UBS Finalizes ARS Settlements

Comprehensive settlements restore liquidity to most clients

March 2010 Update

On March 4, 2010 UBS announced it had finalized a settlement with the Texas State Securities Board (TSSB), in conjunction with the North American Securities Administrators Association (NASAA), regarding clients´ holdings of auction rate securities (ARS).  The NASAA settlement is the latest step in UBS´s ongoing effort to restore liquidity to its ARS clients who were adversely affected by the failure of the ARS market in February 2008 and who continue to have difficulty finding relief.

  • This settlement allows certain clients who purchased from UBS but moved to other firms to recover liquidity.
  • UBS will provide up to $200 million of liquidity to former private clients who purchased ARS from UBS between January 1, 2000 and September 30, 2007 and transferred them outside the firm before February 13, 2008.  Please note: Institutions are not eligible for settlement provision under the terms of this agreement.

Former UBS clients may call 1-800-253-1974 for more information regarding this settlement and the steps necessary to initiate the process for recovering liquidity.

UBS previously announced the terms of its settlement with NASAA, the Securities Exchange Commission (SEC) and the states of New York and Massachusetts on August 8, 2008. Under the terms of the August 2008 settlement, UBS agreed to purchase ARS at par from "Eligible Clients" pursuant to an ARS Rights Offering prospectus dated October 7, 2008 (ARS Rights Offer (PDF, 161 KB)). All Eligible Clients under the ARS Rights Offering were sent notice letters in October 2008.  The ARS Rights Offering committed UBS to purchase USD 8.3 billion of ARS from retail clients beginning October 30, 2008 and to purchase USD 10.3 billion ARS from eligible institutional clients beginning June 30, 2010. UBS was the first major firm to announce a definitive timetable for institutional clients. The UBS ARS Rights Offering covered holders of ARS who were UBS clients at the time of the market failure, regardless of where those ARS were purchased. It also covered clients that had purchased ARS at UBS between October 1, 2007 and February 13, 2008 but transferred them away from UBS prior to February 13, 2008. Detailed information regarding the firm's settlement with the SEC is available in UBS's August 8, 2008, press release. UBS has also created a tool for investors with Eligible ARS to determine current interest rates and/or dividends for their specific ARS holdings; security identifiers (knowns as CUSIPs) were included in the letters that were mailed to eligible current and former clients.

Current and former clients should contact their UBS Financial Advisors (or Branch Managers at their former branches) with questions, or contact us by e-mail.