SECURITIES AND EXCHANGE COMMISSION
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0303
Securities Exchange Act of 1934
Rule 14e-5
Exemptive letter: UBS Group AG - holding company reorganization
Response of the Office of Mergers and Acquisitions
Division of Corporation Finance
July 22, 2014
Via Facsimile and U.S. Mail
David B. Rockwell
Sullivan & Cromwell LLP
1 New Fetter Lane
London, EC4A 1AN
England
Re:
UBS AG – Holding Company Reorganization
Dear Mr. Rockwell:
We are responding to your letter dated July 22, 2014 addressed to Michele Anderson and
Christina Chalk, as supplemented by telephone conversations with the staff before and
after May 6, 2014, with regard to your request for exemptive relief. To avoid having to
recite or summarize the facts set forth in your letter, we attach the enclosed photocopy of
your correspondence and the accompanying letter from Swiss counsel. Unless otherwise
noted, all capitalized terms in this letter have the same meaning as in your letter of
today’s date.
On the basis of your representations and the facts presented in your July 22, 2014 letter,
the United States Securities and Exchange Commission hereby grants an exemption from
Rule 14e-5 pursuant to Rule 14e-5(d) under the Exchange Act. This exemption permits
the Prospective Purchasers to conduct the Market Activities in accordance with Swiss law
and regulation or pursuant to an exemption granted by the TOB on June 30, 2014. This
exemption further permits UBS Securities LLC, UBS Wealth Management and UBS
Global Asset Management to continue their limited U.S. Market Activities as described
in your letter and in the ordinary course of their respective businesses during the 14e-5
David Rockwell, Esq.
Sullivan & Cromwell LLP
July 22, 2014
Page 2
Restricted Period. This exemption further allows the use of the dual offer structure and
purchases pursuant to the Swiss Exchange Offer, as described in your letter.
In granting this relief, we note in particular the nature of this transaction as a corporate
reorganization, rather than a change of control transaction, in which UBS target shares
will be exchanged on a fixed one-for-one basis for shares in a new entity with no
established trading market. We further note the extended length of the 14e-5 Restricted
Period, the status of UBS as a financial institution, and its need to conduct the activities
for which relief is sought in order to service existing clients in the ordinary course of its
business as a financial institution operating globally, including in the United States. We
also note our discussions with staff of the TOB in connection with the proposed
transaction.
The Commission’s grant of an exemption from Rule 14e-5 is subject to the following
conditions:
The U.S. offering materials will prominently disclose the possibility of, or
intention to make future purchases of shares outside the Offer, and the extent to
which outside purchases have already occurred;
There will be public disclosure in the U.S., to the extent such information is
made public in Switzerland, of information regarding all purchases of shares
otherwise than pursuant to the Offer from the time of public announcement of
the Offer until its expiration;
The Prospective Purchasers will comply with any applicable rules against insider
trading and the rules and regulations of the applicable Swiss securities regulatory
authorities (in particular the rules regulating market conduct/market abuse);
The Prospective Purchasers will comply with all applicable Swiss matching and
best requirements with respect to purchases outside the Offer, as modified by the
Order and any other relief granted by the TOB;
Upon request of the Division of Corporation Finance, Prospective Purchasers
will disclose to the Division a daily time-sequenced schedule of all purchases of
shares made from the time of public announcement of the offer until the
expiration, on a transaction-by-transaction basis, including (i) description of the
size, broker (if any), time of execution and purchase price; (ii) if not executed on
the NYSE Euronext in Amsterdam, the exchange, quotation system or other
facility through which the purchase occurred;
Upon request of the Division of Corporation Finance, the Prospective Purchasers
will transmit the information specified in clauses (i) and (ii) above to the
Division at its offices in Washington D.C. within 30 days of the request;
David Rockwell, Esq.
Sullivan & Cromwell LLP
July 22, 2014
Page 3
The Prospective Purchasers will maintain all documents and other information
required to be maintained pursuant to this exemption for a period of not less than
two years from expiration of the offer;
Representatives of the Prospective Purchasers will be made available (in person
at the offices of the Division of Corporation Finance or by telephone) to respond
to inquiries relating to such records; and
Except as otherwise exempted herein, the Prospective Purchasers will comply
with Rule 14e-5.
The foregoing exemptive relief is based solely on the representations and the facts
presented in your letter of today’s date and the accompanying letter from Swiss counsel
of the same date and do not represent a legal conclusion with respect to the applicability
of the statutory or regulatory provisions of the federal securities laws. The relief is
strictly limited to the application to this transaction of the statutory provisions and rules
listed above. You should discontinue this transaction pending further consultations with
the staff if any of the facts or representations set forth in your letter change. In addition,
this position is subject to modification or revocation if at any time the Commission or the
Division of Corporation Finance determines that such action is necessary or appropriate
in furtherance of the purposes of the Exchange Act.
We also direct your attention to the anti-fraud and anti-manipulation provisions of the
federal securities laws, including Sections 10(b) and 14(e) of the Exchange Act, and Rule
10b-5 thereunder. The participants in this transaction must comply with these and any
other applicable provisions of the federal securities laws. The Division of Corporation
Finance expresses no view on any other questions that may be raised by the proposed
transaction, including but not limited to, the adequacy of disclosure concerning and the
applicability of any other federal or state laws to the proposed transaction.
Sincerely,
For the Commission,
By the Division of Corporation Finance
pursuant to delegated authority,
Michele M. Anderson
Chief, Office of Mergers and Acquisitions
Division of Corporation Finance
David Rockwell, Esq.
Sullivan & Cromwell LLP
July 22, 2014
Page 4
Enclosures
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MELBOURNE • SYDNEY
Securities Exchange Act of 1934
Rule 14e-5
July 22, 2014
Office of Mergers and Acquisitions,
Division of Corporation Finance,
Securities and Exchange Commission,
100 F. Street, N.E.,
Washington, D.C. 20549,
United States of America.
Attn:
Michele Anderson
Chief, Office of Mergers and Acquisitions
Christina Chalk
Senior Special Counsel, Office of Mergers and Acquisitions
Re:
UBSAG
Dear Ms. Anderson and Ms. Chalk:
We are writing on behalf of UBS AG, a corporation
(Aktiengesellschaft/société anonyme) organized under the laws of Switzerland (““
and, together with its subsidiaries, the “Group”), and its wholly owned subsidiary UBS
Group AG (“UBS Group”) in connection with the proposed reorganization outlined
below.
On May 6, 2014, UBS announced that it intends to establish a new nonoperating group holding company for the Group subject to regulatory approvals (the
“May 6 Announcement”).
The establishment of a group holding company is intended, along with
other measures UBS has already announced, to substantially improve the resolvability of
the Group in response to Swiss “too-big-to-fall” requirements and applicable
requirements in other countries in which the Group operates. Swiss “too-big-to-fail”
requirements require systemically important banks, including UBS and the Group, to put
Sullivan & Cromweil LLP carries on business iti England and Wales through Sullivan & Cromwell MNP LLR a registered limited liability partnership established under the laws of the Slate of New York.
The pereonal liability of our partners Is limited to the extent provided In such laws. Additional Information is available on request or at www.sullcrom.com.
Sullivan & Cromwet MNP LLP Is authorized and regulated by the Solicitors Regulation Authority (Number 00308712).
A list of the partrrera names and professional qualifications Is available for inspection at 1 New Fetter Lane, London EC4A lAN. All partners are either registered foreign lawyers or solicitors.
U.S. Securities and Exchange Commission
-2
in place viable emergency plans to preserve the operation of systemically important
functions despite a failure of the institution, to the extent that such activities are not
sufficiently separated in advance. The Swiss “too-big-to-fail” requirements provide for
the possibility of a limited reduction of capital requirements for systemically important
institutions that adopt measures to reduce resolvability risk beyond what is legally
required. These measures would involve an alteration of the legal structure of a bank
group in a manner that insulates parts of the group to exposure from risks arising from
other parts of the group, thereby making it easier to dispose of certain parts of the group
in a recovery scenario, to liquidate or dispose of certain parts of the group in a resolution
scenario or to execute a “debt bail-in”. As a consequence of the announcements UBS has
made regarding its legal structure, UBS believes that it is substantially enhancing the
resolvability of the Group in response to evolving global regulatory requirements. UBS
also anticipates that the exchange offer coupled with these other measures already
announced will allow the Group to qualify for a reduction in the buffer capital
requirements applicable to the Group as a systemically relevant Swiss bank under
applicable Swiss “too-big-to-fail” requirements.
Establishment of a group holding company predominantly for the purpose
of improving resolvability has been the subject of extensive discussions with the Swiss
Financial Market Supervisory Authority F1NMA and other regulators overseeing UBS.
Creation of a non-operating holding company for the Group is seen as essential to a
“single point of entry” resolution strategy, which is the preferred resolution strategy of
UBS and of the Swiss, U.S. and UK authorities. As mentioned above, UBS also
anticipates that these measures will allow it to qualify for a reduction in applicable buffer
capital requirements under the Swiss “too-big-to-fail” requirements. This rebate would
result in lower overall capital requirements for UBS.
In order to put in place the new group holding structure, UBS has created
a wholly owned subsidiary, UBS Group, which will become the new ultimate publicly
traded parent company of the Group by way of a share-for-share exchange offer (the
“Exchange Offer”). While UBS is currently contemplating an accelerated timetable
under which the new group holding company structure may be established as early as the
third quarter 2014, this period may be extended depending, among other factors, on the
availability of approvals and exemptions from multiple regulators internationally, with
the result that the new group holding company structure may not be in place until the
fourth quarter 2014 or even the first quarter 2015.
As a global, integrated financial services firm with businesses in private
banking, asset management, investment banking and retail and commercial banlcing, the
Group engages in market activities in UBS ordinary shares (“UBS Shares”) and related
securities in the ordinary course, including, among other things, to facilitate customer
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U.S. Securities and Exchange Commission
transactions and provide liquidity to the market, serve existing clients and hedge its
financial exposures. As the May 6 Announcement constitutes a “public announcement”
of the Exchange Offer within the meaning of Rule 14e-5, the critical need for UBS,
UBS’s subsidiaries and their respective separately identifiable departments (collectively,
the “Prospective Purchasers”) to continue to carry out their ordinary-course activities
forms the backdrop of the relief requested in this letter.
The market activities for which relief is requested are substantially similar
to the market activities for which relief has previously been granted to the Group under
Regulation M in connection with the distribution of a stock dividend and the rights
offering conducted by UBS in 2008.’ In each case, the grant of relief was based in part
on statistical information regarding UBS’s role as a prominent participant in the market
for UBS Shares and the availability of exemptions or safe harbors under applicable local
law permitting the activities in question to continue. In both cases, the Staff of the
Securities and Exchange Commission (the ““) granted the requested relief based on
those representations.
The need for relief is particularly acute in light of the potentially lengthy
period that may elapse between “public announcement” and completion of the Exchange
Offer, as laid out above, and the importance of the Group’s activities to the market for the
UBS Shares and related financial instruments. The May 6 Announcement was made
following discussions with several of UBS’s regulators in Switzerland and internationally
and in order to comply with applicable listing rules of the SIX Swiss Exchange (“S”)
and mitigate the risks of unplanned disclosure. The period between the May 6
Announcement and completion of the Exchange Offer could be as long as nine months,
and withdrawal of the Group from the markets for UBS Shares and various related
securities for such a long period of time would cause a number of significant difficulties
for those markets, the Group and its customers, as described in greater detail below.
Furthermore, Rule 14e-5’s prohibitions apply to this transaction not
because of its nature or objective, which essentially consists in the insertion of a new
holding company on top of the Group, but simply because Swiss corporate law does not
offer the same legal structure a merger by majority vote as U.S. domestic state law
would to effect the desired corporate reorganization.
—
—
See UBS AG (avail. April 22, 2008) and UBS AG (avail. May 16, 2008). In those instances, in the
absence of relief, certain affiliates and business divisions of UBS may have been prohibited under
Regulation M from bidding for or purchasing, or attempting to induce any person to bid for or
purchase, UBS shares during the relevant restricted period.
U.S. Securities and Exchange Commission
-4
In this context and as previously discussed with members of the Staff, we
respectftully request on behalf of UBS that the Staff grant exemptive relief from Rule 1 4e
5 under the Exchange Act (a) to permit the Market Activities (as defined below) engaged
in by the Prospective Purchasers in the ordinary course of business outside the United
States, (b) to permit certain Prospective Purchasers to continue to conduct limited Market
Activities in UBS securities in the ordinary course of business in the United States and
(c), in the light of the exemptive relief requested to be granted herein with respect to the
Market Activities, to permit the contemplated dual structure of the Exchange Offer.
We are acting as U.S. counsel to UBS and UBS Group in connection with
the matters described in this letter. UBS has provided us with, and authorized us to make
on its behalf, the factual representations set forth in this letter. The statements contained
in this letter with respect to the application of Swiss law to the Exchange Offer or to UBS
have been reviewed by Bar & Karrer AG, Swiss counsel to UBS.
I.
Background
A.
UBS
UBS is a global, integrated financial services firm with businesses in
private banking, asset management, investment banking and retail and commercial
banking. UBS has offices worldwide and its principal executive offices are located in
Zurich and Basel, Switzerland. UBS is a foreign private issuer as defined in Rule 3b-4(c)
under the Exchange Act, and the UBS Shares are registered under Section 12(b) of the
Exchange Act. UBS Shares are currently listed on the SIX and on the New York Stock
Exchange (“NYSE”). As of March 31, 2014, UBS had 3,843,383,192 issued UBS
Shares, of which 92,241,706 were treasury shares.
B.
UBS Group
UBS Group is a corporation (Aktiengesellschaft/sociéte anonyme)
organized under the laws of Switzerland. UBS Group has no revenue-generating
business operations and no material assets or liabilities other than in connection with the
Exchange Offer.
UBS Group is a “foreign private issuer” as defined in Rule 3b-4(c) under
the Exchange Act and a “business combination related shell company” as defined in
Rule 12b-1 under the Exchange Act and Rule 405 under the Securities Act. If the
exchange offer is successful, UBS Group will become the new listed parent company of
UBS, which is currently both the ultimate parent company and the primary operating
entity of the Group.
U.S. Securities and Exchange Commission
C.
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The Exchange Offer
1.
Structure of the Exchange Offer
UBS expects that the Exchange Offer will consist of two separate offers to
be conducted on substantially similar terms and subject to the same conditions. In
Switzerland, UBS Group will initiate a share exchange offer open to all holders of UBS
Shares, wherever located, by publishing a “pre-announcement” or, in the absence of such
pre-announcement, an offer prospectus (the “Swiss Exchange Offer”). UBS Group will
also file with the SEC a registration statement on Form F-4 (the “Registration
Statement”) relating to a separate share exchange offer addressed to holders of UBS
Shares that are located in the United States (the “U.S. Exchange Offer”). As discussed
below, UBS expects that the Exchange Offer will be eligible for the tier II relief (“Tier II
Relief’) provided by Rule 14d-l(d) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”).
The Exchange Offer will be made for any and all UBS Shares (including
UBS Shares held in treasury by UBS) on a one-for-one basis. The Swiss Exchange Offer
is being made to all holders of UBS Shares, wherever located, in accordance with local
laws, regulations and restrictions, pursuant to separate offer documentation, including, for
holders of UBS Shares located in one or more member states of the European Economic
Area, a separate prospectus. The U.S. Exchange Offer will comprise an offer to
exchange one UBS Share for one UBS Group Share made pursuant to the Registration
Statement and U.S. offer documents addressed to holders of UBS Shares located in the
United States.
The Exchange Offer will comprise an initial offer period (the “Initial Offer
Period”) and, if the Exchange Offer is successful, a subsequent offer period (the
“Subsequent Offer Period”). In order to comply with applicable Swiss and U.S. tender
offer rules, the Initial Offer Period will remain open for a minimum of 20 Swiss and U.S.
business days. If the Exchange Offer is successful, UBS Group will accept for exchange
and exchange all UBS Shares that have been validly tendered into, and not withdrawn
from, the Exchange Offer by the end of the Initial Offer Period and will conduct the
Subsequent Offer Period.
If, in the Exchange Offer or within three months thereafter, UBS Group
acquires more than 98% of the total UBS Shares in issue, UBS Group intends to effect a
squeeze-out of the holders of the less than two percent remaining UBS Shares (the
“SESTA Squeeze-Out”) by filing a request with the competent court in Switzerland to
invalidate such shares pursuant to the Swiss Federal Act on Stock Exchanges and
U.S. Securities and Exchange Commission
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Securities Trading (the “SESTA”). Holders of the UBS Shares being invalidated in this
process will receive UBS Group Shares on a one-for-one basis.
If, during the same period or at any time thereafter, UBS Group acquires
between 90% and 98% of the total UBS Shares in issue, UBS Group expects to conduct a
forward triangular squeeze-out merger (the “Squeeze-Out Merger” and, together with the
SESTA Squeeze-Out, the “Squeeze-Out”) pursuant to the Swiss Federal Act on Merger,
De-Merger, Transformation and Transfer of Assets of October 3, 2003 (the “Merger
ç”). In a Squeeze-Out Merger, UBS would merge into a subsidiary of UBS Group,
with such subsidiary being the surviving entity. If a Squeeze-Out Merger occurs,
remaining holders of UBS Shares will receive one UBS Group Share for each UBS Share
they hold.
The board of directors of UBS Group will, after the first capital increase in
connection with the settlement of the Initial Offer Period, be the same as the board of
directors of UBS. UBS Group shares will be governed by Swiss law and articles of
association substantially similar to UBS ‘s current articles of association.
Accordingly, UBS expects that the Exchange Offer will be structured so
that holders of UBS Shares can maintain the same proportional interests in UBS Group as
those they hold in UBS. As a result, the Exchange Offer will not involve a change of
control. Instead, shareholders in the Group will effectively be asked to consent, by
participation in the Exchange Offer, to the implementation of a corporate reorganization
consisting of the formation a new group holding company (UBS Group).
2.
qualification for Tier II Relief
UBS expects that UBS Group will be able to rely on Rule 14d-l(d) under
the Exchange Act, which provides exemptive relief from otherwise applicable rules to
persons engaged in a tender offer under Tier II Relief, in conducting the Exchange Offer.
In order for an offer to qualify for Tier II Relief, (i) the subject company must be a
foreign private issuer as defined in Rule 3b-4 under the Exchange Act and not an
investment company as defined under the Investment Company Act of 1940, (ii) no more
than 40% of the securities of the subject company sought in the offer may be held by
holders who are resident in the United States and (iii) the offeror must comply, subject to
any applicable exemptions, with all applicable U.S. tender offer rules and regulations.
UBS, the subject company, is a foreign private issuer. Based on a look
through shareholder analysis performed by Georgeson Shareholder Communications Inc.
U.S. Securities and Exchange Commission
(“Georgeson”) pursuant to instruction 2 to paragraphs (c) and (d) of Rule 14d-1(d) under
the Exchange Act, approximately 24.5% of the total UBS Shares in issue are held by
States. Georgeson performed this look-through
holders who are resident in the United 2
analysis to determine the ownership of UBS Shares as of April 30, 2014, a date which is
less than 60 days before the May 6 Announcement. Thus, UBS believe that the Tier II
Relief contemplated by Rule 14d-l(d)(l)(ii) is available.
3.
Regulation 14D
Application of Section 14(d) of the Exchange Act and
Section 1 4(d)( 1) of the Exchange Act applies to any “tender offer for [...]
any class of any equity security which is registered pursuant to Section 12 of this title
[...j if, after consummation thereof, such person would, directly or indirectly, be the
beneficial owner of more than five per centum of such class.” Rule 14d-1 under the
Exchange Act states that “Regulation 1 4D [...] shall apply to any tender offer that is
subject to section 1 4(d)( 1) of the {Exchangej Act [...j including, but not limited to, any
tender offer for securities of a class described in that section that is made by an affiliate
of the issuer of such class.” The UBS Shares are currently registered pursuant to Section
12(b) of the Exchange Act. After the consummation of the Exchange Offer, UBS Group,
an affiliate of UBS, will be the beneficial owner of greater than 5% of the UBS Shares.
Therefore, UBS expects that the Exchange Offer will be subject to Regulation 14D.
IL
Description of Market Activities
A.
Background and Marketfor UBS Shares and Related Securities
In the ordinary course of their businesses, the Prospective Purchasers
conduct an extensive array of trading and other market activities in connection with UBS
Shares or derivatives related to such securities (including, without limitation, futures,
forwards, options, swaps or similar instruments) (collectively, the “UBS Securities”). As
indicated above, the critical need for the Prospective Purchasers to continue to carry out
their ordinary-course activities following announcement of the Exchange Offer forms the
backdrop of the relief requested in this letter.
The UBS Shares are listed on the SIX and the NYSE. During 2013, the
worldwide average daily trading volume of UBS Shares was approximately 19 million
shares, or CHF 319 million (or approximately US$ 358 million at the exchange rate on
2
It is UBS’s view that this figure probably overstates the level of U.S. ownership due to the proportion
of U.S. custodians holding UBS Shares.
U.S. Securities and Exchange Commission
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December 31, 2013) in value. In the first three months of 2014, the worldwide average
daily trading volume of UBS Shares was approximately 22 million shares, or CHF 408
million (or approximately US$ 459 million at the exchange rate on March 31, 2014) in
value.
As of December 31, 2013, UBS ‘ s aggregate market capitalization was
approximately CHF 65 billion (or approximately US$ 73 billion at the exchange rate on
December 31, 2013) and UBS ‘s free-float adjusted market capitalization was
approximately CHF 61 billion (or approximately US$ 68 billion at the exchange rate on
December 31, 2013). As of March 31, 2014, UBS ‘s aggregate market capitalization was
approximately CHF 70 billion (or approximately US$ 79 billion at the exchange rate on
March 31, 2014) and its free-float adjusted market capitalization was approximately CHF
66 billion (or approximately US$ 74 billion at the exchange rate on March 31, 2014). As
of March 31, 2014, UBS was the fourth largest listed Swiss company in terms of market
capitalization.
The SIX is the principal trading market for UBS Shares. During 2013, the
SIX accounted for approximately 52% of the worldwide average daily trading volume in
UBS Shares. During 2013, the average daily trading volume of UBS Shares on the SIX
was approximately 11 million shares, or CHF 177 million (or approximately US$ 199
million at the exchange rate on December 31, 2013) in value. In the first three months of
2014, the SIX accounted for approximately 48% of the worldwide average daily trading
volume in UBS Shares and the average daily trading volume of UBS Shares on the SIX
was approximately 11 million shares, or CHF 203 million (or approximately US$ 229
million at the exchange rate on March 31, 2014) in value.
The SIX, formerly SWX, was founded in 1995. It is a recognized
investment exchange under the SESTA, supervised by the Swiss Financial Market
Supervisory Authority (the “FINMA”). The procedure for listing Swiss blue chip
equities is under the authority of the SIX.
The SIX provides for an electronic trading order book. It is an orderdriven market with transactions occurring through the automatic matching of buy and sell
orders. In general, orders are executed giving priority to price and then to time of entry.
In 2013, the aggregate turnover on the SIX was in excess of CHF 1,004
billion, of which CHF 702 billion related to Swiss equity securities. As of December 31,
2013, the overall market capitalization of equity securities traded on the SIX was
approximately CHF 1.4 trillion. As of March 31, 2014, there were 288 equity securities
admitted to trading on the SIX (excluding exchange-traded funds), of which 252 were
Swiss securities and the remainder were foreign securities.
U.S. Securities and Exchange Commission
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There are a number of key market indices under the authority of the SIX.
These market indices include, among others, (i) the Swiss Market Index (the “SMI”)
which is comprised of 20 equity securities of the most prominent companies listed on the
SIX and, as of December 3 1, 2013, represented approximately 83% of the free-float total
market capitalization of the SIX, (ii) the Swiss Performance Index (the “$j”), which
mainly consists of SIX-traded equity securities of companies domiciled in Switzerland or
the Principality of Liechtenstein, and (iii) the SLI Swiss Leader Index (the “SLI”), which
includes the 30 most liquid domestic stocks traded on the Swiss equity market, including
the equity securities included in the SMI. The SIX serves as a trading platform for the
shares included in the SMI, SPI and SLI.
The UBS Shares are a significant component of the SIX. The UBS Shares
comprised 6.4% of the SMI, 5.3% of the SPI and 13.3% of the SLI as of March 31, 2014.
The UBS Shares are also traded on UBS MTF, BATS Chi-X Europe and
Turquoise:
•
UBS MTF was created by UBS Investment Bank and is operated by
UBS Limited. It is a non-displayed multilateral trading facility (or
“dark pool”) with a central counterparty model and clearing through
SIX x-clear and EuroCCP. UBS MTF provides mid-point, bid and
offer matching based on prevailing prices on the primary markets.
Orders on UBS MTF only match when the primary market is in a
trading phase for the relevant instrument. Trades executed on UBS
MTF are reported post-trade in real time to Markit BOAT. Trading on
UBS MTF accounted for approximately 1.24% of the worldwide
average trading volume in UBS Shares during 2013.
•
BATS Chi-X Europe is a securities firm authorized by the Financial
Conduct Authority to operate as a multilateral trading facility for the
trading of a wide range of European equities. BATS Chi-X Europe is
a subsidiary of BATS Global Markets. Trading on BATS Chi-X
Europe accounted for 9% of the worldwide average daily trading
volume in UBS Shares during 2013.
•
Turquoise Global Holdings Limited is an investment firm authorized
by the Financial Conduct Authority of the United Kingdom and
currently majority owned by the London Stock Exchange Group. It
operates Turquoise, a multilateral trading facility with two discrete
trading platforms: one for cash equities and another for derivatives.
The equity platform allows secondary trading for pan-European and
U.S. Securities and Exchange Commission
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U.S. equities, exchange traded funds, global depositary receipts,
American depositary receipts, exchange-traded currency funds and
exchange-traded commodity funds. Trading on Turquoise accounted
for approximately 6% of the worldwide average trading volume in
UBS Shares during 2013.
In May 2000, UBS listed the UBS Shares on the NYSE. The UBS Shares
are listed on the NYSE in the form of shares; UBS is not aware of any UBS Shares
trading in the form of American Depositary Shares in the United States. During 2013,
the average daily trading volume of UBS Shares on the NYSE was approximately 0.4
million shares, or CHF 6 million (or approximately US$ 7 million at the exchange rate on
December 31, 2013) in value. During 2013, the United States accounted for
approximately 15% of worldwide average daily trading volume in the UBS Shares. In
the first three months of 2014, the average daily trading volume of UBS Shares on the
NYSE was approximately 0.4 million shares, or CHF 7 million (or approximately US$ 7
million at the exchange rate on March 31, 2014) in value. In the first three months of
2014, the United States accounted for approximately 11% of worldwide average daily
trading volume in the UBS Shares.
B.
UBS ‘s Business as a Financial Institution
UBS Investment Bank. UBS Investment Bank (“UBS_TB”) is part of the
Group and operates as one of five separate business divisions. UBS TB conducts a fullservice securities business. Although UBS TB has offices throughout the world outside
the United States, its principal executive offices are located in Zurich, and the Market
Activities for which UBS is seeking relief will be managed principally by representatives
in Zurich and London. UBS TB operations are conducted through entities regulated by
and licensed under the Swiss Federal Act on Banks and Savings Institutions and the
SESTA in Switzerland and the Financial Services and Markets Act in the United
Kingdom, among other laws and regulations.
UBS Securities LLC. In the United States, UBS lB conducts a securities
business through a separate subsidiary, UBS Securities LLC, which has its principal
offices in Stamford, Connecticut and New York City. UBS Securities LLC is registered
with the SEC as a broker-dealer and is a member of the Financial Industry Regulatory
Authority and the NYSE. UBS Securities LLC will not engage in the UBS lB activities
for which UBS is seeking relief (other than unsolicited brokerage and riskless principal
activity, including for Wealth Management and Global Asset Management).
UBS Wealth Management. The Group’s wealth management business
divisions, Wealth Management and Wealth Management Americas (collectively, “UBS
U.S. Securities and Exchange Commission
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Wealth Management”), are comprised of the Swiss and other non-U.S. and U.S. wealth
management businesses, respectively. Wealth Management’s principal offices are
located in Zurich. In the United States, Wealth Management Americas conducts its
wealth management business principally through UBS Financial Services Inc. (“UBS
Financial Services”), a registered broker-dealer and investment adviser, which is a wholly
owned indirect subsidiary of UBS. UBS Financial Services is headquartered in
Weehawken, New Jersey, and has more than 400 offices across the United States. In
addition to UBS Financial Services, Wealth Management Americas also conducts its
wealth management business through other entities, including UBS Financial Services
Incorporated of Puerto Rico, an SEC-registered broker-dealer and investment adviser,
UBS Bank USA, a state-chartered FDIC-insured depository institution, UBS Trust
Company NA, a limited purpose trust company regulated by the Office of the
Comptroller of the Currency (“0CC”), as well as through branches of UBS maintained in
the United States and regulated by the 0CC.
UBS Asset Management. The Group’s asset management division, UBS
Global Asset Management, operates as a separate business division. Outside the United
States, its principal offices are in Zurich, Basel, London, Singapore and Hong Kong. In
the United States, it is comprised of three separate business sub-groups: (a) Alternative &
Quantitative, (b) Global Real Estate and (c) Equities, Fixed Income & Global
Investments Solutions. All three sub-groups operate out of separate, wholly owned
subsidiaries of UBS, which in the United States are U.S. registered investment advisers,
and operate wholly independently of UBS TB. The principal U.S. offices for the
Alternative & Quantitative and Equities, Fixed Income & Global Investments Solutions
sub-groups are in Chicago, Illinois, while the Global Real Estate sub-group has its
principal U.S. offices in Hartford, Connecticut.
Group Treasury. UBS’s group treasury department (“UBS_GT”) is part of
UBS Corporate Center, a department of UBS, with principal executive offices in Zurich.
UBS GT is principally responsible for the management of UBS’s financial resources and
financial infrastructure. Among other responsibilities, UBS GT manages the Group’s
equity, including UBS’s treasury shares, taking into account financial ratios and
regulatory capital requirements.
C.
Market Activities by the Prospective Purchasers
UBS is requesting relief for the activities described below, as well as for
any other purchases of or arrangements to purchase UBS Securities outside the United
States that would be exempt from the prohibition of Rule 1 4e-5 by virtue of Section
(b)( 12) thereof but for the exemptive relief sought by this letter (the activities described
in this sentence being referred to collectively as the “Market Activities”). UBS has
U.S. Securities and Exchange Commission
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confirmed that the Market Activities are permitted under and will be conducted in
accordance with applicable Swiss law or, at any time they are potentially prohibited by
Swiss takeover rules, UBS will seek exemptive relief from the Swiss Takeover Board
(the “TOB”), to the extent not already granted by the TOB’s exemptive order dated June
30, 2014, and will conduct its Market Activities in accordance with such exemptive
relief. In addition, UBS has confirmed that all of the Market Activities described below
together (counting all sides of each trade in which it participates) accounted for
approximately 14% of the average daily worldwide trading volume in UBS Shares in
2013 and approximately 11% of such total average daily trading volume in the first three
months of 2014.
UBS maintains and enforces written policies and procedures that are
reasonably designed to prevent the transfer of information to or from the entities and
departments conducting the Market Activities that might result in a violation of the U.S.
federal securities laws (the “Information Barriers”). These Information Barriers, some of
which are also required by Swiss rules and regulations, are intended to prevent improper
motives from influencing the purchasing activity of these entities and departments and to
prevent the flow of confidential information between the senior management and
corporate development teams of UBS on the one hand, and the trading and investment
management divisions of UBS, on the other hand. In their Market Activities, the
Prospective Purchasers will comply with the applicable requirements under Swiss and
U.S. law, including the applicable rules and regulations of the relevant exchanges and
trading facilities.
Market Making and Principal Client Facilitation in UBS Shares. UBS lB
conducts its market-making activities outside the United States and manages these
activities from Zurich and London. UBS TB purchases and sells UBS Shares as principal
to facilitate customer transactions and provide liquidity to the market. Most of these
market-making transactions are effected on the SIX, with the balance effected on UBS
MTF, BATS Chi-X Europe, Turquoise and in the Swiss over-the-counter market and, in
some cases, the over-the-counter markets elsewhere outside the United States. As noted
above, the SIX is an order-matching system, not an inter-dealer market with formal,
officially designated market makers. Thus, with regard to UBS Shares, neither UBS lB
nor any other dealer is obligated to make a market or to comply with any particular
market-maker requirements, and they are free to discontinue market making at any time.
UBS TB’s market-making activities accounted for approximately 0.2% of SIX average
daily trading volume in UBS Shares in 2013 and approximately 0.3% of such average
daily trading volume in the first three months of 2014. UBS lB engages in the Market
Activities described above solely in the ordinary course of business and not in
furtherance of or to facilitate the Exchange Offer.
U.S. Securities and Exchange Commission
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Derivatives Market Making and Hedging. UBS lB conducts its
derivatives market-making activities outside the United States and manages these
activities principally from Zurich and London. In Switzerland, IJBS lB is admitted under
EUREX rules as a market maker, and is one of the most significant market makers in
derivatives on UBS Shares, accounting for approximately 16% of the average daily
market-making volume in such derivatives in 2013 and approximately 12% of such total
average trading volume in the first three months of 2014. This activity involves the
issuance, purchase and sale of derivative products for its own account and for the
accounts of its customers on Scoach and EUREX and in the over-the-counter market in
States. These derivative products may
Switzerland and elsewhere outside the United 3
include both currently existing and newly designed listed and over-the-counter options,
warrants and other securities (including exchange-traded funds and portfolio-type
instruments) that are exercisable for or convertible into, or the value of which is
determined by reference to, UBS Shares or proprietary or third-party baskets or indices
including UBS Shares. These derivatives may also include futures on the foregoing.
UBS lB’s derivatives market making involves issuing, purchasing and selling derivatives
on UBS Shares in order to facilitate customer orders and provide liquidity to the market.
In addition, as a result of its derivatives market making, UBS TB maintains
varying positions in these derivatives, and its financial exposure to movements in the
price of the UBS Shares varies from time to time. In order to manage this financial
exposure, UBS lB continually enters into hedging transactions that involve, in whole or
in part, purchases and sales of UBS Shares for UBS lB’s own account. UBS lB also
effects brokerage transactions in UBS Shares, on an unsolicited basis, on behalf of its
customers in order to assist them in hedging their derivatives positions.
UBS lB engages in the Market Activities described above solely in the
ordinary course of its business and not in furtherance of or to facilitate the Exchange
Offer. These Market Activities occur primarily on the SIX, with the balance occurring on
BATS Chi-X Europe, UBS MTF, Turquoise and in the over-the-counter market in
Switzerland and, in some cases, over-the-counter markets elsewhere outside the United
States.
Unsolicited Brokerage. UBS lB effects unsolicited brokerage transactions
in UBS Shares by placing orders on the SIX or BATS Chi-X Europe or effecting trades
as agent in the over-the-counter market in Switzerland and elsewhere outside the United
This may include NYSE Euronext, OMX, IDEM (the Italian Derivatives Exchange Market) or Bolsa
de Madrid.
U.S. Securities and Exchange Commission
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States. These transactions arise from unsolicited buy and sell orders received from its
customers. As noted above, UBS Securities LLC may also engage in unsolicited
brokerage transactions with its customers in the United States. UBS lB and UBS
Securities LLC engage in the Market Activities described above solely in the ordinary
course of their respective businesses and not in furtherance of or to facilitate of the
Exchange Offer.
Trading in UBS Securities by UBS Wealth Management. As part of its
wealth management activities, UBS Wealth Management buys and sells securities,
including UBS Shares and derivatives on UBS Shares, for its clients’ accounts pursuant
to discretionary or non-discretionary mandates. Under applicable laws, including Swiss
laws and the laws of New York, among others, and subject to the terms of any contractual
arrangements as in effect from time to time between UBS Wealth Management and its
clients, UBS Wealth Management has a fiduciary duty to conduct its investment advisory
management activities in a manner that is in the best interests of its clients and is
prohibited by contract and by law from taking into account any factors other than the
interests of its clients in making investment decisions. In addition, UBS Wealth
Management has fiduciary or similar duties to make recommendations as to non
discretionary advisory accounts in a manner that is in the best interests of its clients. UBS
Wealth Management also has a contractual duty to follow the investment instructions of
clients holding non-discretionary advisory and brokerage accounts.
Accordingly, TIBS Wealth Management will be prohibited by contract and
by law from following a directive by UBS to cease trading UBS Shares or derivatives on
UBS Shares, unless UBS Wealth Management believed that cessation of such trading
was in the best interests of its clients. Similarly, UBS Wealth Management will be
prohibited by contract and by law from following a UBS directive to bid for or purchase
UBS Shares or derivatives on UBS Shares unless it independently concluded that such
bids or purchases were in the best interests of its clients.
For the 12 months ended December 31, 2013, these activities of UBS
Wealth Management accounted for approximately 4% of the worldwide average daily
trading volume in UBS Shares, all of which was executed through UBS lB. UBS Wealth
Management engages in these Market Activities solely in the ordinary course of business
and not in contemplation of the Exchange Offer. These Market Activities are conducted
both outside and inside the United States and primarily in Switzerland and the United
Kingdom through the facilities of the SIX and in the United States through the facilities
of the NYSE.
Trading in UBS Shares by UBS Global Asset Management. As part of its
investment management activities, UBS Global Asset Management invests in securities,
U.S. Securities and Exchange Commission
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including UBS Shares and derivatives on UBS Shares, for its clients’ accounts managed
pursuant to various mandates, including actively managed core portfolios, growth,
quantitative or passive strategies. However, in the United States, UBS Global Asset
Management generally does not invest in UBS Shares and derivatives on UBS Shares for
its clients’ accounts except for accounts managed pursuant to quantitative and passive
strategies. Under applicable laws, including Swiss laws and the U.S. Investment
Advisers Act of 1940, among others, and subject to the terms of any contractual
arrangements as in effect from time to time between UBS Global Asset Management and
the relevant client accounts, UBS Global Asset Management has a fiduciary duty to
oversee client accounts in a manner that is in the best interests of its clients. UBS Global
Asset Management is prohibited by contract and by law from taking into account any
factors other than the interests of the beneficiaries of client accounts in making
investment decisions.
Accordingly, UBS Global Asset Management will be prohibited by
contract and by law from following a UBS directive to bid for or purchase UBS Shares or
derivatives on UBS Shares unless it independently concluded that such bids or purchases
were in the best interests of the beneficiaries of client accounts.
For the 12 months ended December 31, 2013, these activities of UBS
Global Asset Management accounted for less than 0.3% of the worldwide average daily
trading volume in UBS Shares, of which a substantial portion was executed through UBS
lB. UBS Global Asset Management engages in these Market Activities solely in the
ordinary course of business and not in furtherance of or to facilitate the Exchange Offer.
These Market Activities are conducted outside the United States, except that investments
in UBS Shares and related securities are also carried out in the United States to execute
quantitative and passive strategies (these Market Activities in the United States, together
with unsolicited brokerage by UBS Securities LLC and Market Activities conducted by
UBS Wealth Management in the United States, collectively, the “U.S. Market
Activities”) and primarily in Switzerland and the United Kingdom through the facilities
of the SIX and in the United States through the facilities of the NYSE.
Trading in UBS Shares Pursuant to Employee Incentive Plans. UBS GT
regularly purchases UBS Shares on the open market to facilitate the grant of awards or
the exercise of options pursuant to the terms of UBS’s employee share and option plans,
and buy back UBS Shares that are forfeited or sold in accordance with those plans.
Furthermore, in order to hedge against the share price risks arising from the grant of
notional shares to UBS directors, members of management and employees, UBS GT
purchases and sells UBS Shares in the open market.
U.S. Securities and Exchange Commission
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UBS’s Human Resources department has delegated the administrative
function under the UBS Plans to a UBS organizational unit called “Corporate Employee
Financial Services” (“CEFS”). While CEFS also serves third-party clients, it currently
operates out of UBS and it relies on UBS GT to source UBS Shares for the UBS Plans.
UBS GT also sells UBS Shares from time to time on the open market in order to cover
social and tax expenses that are incurred when share awards vest.
These activities of UBS GT, which are conducted outside the United
States and in accordance with UBS’s fiduciary duties arising from those plans,
historically have represented a small proportion of all trading in UBS Shares. For the 12
months ended December 31, 2013, the average daily trading volume of UBS Shares
traded pursuant to these activities represented approximately 1% of the worldwide
average daily trading volume in UBS Shares. UBS GT engages in the Market Activities
described above solely in the ordinary course of its business and not in furtherance of or
to facilitate the Exchange Offer.
III.
Application of Rule 14e-5
A.
General
Subject to certain exceptions, Rule 1 4e-5 prohibits a “covered person”
or
from, directly indirectly, purchasing or arranging to purchase any equity securities in
the target company or any securities immediately convertible into, exchangeable for or
exercisable for equity securities in the target company, except as part of the tender offer.
This prohibition applies from the time of public announcement of the tender offer until
the tender offer expires (the “14e-5 Restricted Period”). “Covered person” is defined as
(a) the offeror and its affiliates, (b) the offeror’s dealer-manager and its affiliates, (c) any
advisor to any of the foregoing, whose compensation is dependent on the completion of
the offer, and (d) any person acting, directly or indirectly, in concert with any of the
persons specified above.
Rule 1 4e-5 is designed to prevent manipulative and deceptive practices
whereby a person making a cash tender or exchange offer purchases (or arranges to
purchase) shares otherwise than pursuant to the offer. Among the concerns that
Rule 1 4e-5 is designed to prevent are avoidance of pro-rationing requirements, disparate
treatment of persons who tender into the offer and persons who sell securities outside the
offer, and holders of large blocks of the subject securities demanding greater or different
consideration than that offered pursuant to the tender or exchange offer. None of these
concerns will be present in the context of the Exchange Offer, particularly in view of its
one-for-one nature.
U.S. Securities and Exchange Commission
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In response to comment letters requesting codification of relief for
in Rule 1 4e-5, the SEC stated it would consider individual requests
institutions
financial
on a case-by-case basis in the SEC Guidance and Revisions to the Cross-Border Tender
Offer, Exchange Offer, Rights Offerings, and Business Combination Rules and
Beneficial Ownership Reporting Rules for Certain Foreign Institutions, dated September
19, 2008 (the “2008 Cross-Border Amendments Release”; see Section 2.C.7).
As a global, integrated financial services firm, UBS’s need for the
requested relief is much more acute than would be the case for a non-financial institution.
As discussed above, the Prospective Purchasers’ Market Activities account for a
significant portion of worldwide trading volume in the UBS Securities. The withdrawal
of the Prospective Purchasers from the markets for UBS Securities could adversely affect
the liquidity of those markets and increase price volatility. Additionally, as laid out in
greater detail below, not being able to conduct the Market Activities will impair the
ability of UBS IB, UBS Wealth Management and UBS Global Asset Management to
serve existing clients. Inability to engage in the Market Activities will also impair the
UBS Group’s ability to hedge its existing financial exposures. UBS’s business as a
financial services firm exposes it in particular to these factors that would not arise (or
would arise only to a much lesser extent) for a non-financial institution.
The potential length of the 14e-5 Restricted Period (up to nine months or
even more) and the uncertain timing of the Exchange Offer magnify these negative
effects. The announcement of the Exchange Offer so long before the planned
commencement was driven by UBS’s on-going discussions with several of its regulators
and the need to announce the Exchange Offer to comply with UBS’s disclosure
obligations under Swiss law and to protect against the risks of unplanned disclosures.
Moreover, we note that the fact that the Exchange Offer is in substance a
corporate reorganization and does not involve a change of control mitigates the risks of
any fraudulent or manipulative behavior. As the Exchange Offer will be conducted on a
one-for-one basis by a wholly owned entity with no operations and only nominal assets,
UBS shareholders will have the ability to maintain their proportional interest in the new
holding company. The Group will also continue to be substantially the same save for the
structural changes described in this letter. As a result, there are no incentives for any
parties to manipulate the price of the UBS Securities.
B.
Non-US. Market Activities
1.
Relief Requested
We respectfully request that the Staff grant exemptive relief from Rule
14e-5 pursuant to Rule 14e-5(d) under the Exchange Act to permit the Market Activities
U.S. Securities and Exchange Commission
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(excluding, for this purpose, the U.S. Market Activities, which are the subject of Section
III.C below) to be conducted by the Prospective Purchasers in accordance with applicable
Swiss law and regulation or, at any time they would be prohibited by Swiss takeover
rules, to be conducted pursuant to an exemption from the TUB as required.
Please note that, in our view, it is doubtful that the jurisdictional predicate
for the application of the Exchange Act, namely that there be a purchase of a security “by
use of the mails or by any means or instrumentality of interstate commerce or of any
facility of a national securities exchange,” would be satisfied if any of the Prospective
Purchasers purchased, or made arrangements to purchase, UBS Securities outside the
United States. We nonetheless apply, on behalf of such persons, for the relief described
in this Section III.B. We have been requested by UBS to emphasize that this letter does
not reflect an admission that Rule 1 4e-5 would apply to such purchases of securities
outside the United States in the absence of applicable exemption or relief.
2.
Discussion
Rule 14e-5(b)(12) under the Exchange Act permits purchases of, or
arrangements to purchase, securities subject to a tender offer by an affiliate of a financial
advisor or an offeror and its affiliates to be made outside the United States in accordance
with the laws of the target company’s home jurisdiction if certain conditions are met,
including that no purchases or arrangements to purchase otherwise than pursuant to the
tender offer are made in the United States. In the current instance, UBS intends that any
purchases of UBS Securities by the Prospective Purchasers outside the United States that
would otherwise be prohibited by Rule 14e-5 (e.g., because not otherwise exempted by
the other provisions of the Rule) will meet the conditions imposed by Rule 14e-5(b)(12),
with the exception that certain purchases and arrangement to purchase otherwise than
pursuant to the Exchange Uffer may occur in the United States pursuant to the relief
4
requested in part III.C of this letter.
Specifically, UBS intends that: (i) except as otherwise exempted from the prohibition of Rule 14e-5
and subject to the exemptive relief sought herein, no purchases of or arrangements to purchase UBS
Securities other than pursuant to the Exchange Offer will be made in the United States; (ii) prominent
disclosure of the possibility of purchases by the Prospective Purchasers other than pursuant to the
Exchange Offer will be included in the U.S. offering materials; (iii) prominent disclosure of the
manner in which information regarding such purchases will be disseminated will be included in the
U.S. offering materials; and (iv) the Prospective Purchasers will disclose in the United States
information regarding such purchases to the extent such information is made public in Switzerland
pursuant to the Swiss tender offer rules. With respect to the condition (i) that “[n]o purchases or
arrangements to purchase otherwise than pursuant to the tender offer are made in the United States,”
the SEC noted in the 2008 Cross-Border Amendments Release “that, notwithstanding this condition,
(footnote continued...)
U.S. Securities and Exchange Commission
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We note that Rule 14e-5(b)(12) requires purchases of, or arrangements to
purchase, UBS Securities outside the Exchange Offer by the Prospective Purchasers to be
“permissible under” and conducted “in accordance with the applicable laws” of
Switzerland. Under Swiss law, the Prospective Purchasers will be permitted to purchase
White Shares and related securities in the open market or otherwise outside the Exchange
Offer without restriction at any time until the publication of the Swiss Exchange Offer
(by way of (i) the publication of a “pre-announcement” to the Swiss offer prospectus or
(ii) the publication of the Swiss offer prospectus, if it is published without any pre
announcement), which may take place between approximately two to eight weeks prior to
commencement. From the publication until completion of the Swiss Exchange Offer,
UBS will be subject to a matching rule (which requires that no cash consideration be paid
for purchases of subject securities outside the offer or, upon cash purchases, that the
tender offer consideration be modified to include cash) and a best price rule (which
requires that any higher consideration offered to any holder of subject securities be
offered to all holders of such securities). The best price rule continues to apply for six
months after completion of the offer.
In the present instance, by order dated June 30, 2014 (the “Order”), the
TOB has granted an exemption from the matching and best price rules described above to
allow it to continue to engage in the Market Activities during the entire restricted period
law. Inasmuch as the TOB has granted an exemption to continue to conduct
under Swiss 5
the Market Activities throughout the Exchange Offer, we believe that these Market
(...footnote continued)
in certain circumstances covered persons may engage in such purchases or arrangements to purchase
if relying on other existing exceptions from this condition or through attaining no-action relief or
exemptive order from the SEC.”
The Order is premised upon the facts that, among other things, the transaction is a holding company
reorganization conducted on a one-for-one basis and the UBS Shares are “liquid”. The condition to
the relief is that any cash purchases outside the offer occur at prevailing market prices, which, for this
purpose, mean the market prices on SIX at the time of the transactions in question. The relief covers
trades on exchange (or trading venues similar to exchanges such as multi-lateral trading facilities) and
transactions on the traditional OTC markets. Pursuant to the SESTA, UBS will have to notify on a
daily basis the TOB of any transactions it has carried out involving UBS Securities from the date of
the publication of the offer until the end of the subsequent offer period. These notifications must set
forth the subject matter of the transactions, the nature of the transactions, applicable prices, trade
times, whether the transactions have been executed on- or off-exchange, the identity of the broker
dealers involved in the transactions and the form and number of all UBS Securities and related voting
rights held by UBS as of the end of each relevant trading day. The TOB typically publishes the
reported transactions on its website shortly upon receipt.
U.S. Securities and Exchange Commission
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Activities, when conducted in accordance with such exemption, will not conflict with
Swiss law and should therefore be deemed to be “permissible under” and conducted “in
accordance with the applicable laws.” From a procedural point of view, Swiss takeover
rules require that these Market Activities be reviewed and analyzed by an independent
auditor or “review body” (which is referred to as the “independent auditor” in the rest of
letter). UBS believes that this review process will serve as an additional reliable
this 6
safeguard against “fraudulent, deceptive or manipulative acts” that are the concerns of
Rule 14e-5.
Further, we note that Rule 1 4e-5(b)(1 2)(i)(F) requires that the “tender
offer price will be increased to match any consideration paid outside of the tender offer
that is greater than the tender offer price.” In the present instance, purchases or
arrangements to purchase made pursuant to the Market Activities at then prevailing
market prices should not be deemed to involve greater consideration than the UBS Group
Shares. This is because UBS Group Shares will be offered to UBS shareholders for
exchange on a one-for-one basis. UBS Group is a newly formed entity with no activities
and only nominal assets and its shares are currently entirely owned by UBS and have no
trading market. As a result, after the Exchange Offer, UBS Group Shares will represent a
proportional interest in the Group and the economic equivalent of UBS Shares. As such,
purchases or arrangements to purchase made pursuant to the Market Activities will not
involve, as of their respective dates, greater value than the UBS Group Shares. We also
note that the UBS Shares are highly liquid (during 2013, the worldwide average daily
trading volume of UBS Shares was approximately CHF 319 million or US$ 358 million
in value; see Section II.A above). Existing shareholders therefore will have the ability to
sell their UBS Shares at prevailing market prices at any time if they wish to liquidate
6
Under Swiss regulation, the independent auditor is appointed by the offeror and such appointment
must be approved by the TOB (the TOB assesses the independence of the auditor).
“
The independent auditor assumes important functions under Swiss takeover rules. Its main
responsibility is to confirm to the TOB that the offer complies with Swiss takeover rules (subject to
any exemption granted by the TOB). Prior to the publication of the offer, the independent auditor
verifies whether the offer prospectus complies with Swiss regulation. It then verifies compliance with
Swiss law and regulation and the decisions of the TOB throughout the offer period. The auditor must
submit a final report to the TOB specifying the principles on which it has based its examination. The
standard of review is set forth in a TOB circular by reference to the Swiss auditing standard for the
review of public takeover offers. Pursuant to that standard, the Swiss matching and best price rules
are key areas subject to review by the independent auditor. Inquiries of the auditors consist of
questions to the offeror and review of internal instructions, exhaustive transactions list, notifications
of transactions and representation letters.
-
U.S. Securities and Exchange Commission
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their investments rather than rolling them into UBS Group Shares. Consequently, there
will be no disparate treatment of existing shareholders.
For similar reasons and as indicated above, the TOB has granted an
exemption from Swiss takeover rules so that UBS Securities can be purchased for cash
consideration in the ordinary course outside the Swiss Exchange Offer, provided that
UBS Securities are purchased at then current market prices.
We note that, absent an exemption for such activities, Rule 14e-5 would
significantly restrict the ability of the Group to conduct its activities in a manner that is in
the best interests of its investor clients. The discussion of harmful consequences to
clients set out below with respect to U.S. market activities (see Section III.C) applies
equally to clients of the Group outside the United States. In addition, many of the policy
arguments set forth below as to why exemptive relief for the U.S. Market Activities
would not present the policy concerns which Rule 14e-5 is designed to address apply
with equal force to Market Activities conducted outside the United States. We also note
that the exemption from Rule 14e-5 provided by Section (b)(12) thereof would be
available by its terms to cover Market Activities outside the United States but for U.S.
Market Activities conducted in accordance with the exemptive relief sought by this letter.
C.
US. Market Activities
1.
Relief Requested
We respectfully request that the Staff grant exemptive relief from Rule
14e-5 pursuant to Rule 14e-5(d) to permit UBS Securities LLC, UBS Wealth
Management and UBS Global Asset Management to continue their limited U.S. Market
Activities in the ordinary course of business during the 1 4e-5 Restricted Period.
2.
Discussion
Paragraph (d) of Rule 1 4e-5 states that the SEC may grant an exemption
from the provisions of Rule 14e-5, either unconditionally or on specified terms and
conditions, to any transaction.
In the present instance, the U.S. Market Activities are conducted by
(i) UBS Securities LLC, an SEC registered broker-dealer (ii) UBS Wealth Management
and (iii) UBS Global Asset Management in the ordinary course of their respective
business. Specifically, UBS Securities LLC executes unsolicited buy and sell orders
received from its customers. UBS Wealth Management buys and sells UBS Securities
from time to time in the context of its investment activities, while UBS Global Asset
Management invests in UBS Securities from to time to execute quantitative and passive
H
U.S. Securities and Exchange Commission
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strategies. All buy and sell orders of UBS Wealth Management and a substantial portion
of those of UBS Global Asset Management are routed through UBS Securities LLC, and
executed by separately identifiable departments of UBS Securities LLC.
UBS Securities LLC is a covered person under Rule 14e-5 under the
Exchange Act both because (a) it is an affiliate of UBS and (b) it may act as the dealermanager for the Exchange Offer. UBS Wealth Management and UBS Global Asset
Management are subsidiaries or departments of UBS and thus covered persons as well.
Rule 14e-5 therefore would prevent UBS Securities LLC, UBS Wealth Management and
UBS Global Asset Management from conducting their limited U.S. Market Activities
during the 14e-5 Restricted Period. Given the potential significant length of time
between a “public announcement” and the completion of the Exchange Offer and the
uncertain timing of the Exchange Offer, the impact of Rule 14e-5 on the U.S. Market
Activities will, without the limited exemptive relief sought hereby, be significant. The
U.S. Market Activities, if exempted as requested herein, would at all times be conducted
in the ordinary course of business and not in furtherance of or to facilitate the Exchange
Offer.
In addition to damage to UBS’s business and the impact on market
liquidity for UBS Securities, absent an exemption for the U.S. Market Activities, Rule
14e-5 will significantly restrict the ability of UBS Securities LLC, UBS Wealth
Management and UBS Global Asset Management to conduct their activities in a manner
that is in the best interests of their investor clients located in the United States. The
following summarizes the potential harm to U.S. clients of UBS Securities LLC, UBS
Wealth Management and UBS Global Asset Management absent an exemption from Rule
14e-5.
1.
With respect to unsolicited brokerage transactions by UBS Securities LLC
for client accounts, a U.S. client of UBS lB will have to either forgo the
transaction(s) in UBS Securities or else incur the costs of employing an
alternative broker for a service which it would rightfully expect from UBS
Securities LLC.
2.
With respect to trading in UBS Securities by UBS Wealth Management,
U.S. clients of UBS Wealth Management will be in a similar position to
clients of UBS Securities LLC except that the potential harm will be
greater for them. This is because, unlike UBS Securities LLC clients,
clients of UBS Wealth Management typically do not have multiple wealth
managers and thus they may not have access to an alternative account
through which to purchase UBS Securities.
U.S. Securities and Exchange Commission
3.
-23-
With respect to UBS Global Asset Management, absence of the requested
exemption will restrict UBS Global Asset Management’s ability to
purchase UBS Securities in pursuit of quantitative and passive strategies,
reducing its ability to track relevant indexes precisely for the benefit of its
U.S. customers.
We note that the U.S. Market Activities are limited to unsolicited agency
transactions on behalf of UBS’s customers or purchases for the account of customers
pursuant to contractual investment authority delegated by the customer to UBS Wealth
Management or UBS Global Asset Management. In addition, UBS Wealth Management
and UBS Global Asset Management have both fiduciary or similar duties under
applicable laws to conduct their respective investment activities in the best interests of
their respective clients and are prohibited from trading in the UBS Securities unless doing
so complies with the terms and conditions that govern their relationships with their
respective clients.
UBS maintains Information Barriers. As a result, each of the subsidiaries
and departments of UBS Securities LLC, UBS Wealth Management and UBS Global
Asset Management that conducts the U.S. Market Activities has no officers (or persons
performing similar functions) or employees (other than clerical, ministerial or support
personnel) who (a) direct, effect or recommend transactions in the UBS Securities and (b)
are also involved in making strategic decisions concerning the Exchange Offer on behalf
of UBS or providing UBS with dealer-manager services. We note that if UBS Securities
LLC itself was not an affiliate of the offeror, the Affiliates and Departments of UBS
Securities LLC conducting the U.S. Market Activities on its behalf would qualify for the
8
exemption provided by Rule 14e-5(b)(8).
We believe that the U.S. Market Activities and the transaction, which is a
corporate reorganization to be accomplished via share-for-share exchange offer, do not
implicate the equal treatment and anti-fraud policy concerns that underlie Rule 1 4e-5 and
Rule 14e-5(b)(8) provides an exemption for purchases or arrangements to purchase by an “affiliate of
the dealer-manager” if(l) the dealer-manager maintains and enforces written policies and procedures
reasonably designed to prevent the flow of information to or from the affiliate that might result in a
violation of the U.S. federal securities laws and regulations, (2) the dealer-manager is registered as a
broker or dealer under Section 15(a) of the Exchange Act, (3) the affiliate has no officers (or persons
performing similar functions) or employees (other than clerical, ministerial or support personnel) in
common with the dealer-manager that direct, effect or recommend transactions in the securities, and
(4) the purchases or arrangements to purchase are not made to facilitate the tender offer.
-24-
U.S. Securities and Exchange Commission
that the factors presented by the transaction support the granting of an exemption under
Rule 14e-5(d).
The SEC has indicated that in reviewing requests for exemptive relief
it “will consider factors such as proportional ownership of U.S. security
1
4e-5,
Rule
from
holders of the subject security in relation to the total number of shares outstanding and to
the public float; whether the offer will be for “any-and-all” shares or will involve
prorationing; whether the offered consideration will be cash or securities; whether the
offer will be subject to a foreign jurisdiction’s laws, rules, or principles governing the
conduct of tender offers that provide protections comparable to Rule 14e-5; and whether
9 We
the principal trading market for the subject security is outside the United States.”
transaction
contemplated
the
presented
by
factors
following
the
in
particular,
believe that,
not
will
support the granting of the requested exemptive relief: (1) the Exchange Offer
involve prorationing; (2) the offered consideration will be securities on a share-for-share
basis and (3) the principal trading market for the UBS Securities is outside the United
States.
The October 1999 Cross-Border Adoptive Release also states that “[Rule
1 4e—5] protects investors by prohibiting an offeror from extending greater or different
consideration to some security holders by offering to purchase their shares outside the
offer, while other security holders are limited to the offer’s terms. The rule prohibits the
disparate treatment of security holders, prohibits the avoidance of proration requirements,
and guards against the dangers posed by a bidder’s purchases outside an offer that may
involve fraud, deception and manipulation.”° None of these concerns will be present if
the requested relief is granted.
The policy concerns underlying Rule 14e-5, together with the reasons why
we believe those concerns are not present in respect of the U.S. Market Activities, are
discussed below:
1.
“[A]n offeror... extending greater or dVferent consideration to some
security holders by offering to purchase their shares outside the offer,
while other security holders are limited to the offer ‘s terms” and “the
disparate treatment ofsecurity holders
“.
Section 5.C. I of the Cross-Border Tender and Exchange Offers, Business Combination and Rights
Offerings, dated October 22, 1999 (the “1999 Cross-Border Adoptive Release”).
‘°
Ibid.
U.S. Securities and Exchange Commission
-25-
Unsolicited brokerage transactions by UBS Securities LLC: There
a)
offers
by UBS to purchase UBS Securities on its own behalf as
no
would be
only unsolicited brokerage transactions would be conducted. Therefore, there
would be no risk of UBS extending offers to purchase on its own behalf for
different consideration to some security holders outside the Exchange Offer.
Trading in UBS Securities by UBS Wealth Management: Any U.S.
b)
Market Activities by UBS Wealth Management to purchase UBS Securities
would be on behalf of customers, pursuant to discretionary and nondiscretionary mandates. Such purchases are governed by UBS’s fiduciary
duties to its customers, which protect against the risk that purchases on behalf of
Wealth Management customers could be used as a means to extend differential
consideration to different classes of shareholders.
Trading in UBS Securities by UBS Global Asset Management:
c)
Purchases of UBS Securities for clients in the United States would be
exclusively pursuant to quantitative and passive strategies. The risk of disparate
treatment to security holders would not be present for these strategies because
individual purchases pursuant to these strategies are driven by the need to track
the relevant indices.
As noted above, the U.S. Market Activities will be conducted solely in the
ordinary course of the respective business of UBS Securities LLC, UBS Wealth
Management and UBS Global Asset Management and not in furtherance of or to
facilitate the Exchange Offer.
2.
“The avoidance ofproration requirements.”
The Exchange Offer will be an “any or all” offer for all issued UBS shares.
There will be no proration requirement, so this concern is inapplicable.
3.
“The dangers posed by a bidder ‘spurchases outside an offer that may
involve fraud, deception and manipulation.”
The Exchange Offer will not involve a change of control. Instead,
shareholders in the Group will effectively be asked to consent, by
participation in the Exchange Offer, to the implementation of a corporate
reorganization consisting of the formation of a new group holding
company (UBS Group). There will be no control premium; consideration
consists solely of UBS Group Shares offered on a one-for-one basis, and
the interests of the offeror and existing UBS shareholders are completely
aligned. Consequently, there is no incentive for UBS to attempt to
-26
U.S. Securities and Exchange Commission
implement manipulative share purchase strategies or to deceive
shareholders in respect of their decisions to tender their UBS Securities.
In addition, as a financial institution, UBS has a well-established and
transparent course of dealing in UBS Securities, and as a requirement to
relief, UBS agrees that any market activities would be carried on solely in
the ordinary course of business, consistent with this past practice. Given
UBS ‘s prominent presence in the market for UBS Securities, any deviation
from past practice would be easily noticed.
The absence of the applicability of a policy concern for UBS’s ordinary
course U.S. Market Activities in the context of the contemplated transaction may be
further illustrated by noting that, if the transaction were being conducted by a U.S.
domestic corporation, it likely would not be conducted as an exchange offer at all, but
rather by means of merger. In such a case, the U.S. domestic financial institution would
be permitted to continue without restriction the U.S. market activities for which we are
requesting relief, as Rule 14e-5 would not apply. Rule l4e-5’s prohibitions apply to this
transaction not because of its nature or objective which essentially consists in the
insertion of a new holding company on top of the Group but simply because Swiss
corporate law does not offer the same legal structure merger by majority vote as U.S.
domestic state law would to effect the desired corporate reorganization.
—
—
—
—
We therefore respectfully request that the Staff grant exemptive relief
from Rule 14e-5 pursuant to Rule 14e-5(d) to permit UBS Securities LLC, UBS Wealth
Management and UBS Global Asset Management to continue their limited U.S. Market
Activities outside of the Exchange Offer in the United States during the 1 4e-5 Restricted
Period.
D.
Dual Offer Structure
1.
Relief Requested
We respectfully request that the Staff grant exemptive relief from Rule
14e-5 pursuant to Rule 14e-5(d) under the Exchange Act to permit the contemplated dual
structure of the Exchange Offer.
2.
Discussion
Read literally, Rule 1 4e-5 could be interpreted to prohibit purchases or
arrangements to purchase securities pursuant to the Swiss Exchange Offer during the
period in which the U.S. Exchange Offer is open. However, Rule 14e-5(b)(l 1) under the
Exchange Act permits purchases or arrangements to purchase pursuant to a foreign offer
where the offeror seeks to acquire subject securities through a U.S. tender offer and a
U.S. Securities and Exchange Commission
-27
concurrent or substantially concurrent foreign offer, if certain conditions are satisfied. In
the present case, all conditions under Rule 1 4e-5(b)( 11) would be met, with the exception
that the exemptive relief sought by this letter may, on one interpretation of Rule 1 4e
5(b)(l 1), cause the condition that all purchases by the offeror in the foreign tender
offer(s) are made solely pursuant to the foreign tender offer(s) and not pursuant to open
market transactions, private transactions, or other transactions to be incapable of
satisfaction. This is because the Market Activities involve purchases or arrangements to
purchase made otherwise than pursuant to the Swiss Exchange Offer. As discussed
above, Rule 14e-5 is designed to prevent manipulative and deceptive practices whereby
an offeror purchases (or arranges to purchase) shares outside of a tender offer, either
during the offer or promptly following it. In the present case, however, the proposed dual
offer structure involves purchases pursuant to the Swiss Exchange Offer, which is subject
to Swiss tender offer rules and regulated by the SESTA and implementing regulations
adopted by the TOB. Accordingly, the concerns which Rule 14e-5 seeks to address are
not relevant in the context of the Swiss Exchange Offer and UBS respectfully requests
exemptive relief from the provisions of Rule 14e-5 in order to allow UBS Group to effect
a dual tender offer as described herein.
E.
Conditions
As conditions to the relief being requested herein:
Upon request of the Division of Corporation Finance (the
a)
“Division”), the Prospective Purchasers referred to in Section III.C will disclose
to the Division a daily time-sequenced schedule of all purchases of shares made
from the time of public announcement of the Exchange Offer until its expiration,
on a transaction-by-transaction basis, including (i) description of the size, broker
(if any), time of execution and purchase price; and (ii) the exchange, quotation
system or other facility through which the purchase occurred (this information
will not include any client specific data the disclosure of which is restricted under
applicable law);
Upon request of the Division, such Prospective Purchasers will
b)
transmit the information specified in clauses (i) and (ii) of paragraph a) above to
the Division at its offices in Washington D.C. within 30 days of the request;
Such Prospective Purchasers will maintain all documents and other
c)
information required to be maintained pursuant to this exemption for a period of
not less than two years from expiration of the Exchange Offer;
U.S. Securities and Exchange Commission
-28
Representatives of such Prospective Purchasers will be made
d)
available (in person at the offices of the Division or by telephone) to respond to
inquiries relating to such records;
All purchases or arrangements to purchase UBS Securities by the
e)
Prospective Purchasers will be permissible under and will be conducted in
accordance with the applicable laws of Switzerland or applicable relief that is or
may be issued by the TOB;
f)
UBS hereby represents that, with respect to purchases of or
arrangements to purchase UBS Securities conducted outside the United States
otherwise than pursuant to the Swiss Exchange Offer or any Foreign Offer:
i.
UBS is a foreign private issuer as defined in Rule 3b-4(c)
under the Exchange Act;
ii.
UBS reasonably expects that the Exchange Offer will meet
the conditions for reliance on the Tier II cross-border
exemptions set forth in Rule 14d-1(d) under the Exchange
Act;
iii.
In respect of all purchases of or arrangements to purchase
UBS Securities, other than pursuant to the Exchange Offer,
prominent disclosure of the possibility of such purchases by
the Prospective Purchasers will be included in the U.S.
offering materials and prominent disclosure of the manner
in which information regarding such purchases will be
disseminated will be included in the U.S. offering
materials;
iv.
In respect of all purchases of or arrangements to purchase
UBS Securities, other than pursuant to the Exchange Offer,
the Prospective Purchasers will disclose in the United
States information regarding such purchases to the extent
such information is made public in Switzerland pursuant to
the Swiss tender offer rules or, if applicable, any TOB
order relating to these rules;
v.
In respect of all purchases of or arrangements to purchase
UBS Securities, other than pursuant to the Exchange Offer,
the Prospective Purchasers will comply at all times with the
U.S. Securities and Exchange Commission
-29
Swiss matching and best price requirements, the Order or
any other applicable relief granted by the TOB; and
vi.
vii.
While UBS does not expect that a financial advisor will be
appointed to act in connection with the Exchange Offer, if a
financial advisor is appointed by it, purchases or
arrangements to purchase by an affiliate of such financial
advisor will satisfy the following additional conditions:
1.
The financial advisor and the affiliate will maintain
and enforce written policies and procedures
reasonably designed to prevent the transfer of
information among the financial advisor and
affiliate that might result in a violation of U.S.
federal securities laws and regulations through the
establishment of information barriers;
2.
The financial advisor will have an affiliate that is
registered as a broker or dealer under section 15(a)
of the Exchange Act; and
3.
The affiliate will have no officers (or persons
performing similar functions) or employees (other
than clerical, ministerial, or support personnel) in
common with the financial advisor that direct,
effect, or recommend transactions in the UBS
Shares or related securities who also will be
involved in providing the offeror or UBS Group
with financial advisory services or dealer-manager
services;
The purchases or arrangements to purchase will not be
made in furtherance of or to facilitate the Exchange Offer;
and
UBS hereby represents, with respect to purchases of or
g)
arrangements to purchase UBS Securities pursuant to the Swiss Exchange Offer:
UBS reasonably expects that the Exchange Offer will meet
the conditions for reliance on the Tier II cross-border
exemptions set forth in Rule 1 4d- 1(d) under the Exchange
Act;
-30-
U.S. Securities and Exchange Commission
ii.
The economic terms and consideration in the U.S.
Exchange Offer and the Swiss Exchange Offer will be the
same;
iii.
The procedural terms of the U.S. Exchange offer will be at
least as favourable as the terms of the Swiss Exchange
Offer; and
iv.
The intention of UBS Group to make purchases pursuant to
the Swiss Exchange Offer will be disclosed in the U.S.
Offering Documents;
Except as otherwise exempted herein, the Prospective Purchasers
h)
will comply with Rule 14e-5.
****
If you have any questions or require any additional information, please
contact the undersigned at 011(44) 20 7959 8575 or Christoph Vonlanthen at 001 (44) 20
7959 8478.
Sincerely yours,
David B. Rockell
cc:
David Kelly
Daniel Morales
(UBS AG)
Roif Watter
Dieter Dubs
Katja Roth Pellanda
(Bar & Karrer AG)
Michael Wiseman
Rebecca J. Simmons
Christoph Vonlanthen
(Sullivan & Cromwell LLP)
Prof. Dr. Rolf Watter
Rechtsanwalt, LL.M.
+41 58 261 50 00
rolf.watter@baerkarrer.ch
BÄR
& KARRER
Office of Mergers and Acquisitions
Division of Corporation Finance
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20549
United States of America
For the attention of:
Michele Anderson, Chief, Office of Mergers and Acquisitions
Christina Chalk, Senior Special Counsel, Office of Mergers and Acquisitions
Zurich, 22 July 2014
396554/112/nbe/bt23773301.doc
UBS AG — Request for Exemptive Relief:
in Connection with Proposed Reorganization
Dear Ms. Anderson and Ms. Chalk
We are acting as Swiss counsel to UBS AG, a corporation (Aktiengese//schaft/société anonyme) organized under the laws of Switzerland ("UBS" and,
together with its subsidiaries, the "GrOUp"), and its wholly owned subsidiary UBS
Group AG("UBS Group"), in connection with the proposed reorganization through
a share-for-share exchange offer (the "Exchange Offer") as described in the Registration Statement on Form F-4 submitted to the U.S. Securities and Exchange
Commission (the "Commission") on June 17, 2014.
In such capacity, we have reviewed the letter, dated July 22, 2014, prepared by
Sullivan &Cromwell LLP on behalf of UBS and UBS Group requesting certain exemptive relief in connection with the continuance of ordinary course market activities and the making of two separate offers under U.S. and Swiss law (the "Letter"). We believe that the descriptions of Swiss law and regulations (including the
order of the Swiss Takeover Board dated June 30, 2014) in the Letter are fair,
complete and accurate as regards the conduct of such market activities and the
aspects of the transaction described in the Letter for which relief has been requested therein.
Bär &Karrer
Rechtsanwälte
Zürich
8är &Karrer AG
Brandscheu kes[rasse 90
Genf
8är &Karrer SA
CH-8027 Zürich
Phone: +41 58 261 50 00
12, quai de la Poste
CH-1211 Genève 11
Phone: +41 58 261 57 00
+41 58 261 50 01
Fax:
zuerich @baerkarre r.di
+41 58 261 57 01
Fax:
geneve@baerkarrer.ch
Lugano
Bär &Karrer SA
Zug
Bär &Karrer AG
Via Vegezzi 6
CH-6901 Lugano
Phone: +41 58 261 58 00
Fax:
+41 58 261 58 O1
Baarerstrasse 8
CH-6301 Zug
Phone: +41 58 261 59 00
+41 58 261 59 01
Fax:
lugano@baerkarrer.ch
zug@baerkarrer.ch
www.baerkarrer.th
Bär &Karrer
22 July 2014
The foregoing confirmation is limited to matters involving the laws of Switzerland
and is not to be read as extending by implication to any other matters not referred to herein.
This letter is provided solely for the benefit of the addressee in connection with
the transaction contemplated in the Letter and may not be used or relied upon by
any other person or for any other purpose.
Sincerely yours,
}
'
~V
t ~~,,~,~ N
Prof. Dr. Rolf Watter
2
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.