UBS Settles Charges Related to Investments in Complex Exchange-Traded Product

The Securities and Exchange Commission today filed a settled action against UBS Financial Services Inc. for compliance failures relating to sales of a volatility linked exchange-traded product (ETP). This is the sixth matter arising from the Enforcement Division’s ETP Initiative. As described in the SEC’s order, the ETP at issue is designed to track short-term volatility expectations in the market as measured against derivatives of a volatility index. According to the order, the issuer of the product warned UBS that it was not appropriate to hold the product for extended periods, and the product’s offering documents made clear that the product was more likely to decline in value when held over a longer period.