Note 33 Related Parties

The Group defines related parties as associated companies, post-employment benefit plans for the benefit of UBS employees, key management personnel, close family members of key management personnel and enterprises which are, directly or indirectly, controlled by, jointly controlled by or significantly influenced by or in which significant voting power resides with key management personnel or their close family members. Key management personnel is defined as members of the Board of Directors (BoD) and Group Executive Board (GEB). This definition is based on the requirements of IAS 24 Related Party Disclosures and the "Directive on Information Relating to Corporate Governance" issued by the SWX Swiss Exchange.

a) Remuneration of key management personnel
The executive members of the BoD have top management employment contracts and receive pension benefits upon retirement. Total remuneration of the executive members of the BoD and GEB is as follows:
	For the year ended
CHF million	31.12.06	31.12.05	31.12.04
Base salaries and other cash payments	16	15	15
Incentive awards – cash	107	90	70
Employer's contributions to retirement benefit plans	1	1	1
Benefits in kind, fringe benefits (at market value)	2	3	2
Equity compensation benefits ¹	121	114	103
Total	247	223	191
1 Expense for shares and options granted is measured at grant date and allocated over the vesting period, generally 3 years for options and 5 years for shares.

The non-executive members of the BoD do not have employment or service contracts with UBS, and thus are not entitled to benefits upon termination of their service on the BoD. Payments to these individuals for their services as external board members amounted to CHF 5.9 million in 2006, CHF 6.1 million in 2005 and CHF 5.7 million in 2004.

b) Equity holdings
	31.12.06	31.12.05	31.12.04
Number of stock options from equity participation plans held by executive members of the BoD and the GEB	10,886,798	10,862,250	12,009,994
Number of shares held by members of the BoD, GEB and parties closely linked to them	7,974,724	8,713,984	7,013,220

Of the share totals above, at 31 December 2006 and 31 December 2005, respectively, 7,146 shares and 6,538 shares were held by close family members of key management personnel and 2,200,000 shares and 2,486,060 shares were held by enterprises which are directly or indirectly controlled by, jointly controlled by or significantly influenced by or in which significant voting power resides with key management personnel or their close family members. Further information about UBS's equity participation plans can be found in Note 32. No member of the BoD or GEB is the beneficial owner of more than 1% of the Group's shares at 31 December 2006.

c) Loans, advances and mortgages to key management personnel

Executive members of the BoD and GEB members have been granted loans, fixed advances and mortgages on the same terms and conditions that are available to other employees, based on terms and conditions granted to third parties adjusted for reduced credit risk. Non-executive BoD members are granted loans and mortgages at general market conditions.

Movements in the loan, advances and mortgage balances are as follows:

CHF million	31.12.06	31.12.06
Balance at the beginning of the year	21	16
Additions	1	7
Reductions	(3)	(2)
Balance at the end of the year	19	21

No unsecured loans were granted to key management personnel as of 31 December 2006 and 31 December 2005.

d) Associated companies

Movements in loans to associated companies are as follows:

CHF million	31.12.06	31.12.05
Balance at the beginning of the year	321	83
Additions	116	267
Reductions	(48)	(26)
Credit loss (expense) / recovery	1	(3)
Foreign currency translation	(15)	0
Balance at the end of the year	375	321

All loans to associated companies are transacted at arm's length. Of the balances above, the amount of unsecured loans amounted to CHF 177 million and CHF 82 million at 31 December 2006 and 31 December 2005, respectively.

Other transactions with associated companies transacted at arm's length are as follows:

	For the year ended or as of
CHF million	31.12.06	31.12.05	31.12.04
Payments to associates for goods and services received	58	397	248
Fees received for services provided to associates	79	258	180
Commitments and contingent liabilities to associates	32	39

Note 35 provides a list of significant associates.

e) Other related party transactions

During 2006 and 2005, UBS entered into transactions at arm's length with enterprises which are directly or indirectly controlled by, jointly controlled by or significantly influenced by or in which significant voting power resides with key management personnel or their close family members. In 2006 and 2005 these companies included BMW Group (Germany), Kedge Capital Funds Ltd. (Jersey), Löwenfeld AG (Switzerland), Royal Dutch Shell plc (UK), Seromer Biotech SA (Switzerland, previously Bertarelli Biotech SA), Serono Group (Switzerland), Stadler Rail Group (Switzerland), Team Alinghi (Switzerland), and Unisys Corporation (USA). Related parties in 2006 also included Aebi + Co. AG (Switzerland), Bertarelli Family (Switzerland), DKSH Holding AG (Switzerland), Kedge Capital Selected Funds Ltd. (Jersey), Lista AG (Switzerland), Martown Trading Ltd. (Isle of Man) and Team Alinghi (Spain).

Movements in loans to other related parties are as follows:

CHF million	31.12.06	31.12.05
Balance at the beginning of the year	919	294
Additions	34	628
Reductions	81	3
Loan at the end of the year ¹	872	919
1 In 2006 includes loans, guarantees and contingent liabilities of CHF 128 million and unused committed facilities of CHF 744 million but excludes unused uncommitted working capital facilities and unused guarantees of CHF 173 million. In 2005 includes loans, guarantees and contingent liabilities of CHF 116 million and unused committed facilities of CHF 804 million but excludes unused uncommitted working capital facilities and unused guarantees of CHF 52 million.

Other transactions with these related parties include:
	For the year ended
CHF million	31.12.06	31.12.05	31.12.04
Goods sold and services provided to UBS	8	15	34
Fees received for services provided by UBS	8	1	10

As part of its sponsorship of Team Alinghi, defender for the "America's Cup 2007", UBS paid CHF 8.7 million (EUR 5.4 million) in sponsoring fees for 2006. Team Alinghi's controlling shareholder is UBS board member Ernesto Bertarelli.

f) Additional information

UBS also engages in trading and risk management activities (e.g. swaps, options, forwards) with various related parties mentioned in previous sections. These transactions may give rise to credit risk either for UBS or for a related party towards UBS. As part of its normal course of business, UBS is also a market maker in equity and debt instruments and at times may hold positions in instruments of related parties.