The US Securities and Exchange Commission (SEC) has informed UBS Group that it will not take enforcement action if the bank converts certain debt securities into equity without registering the offering with the US regulator. This move removes a potential legal obstacle to the bank’s crisis-resolution plans.
Details of the Plan
The guidance relates to a potential ‘bail-in’ of the bank, a crisis-management tool designed to recapitalize a failing lender by converting designated debt securities into equity rather than relying on taxpayer support. The SEC said a debt-to-equity exchange ordered by Switzerland’s financial regulator would constitute an ‘offer’ and ‘sale’ of securities under US law, but could qualify for an exemption from Securities Act registration requirements.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
