Announcement on UBS ETRACS ETNs
31 December 2016 - 2:00AM
Business Wire
UBS Investment Bank today made the following announcement
concerning the UBS ETRACS ETNs.
On January 1, 2017, new US tax regulations (commonly referred to
as the Section 871(m) regulations) will become effective and may
impact non-US holders of UBS ETRACS ETNs. These regulations
may require the imposition of withholding taxes on non-US investors
in UBS ETRACS ETNs that directly or indirectly reference the
performance of US equities (“Covered ETNs”). A list of Covered
ETNs is set forth below. In the case of certain Covered ETNs, this
withholding tax would not apply until 2020. The new regulations
apply only to non-US beneficial owners, so the tax treatment of US
beneficial owners of Covered Securities is generally not altered by
the new regulations.
As a technical matter, the new regulations apply only to Covered
ETNs that are issued on or after January 1, 2017. However, Covered
ETNs that are issued on or after January 1, 2017 will have the same
CUSIP and ISIN number as Covered ETNs of the same series that were
issued before that date, and accordingly all of the Covered ETNs of
the same series will be interchangeable and fungible with each
other. As a result, non-US holders of Covered ETNs (including
holders of Covered ETNs that were purchased on or before December
31, 2016) may not be able to establish to their custodians and
other withholding agents that their Covered ETNs are exempt from
the new regulations. Accordingly, holders of Covered ETNs
should generally assume that their ETNs will be subject to the new
regulations starting on January 1, 2017.
UBS has filed supplemental prospectus/pricing addenda for
Covered ETNs that are subject to these new rules. However, there
are significant uncertainties regarding the application of the
Section 871(m) rules to the Covered ETNs, and UBS may make
additional announcements if there are further developments
regarding how these rules will apply to the Covered
ETNs. Non-US holders of Covered ETNs with respect to US
equities are urged to consult their tax advisors and their
custodians about how the new regulations may affect their Covered
ETN investments. Holders of Covered ETNs are urged to read the
prospectus/pricing addenda for more detailed information relating
to the application of these new rules. These documents can be found
at www.sec.gov and / or at http://etracs.ubs.com.
The table below lists the ticker symbols of the Covered ETNs and
indicates whether the withholding tax will take effect on January
1, 2017 or on January 1, 2020.
Effective January
1, 2017
Effective January
1, 2020
AMU CEFL AMUB DVYL BDCL HDLV BDCS HOML BDCZ LRET DVHL MORL FIHD
SDYL LBDC SMHD LMLP MLPB MLPG MLPI MLPQ MLPZ MRRL
About ETRACS
ETRACS ETNs are senior unsecured notes issued by UBS AG, are
traded on NYSE Arca, and can be bought and sold through a broker or
financial advisor. An investment in ETRACS ETNs is subject to a
number of risks, including the risk of loss of some or all of the
investor’s principal, and is subject to the creditworthiness of UBS
AG. Investors are not guaranteed any coupon or distribution amount
under the ETNs. We urge you to read the more detailed explanation
of risks described under “Risk Factors” in the applicable
prospectus supplement, or product supplement and pricing
supplement, as applicable, for the ETRACS ETN.
ETRACS ETNs are sold only in conjunction with the relevant
offering materials. UBS has filed a registration statement
(including a prospectus, as supplemented by the applicable
prospectus supplement, or product supplement and pricing
supplement, for the offering of the ETRACS ETNs) with the
Securities and Exchange Commission (the “SEC”) for the offering to
which this communication relates. Before you invest, you should
read these documents and any other documents that UBS has filed
with the SEC for more complete information about UBS and the
offering to which this communication relates. You may get these
documents for free by visiting EDGAR on the SEC website at
www.sec.gov. Alternatively, you can request the applicable
prospectus supplement, or product supplement and pricing
supplement, by calling toll-free (+1-877-387 2275). In the US,
securities underwriting, trading and brokerage activities and
M&A advisor activities are provided by UBS Securities LLC, a
registered broker/dealer that is a wholly owned subsidiary of UBS
AG, a member of the New York Stock Exchange and other principal
exchanges, and a member of SIPC. UBS Financial Services Inc. is a
registered broker/dealer and affiliate of UBS Securities LLC.
About UBS
UBS provides financial advice and solutions to wealthy,
institutional and corporate clients worldwide, as well as private
clients in Switzerland. The operational structure of the Group is
comprised of our Corporate Center and five business divisions:
Wealth Management, Wealth Management Americas, Personal &
Corporate Banking, Asset Management and the Investment Bank. UBS's
strategy builds on the strengths of all of its businesses and
focuses its efforts on areas in which it excels, while seeking to
capitalize on the compelling growth prospects in the businesses and
regions in which it operates, in order to generate attractive and
sustainable returns for its shareholders. All of its businesses are
capital-efficient and benefit from a strong competitive position in
their targeted markets.
UBS is present in all major financial centers worldwide. It has
offices in 54 countries, with about 34% of its employees working in
the Americas, 35% in Switzerland, 18% in the rest of Europe, the
Middle East and Africa and 13% in Asia Pacific. UBS Group AG
employs approximately 60,000 people around the world. Its shares
are listed on the SIX Swiss Exchange and the New York Stock
Exchange (NYSE).
This material is issued by UBS AG and/or any of its subsidiaries
and/or any of its affiliates ("UBS"). Products and services
mentioned in this material may not be available for residents of
certain jurisdictions. Past performance is not necessarily
indicative of future results. Please consult the restrictions
relating to the product or service in question for further
information. Activities with respect to US securities are conducted
through UBS Securities LLC, a US broker/dealer. Member of SIPC
(http://www.sipc.org/).
UBS specifically prohibits the redistribution or reproduction of
this material in whole or in part without the prior written
permission of UBS and UBS accepts no liability whatsoever for the
actions of third parties in this respect.
© UBS 2016. The key symbol, UBS and ETRACS are among the
registered and unregistered trademarks of UBS. Other marks may be
trademarks of their respective owners. All rights reserved.
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