares issued
1 – 100	45,707	24.9	2,514,038	0.2
101 – 1,000	110,138	60.0	41,234,198	3.8
1,001 – 10,000	25,641	14.0	64,654,096	5.9
10,001 – 100,000	1,896	1.0	49,471,331	4.5
100,001 – 1,000,000	252	0.1	73,679,613	6.8
1,000,001 – 5,000,000	57	0.0	111,164,245	10.2
5,000,001 – 10,886,325 (1%)	10	0.0	73,829,006	6.8
1 – 2%	2	0.0	38,631,861	3.6
2 – 3%	1	0.0	25,633,959	2.4
3 – 4%	0	0.0	0	0.0
4 – 5%	0	0.0	0	0.0
Over 5%	2 ¹	0.0	191,568,442	17.6
Total registered	183,706	100.0	672,380,789	61.8
Unregistered ²			416,251,733	38.2
Total shares issued			1,088,632,522 ³	100.0

¹ As at 31.12.2005, DTC (Cede & Co.), New York, the US securities clearing organization, was registered with 9.95% of all shares issued. Chase Nominees Ltd., London, was entered as a trustee / nominee holding 8.55% of all shares issued. ² Shares not entered in the share register at 31 December 2005. ³ Registered shares of 151,713,384 do not carry voting rights.

Shareholders: type and distribution

	Shareholders		Shares
As at 31.12.05	Number	%	Number	%
Individual shareholders	176,651	96.2	128,924,931	11.8
Legal entities	6,542	3.5	145,887,707	13.5
Nominees, fiduciaries	513	0.3	397,568,151	36.5
Unregistered			416,251,733	38.2
Total	183,706	100.0	1,088,632,522	100.0

Switzerland	166,338	90.5	242,702,252	22.3
Europe	12,089	6.6	224,247,509	20.6
North America	2,441	1.3	159,272,770	14.6
Other countries	2,838	1.6	46,158,258	4.3
Unregistered			416,251,733	38.2
Total	183,706	100.0	1,088,632,522	100.0