Credit Suisse Services AG, et al.; Notice of Application and Temporary Order, 19744-19748 [2025-08125]
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Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the Exchange consents, the Commission
will:
A. by order approve or disapprove
such proposed rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBZX–2025–059 on the subject line.
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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeBZX–2025–059. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
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provisions of 5 U.S.C. 552, will be
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business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–08120 Filed 5–8–25; 8:45 am]
IV. Solicitation of Comments
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
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[Release No. 35566; File No. 812–15779]
Credit Suisse Services AG, et al.;
Notice of Application and Temporary
Order
May 5, 2025.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Temporary order and notice of
application for a permanent order under
section 9(c) of the Investment Company
Act of 1940 (‘‘Act’’).
AGENCY:
Summary of Application: Applicants
(defined below) have applied for a
temporary order (‘‘Temporary Order’’)
exempting them from section 9(a) of the
Act with respect to a guilty plea entered
by Credit Suisse Services AG (the
‘‘Pleading Entity’’ or ‘‘CSSAG’’) in
connection with a plea agreement (the
‘‘2025 Plea Agreement’’) between the
Pleading Entity and the United States
Department of Justice (‘‘DOJ’’), until the
Commission takes final action on an
application for a permanent order (the
‘‘Permanent Order,’’ and with the
Temporary Order, the ‘‘Orders’’).
Applicants also have applied for a
permanent order.
Applicants: CSSAG, UBS Asset
Management (Americas) LLC
(‘‘UBSAM’’), UBS Asset Management
(US) Inc. (‘‘UBSAM (US)’’), UBS Asset
Managers of Puerto Rico (‘‘UBSAM
(PR)’’), and UBS Financial Services Inc.
(‘‘UBSFS’’) (each, an ‘‘Applicant’’ and,
collectively, the ‘‘Applicants’’), and
UBS AG (‘‘UBS AG’’).1
20 17
CFR 200.30–3(a)(12).
1 UBS AG is a party to the application solely for
purposes of making the representations and
agreeing to the conditions in the application that
apply to it.
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Filing Date: The application was filed
and amended on May 5, 2025.
Hearing or Notification of Hearing:
The Temporary Order will be effective
until such time as the Commission takes
final action on the application by
issuing an order granting the requested
relief, unless the Commission orders a
hearing. Interested persons may request
a hearing by emailing the Commission’s
Secretary at Secretarys-Office@sec.gov
and serving the Applicants with a copy
of the request by email, if an email
address is listed for the relevant
Applicant below, or personally or by
mail, if a physical address is listed for
the relevant Applicant below. Hearing
requests should be received by the
Commission by 5:30 p.m. on May 30,
2025, and should be accompanied by
proof of service on the Applicants, in
the form of an affidavit, or, for lawyers,
a certificate of service. Pursuant to rule
0–5 under the Act, hearing requests
should state the nature of the writer’s
interest, any facts bearing upon the
desirability of a hearing on the matter,
the reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by emailing the
Commission’s Secretary.
The Commission:
Secretarys-Office@sec.gov. Applicants:
Patrick Shilling, UBS AG, 11 Madison
Avenue, New York, New York 10010;
Norm Champ, P.C. and Mark Filip, P.C.,
Kirkland & Ellis LLP, 601 Lexington
Avenue, New York, New York 10022.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Christopher D. Carlson, Senior Counsel,
or Daniele Marchesani, Assistant Chief
Counsel, at (202) 551–6825 (Division of
Investment Management, Chief
Counsel’s Office).
The
following is a temporary order and a
summary of the application. The
complete application may be obtained
via the Commission’s website by
searching for the file number at the top
of this document, or for an Applicant
using the Company name search field,
on the SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Office of Investor
Education and Advocacy at (202) 551–
8090.
SUPPLEMENTARY INFORMATION:
Applicants’ Representations
1. CSSAG, a company organized
under the laws of Switzerland, provided
banking, administrative, legal and
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compliance services to Credit Suisse AG
(the ‘‘CS Bank’’).2
2. UBSAM, a limited liability
company operating under Delaware law,
is registered as an investment adviser
under the Investment Advisers Act of
1940 (the ‘‘Advisers Act’’). UBSAM
serves as investment adviser (either as
primary investment adviser or as
investment sub-adviser) to each Fund 3
listed in Part 1 of Appendix A to the
application.
3. UBSAM (US), a corporation formed
under Delaware law, is registered as a
broker-dealer under the Securities
Exchange Act of 1934 (the ‘‘Exchange
Act’’). UBSAM (US) serves as principal
underwriter and distributor to each
open-end RIC (‘‘Open-End Fund’’) listed
in Part 2 of Appendix A to the
application.
4. UBSAM (PR), a division of UBS
Trust Company of Puerto Rico, a trust
company formed under the Puerto Rico
Trust Company Act, is registered as an
investment adviser under the Advisers
Act. UBSAM (PR) serves as investment
adviser to each Fund listed in Part 3 of
Appendix A to the application.
5. UBSFS is a corporation organized
under the laws of Delaware. UBSFS is
registered with the Commission as a
broker-dealer under the Exchange Act
and is registered as an investment
adviser under the Advisers Act. UBSFS
serves as principal underwriter to each
Fund listed in Part 4 of Appendix A to
the application.
6. Each of the above Applicants is an
indirect wholly-owned subsidiary of
UBS AG (UBS AG, together with its
wholly-owned subsidiaries and
affiliated entities, ‘‘UBS’’). UBS AG, a
company incorporated under the laws of
Switzerland, is a Swiss-based global
financial services firm with offices in
more than 50 countries. UBS AG, its
affiliates, and subsidiaries engage in a
full range of financial services activities
in Switzerland and globally, including
personal banking, commercial banking,
investment banking, global wealth
management, and asset management.4
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2 The
Pleading Entity is an applicant, but does not
and will not serve as investment adviser, depositor
or principal underwriter to any registered
investment company and is not a Covered Person
(as defined below).
3 The term ‘‘Fund’’ or ‘‘Funds,’’ as used in the
application, refers to any U.S. registered investment
company (‘‘RIC’’), employees’ securities company
(‘‘ESC’’), and any investment company that has
elected to be treated as a business development
company under the Act (‘‘BDC’’) for which an
Applicant currently provides, or may in the future
provide, Fund Servicing Activities (defined below),
or a Covered Person (defined below), subject to the
terms and conditions of the Orders.
4 UBS Group AG (‘‘UBS Group’’), the ultimate
parent of the Pleading Entity, does not and will not
serve as investment adviser, depositor or principal
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7. Currently, UBSAM, UBSAM (US),
UBSAM (PR) and UBSFS (together, the
‘‘Fund Servicing Applicants’’),
collectively serve as investment adviser
or investment sub-adviser to RICs and
ESCs and as principal underwriter to
Open-End Funds (such activities,
collectively, ‘‘Fund Servicing
Activities’’).5 The Pleading Entity is an
‘‘affiliated person’’ within the meaning
of section 2(a)(3) of the Act (‘‘Affiliated
Person’’) of each of the Fund Servicing
Applicants.6
8. While no existing company of
which the Pleading Entity is an
Affiliated Person (other than the
Applicants) currently serves as an
investment adviser or depositor of any
RIC, ESC or BDC, or as principal
underwriter for any Open-End Fund,
unit investment trust (‘‘UIT’’), or
registered face-amount certificate
company (‘‘FACC’’), the Applicants
request that any relief granted by the
Commission pursuant to the application
also apply to any existing company
(with the exception of UBS AG and the
2014 CS Applicants (as defined below))
of which the Pleading Entity is an
Affiliated Person and to any other
company of which the Pleading Entity
may become an Affiliated Person in the
future (together with the Applicants
other than the Pleading Entity, the
‘‘Covered Persons’’) with respect to any
activity contemplated by section 9(a) of
the Act.7
9. The 2025 Plea Agreement relates to
a one-count criminal information that
DOJ filed on May 19, 2014 in the
District Court for the Eastern District of
Virginia (the ‘‘Information’’) charging
CS Bank with conspiracy to commit tax
fraud related to accounts CS Bank
established for U.S. cross-border clients
in violation of Title 18, United States
Code, Section 371. CS Bank waived
indictment and pleaded guilty to the
charge set out in the Information (the
‘‘2014 Plea’’) through a plea agreement
dated May 19, 2014 (the ‘‘2014 Plea
Agreement’’).
underwriter to any registered investment company
and is not a Covered Person.
5 The term ‘‘Fund Servicing Activities,’’ as it
relates to Covered Persons (defined below), refers to
each of the capacities identified in Section 9(a) of
the Act in which a Covered Person currently serves
or may serve in the future.
6 Section 2(a)(3) of the Act defines ‘‘affiliated
person’’ to include, among others, any person
directly or indirectly controlling, controlled by, or
under common control with, the other person.
7 Applicants represent that no legacy Credit
Suisse entities have provided Fund Servicing
Activities since May 1, 2024 and no legacy Credit
Suisse entity would rely on the Orders as all the
legacy Credit Suisse entities that have engaged in
Fund Servicing Activities have transferred their
Fund Servicing Activities to the Fund Servicing
Applicants.
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10. According to the Statement of
Facts that served as the basis for the
2014 Plea Agreement (the ‘‘2014
Statement of Facts’’), CS Bank operated
a cross-border banking business that
knowingly and willfully aided U.S.
clients in opening and maintaining
undeclared accounts and concealing
their offshore assets and income from
the Internal Revenue Service (the
‘‘IRS’’), assisted U.S. clients in filing
false tax returns with the IRS, and failed
to develop and implement an effective
system of compliance controls to
prevent and detect policy violations
regarding the proper handling of
accounts for U.S. clients, among other
admissions.
11. Under the terms of the 2014 Plea
Agreement, CS Bank agreed to
undertake, among other actions: (i) to
close the accounts of recalcitrant
account holders (as defined in Section
1471(d)(6) of the Internal Revenue
Code); (ii) implement procedures to
prevent its employees from assisting
recalcitrant account holders to engage in
further concealment in connection with
closing any account or transferring any
funds; (iii) not open any U.S. Related
Accounts (as defined in paragraph I.B.9
of the Program for Non-Prosecution
Agreements or Non-Target Letters for
Swiss Banks (the ‘‘Program’’)) except on
conditions that ensure the account will
be declared to the United States and
will be subject to disclosure by the CS
Bank; and (iv) promptly disclose all
evidence and information described in
Sections II.D.I and II.D.2 of the
Program.8
12. In May 2025, as part of a global
settlement, CSSAG entered into the
2025 Plea Agreement whereby CSSAG
agreed to waive indictment and plead
guilty to a single-count criminal
information charging CSSAG with
conspiracy to commit tax evasion in
violation of Title 18, United States
Code, Section 371 (the ‘‘2025 Plea’’).
8 The Program is included as an attachment to the
Joint Statement between the U.S. Department of
Justice and the Swiss Federal Department of
Finance (Aug. 29, 2013), available at https://
www.justice.gov/tax/file/631356/dl. On May 19,
2014 and June 16, 2014, Credit Suisse Asset
Management, LLC (‘‘CSAM’’), Credit Suisse Asset
Management Limited (‘‘CSAML’’), Credit Suisse
Hedging-Griffo Servicos Internaçionais S.A., Credit
Suisse Securities (USA) LLC (‘‘CSSU’’) and CS Bank
(collectively, the ‘‘2014 CS Applicants’’) received
temporary and permanent relief, respectively, from
the Commission under section 9(c) of the Act
exempting such 2014 CS Applicants from section
9(a) as a result of the 2014 Plea and a related
Commission settlement announced on February 21,
2014. See In the Matter of Credit Suisse Group AG,
SEC Rel. Nos. 34–71593 and IA–3782 (Feb. 21,
2024) and In the Matter of Credit Suisse Asset
Management, LLC, et al., SEC Rel. Nos. IC–31051
(May 19, 2014) (notice and temporary order) and
31082 (June 16, 2014) (permanent order).
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13. According to the Statement of
Facts that served as the basis for the
2025 Plea Agreement (the ‘‘2025
Statement of Facts’’), CSSAG, its former
sister entity CS Bank, and certain of its
subsidiaries and affiliates at the time of
the merger of UBS Group and Credit
Suisse Group AG (‘‘Credit Suisse’’) on
June 12, 2023 (collectively, the ‘‘CSSAG
Affiliates’’) did not adequately identify
U.S.-related accounts prior to the 2014
Plea, which partially forms DOJ’s claim
that the 2014 Plea was violated.
14. Additionally, the 2025 Statement
of Facts stated that the CSSAG
Affiliates’ post-plea conduct—through
to approximately July 2021—breached
the terms of the 2014 Plea Agreement.
According to the 2025 Statement of
Facts, the CSSAG Affiliates failed to
close recalcitrant accounts that they
knew to be U.S. accounts in a timely
fashion, opened accounts for U.S.
persons after the 2014 Plea under
circumstances where the accounts were
not declared to the U.S., and failed to
provide in a timely and complete
manner the requisite information about
U.S. accounts, which assisted U.S.
clients in concealing their offshore
assets from the IRS.
15. Following the events that led to
2025 Plea Agreement, on March 23,
2023, UBS Group announced a merger
agreement to acquire Credit Suisse,
which is ongoing and has occurred in
multiple steps (the ‘‘Merger’’).
16. UBS Group and Credit Suisse
completed the step of merging their
holding companies on June 12, 2023.9
UBS AG and CS Bank, the main
operating subsidiaries of UBS Group
and Credit Suisse, respectively, merged
on May 31, 2024, with CS Bank ceasing
to exist and UBS AG as the surviving
entity succeeding to all the rights and
obligations of CS Bank by operation of
law.
9 Prior to the first step of the Merger, on June 7,
2023, the Commission simultaneously issued a
notice of the filing of the application and a
temporary conditional order exempting CSSU,
Credit Suisse First Boston Mortgage Securities Corp.
(‘‘CSFB’’), DLJ Mortgage Capital, Inc. (‘‘DLJ’’, and
together with CSSU and CSFB, the ‘‘Settling
Entities’’), CSAM and CSAML (collectively with the
Settling Entities, the ‘‘2023 Fund Servicing
Applicants,’’ and, collectively, with DLJ and CSFB,
the ‘‘2023 Applicants’’), and UBS Covered Persons
(as defined in the relevant application) from section
9(a) of the Act with respect to an injunction against
the Settling Entities entered on October 24, 2022 by
the Superior Court of New Jersey relating to
violations of state law in connection with the offer,
sale, or purchase of more than a dozen residential
mortgage-backed securities between May 2006 and
April 2007. Credit Suisse Asset Management, LLC.,
et al.; Release No. IC–34941 (June 7, 2023). On July
5, 2023, the Commission issued the Permanent
Order. Credit Suisse Asset Management, LLC., et al.;
Release No. IC–34956 (July 5, 2023).
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17. On May 1, 2024, CSAM was
merged with and into UBSAM, with
UBSAM as the surviving entity. UBSAM
is now the investment adviser to the
Funds previously advised by CSAM.
Separately, a subadvisory agreement
relating to a Fund subadvised by
CSAML—one of the 2014 CS
Applicants—has been terminated.
Additionally, on May 1, 2024, Credit
Suisse’s mutual fund underwriting and
distribution activity and certain asset
management dedicated personnel were
transferred from CSSU, an entity within
Credit Suisse’s legacy investment bank
division, to UBSAM (US). No legacy
Credit Suisse entities have provided
Fund Servicing Activities since May 1,
2024 and no legacy Credit Suisse entity
would rely on the Orders as all the
legacy Credit Suisse entities that have
engaged in Fund Servicing Activities
have transferred their Fund Servicing
Activities to the Fund Servicing
Applicants.
18. As of September 30, 2024, UBS
had approximately $6.2 trillion of
invested assets for clients globally, of
which over $2 trillion was managed in
the United States. UBSAM advises
approximately $542 billion as of
December 31, 2024, including
approximately $128.9 billion in Fund
assets invested by tens of thousands of
investors.
Applicants’ Legal Analysis
1. Section 9(a)(1) of the Act provides,
in pertinent part, that a person may not
serve or act as an investment adviser or
depositor of any registered investment
company or as principal underwriter for
any Open-End Fund, UIT, or FACC, if
such person ‘‘within 10 years has been
convicted of any felony or misdemeanor
. . . arising out of such person’s
conduct as . . . [a] bank.’’ Section
2(a)(10) of the Act defines the term
‘‘convicted’’ to include a plea of
guilty.10 Section 9(a)(3) of the Act
extends the prohibitions of section
9(a)(1) to a company, any affiliated
person of which has been disqualified
under the provisions of section 9(a)(1).
Section 2(a)(3) of the Act defines
‘‘affiliated person’’ to include, among
others, any person directly or indirectly
controlling, controlled by, or under
common control with, the other person.
10 Section 59 of the Act provides that Section 9
of the Act shall apply to a BDC to the same extent
as a registered closed-end investment company.
ESCs are not specifically mentioned in section 9 of
the Act but are nonetheless required to comply with
its requirements under the terms of the exemptive
relief under which they operate. See, e.g., In the
Matter of Credit Suisse First Boston, Inc., File No.
813–198, Investment Company Act Release Nos.
25670 (July 23, 2002) (notice) and 25702 (Aug. 20,
2002) (order).
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The Pleading Entity is an Affiliated
Person of each Fund Servicing
Applicant within the meaning of section
2(a)(3) of the Act. Therefore, the 2025
Plea would result in a disqualification
of Fund Servicing Applicants for ten
years under section 9(a)(3) from acting
in any of the capacities listed in section
9(a), by effect of a conviction described
in section 9(a)(1).
2. Section 9(c) of the Act provides
that: ‘‘[t]he Commission shall by order
grant [an] application [for relief from the
prohibitions of subsection 9(a)], either
unconditionally or on an appropriate
temporary or other conditional basis, if
it is established [i] that the prohibitions
of subsection [9](a), as applied to such
person, are unduly or
disproportionately severe or [ii] that the
conduct of such person has been such
as not to make it against the public
interest or protection of investors to
grant such application.’’ Applicants
have filed an application pursuant to
section 9(c) seeking a Temporary Order
and a Permanent Order exempting Fund
Servicing Applicants and other Covered
Persons from the disqualification
provisions of section 9(a) of the Act. The
Covered Persons may, if the Orders are
granted, in the future act in any of the
capacities contemplated by section 9(a)
of the Act subject to the applicable
terms and conditions of the Orders.
3. Applicants believe they meet the
standards for exemption specified in
section 9(c). Applicants assert that: (i)
the conduct underlying the 2025 Plea
Agreement (as described in the 2025
Statement of Facts) (the ‘‘Conduct’’) did
not involve any of the Fund Servicing
Applicants acting as an investment
adviser, depositor or principal
underwriter for any Fund, or any Fund
with respect to which Fund Servicing
Applicants engage in Fund Servicing
Activities; (ii) application of the
statutory bar would impose significant
hardships on the Funds and their
shareholders; (iii) the prohibitions of
section 9(a), if applied to Fund
Servicing Applicants, would be unduly
or disproportionately severe; (iv) the
Conduct has not been such that would
make it against the public interest or
protection of investors to grant the
exemption from section 9(a); and (v) the
Conduct occurred prior to the
completion of CS Bank’s merger with
UBS.
4. Applicants argue that it would be
against the public interest and
protection of investors, and would be
unduly and disproportionately severe,
to bar the Fund Servicing Applicants
(all of which are UBS entities that
would be considered Affiliated Persons
of CSSAG only as a result of the Merger)
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from providing Fund Servicing
Activities as a result of Conduct by
Credit Suisse’s prior banking business
that is wholly unrelated to any Fund
Servicing Activities.
5. Applicants assert that the inability
of the Fund Servicing Applicants to
continue providing investment
advisory, sub-advisory, and
underwriting services to the Funds
would result in the Funds and their
shareholders facing significant
hardships. As a practical matter,
disqualifying the Fund Servicing
Applicants from engaging in Fund
Servicing Activities for the Funds
would deprive the Funds of the
advisory or sub-advisory and
underwriting services that shareholders
expected the Funds would receive when
they decided to invest in the Funds. In
addition, disqualifying the Fund
Servicing Applicants could result in
substantial costs to the Funds.
Transitioning the Funds to another
investment adviser (including subadviser) and principal underwriter
without adequate time for the Fund
Servicing Applicants and the boards of
the Funds to consider and properly
evaluate alternative options could result
in substantial costs to, and lost
opportunities for, the Funds and their
underlying investors. Applicants also
state that the effect of a disqualification
on the Applicants’ businesses and
employees would also be severe. The
Applicants have committed substantial
capital and other resources to fostering
highly valued long-term client
relationships and establishing expertise
in financial advisory and underwriting
services. There are currently 79 UBS
RICs with over tens of thousands of
shareholders and over $125 billion in
total assets. Without the requested
relief, UBSAM (US) and UBSFS would
lose a significant part of their business,
potentially leading to layoffs of
personnel. In the case of UBSAM and
UBSAM (PR), the effects of a
disqualification would be particularly
significant, as these investment advisers
provide investment advisory services
with respect to approximately $543.8
billion in assets under management in
the United States ($130.7 billion of
which constitutes the assets under
management of advised and, for
UBSAM, sub-advised Funds) as of
December 31, 2024. The disqualification
of UBSAM from providing investment
advisory services to the ESCs without a
section 9(c) relief is similarly not in the
public interest or in furtherance of the
protection of investors, and would
frustrate the expectations of the eligible
employees who invested in the ESCs.
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Because the ESCs have been formed for
certain key employees, officers and
directors of UBSAM and its affiliates, it
would not be consistent with the
purposes of the employees’ securities
company provisions of the Act, and it
would be impermissible under the terms
and conditions of the ESC exemptive
order under which the ESC operates to
require another entity not affiliated with
UBSAM to manage the ESCs.
6. The Applicants represent that: (i)
none of the current or former directors,
officers or employees of the Applicants
(other than certain current and former
personnel of CSSAG who were not, are
not and will not be involved in Fund
Servicing Activities) had any
involvement in the Conduct; (ii) no
person who has been or who
subsequently may be identified by
CSSAG or any U.S. or non-U.S.
regulatory or enforcement agencies as
having been responsible for the Conduct
will be an officer, director, or employee
of any Applicant, CSSAG, and of any
Covered Person; (iii) no persons who
otherwise were involved in the Conduct
have had, and will have any future,
involvement in the Applicants’,
CSSAG’s or Covered Persons’ activities
in any capacity described in section 9(a)
of the Act; and (iv) because the
directors, officers and employees of the
Applicants and 2014 CS Applicants (as
defined below) (other than certain
current and former personnel of CSSAG
and CS Bank who were not involved in
any Fund Servicing Activities) did not
engage in the Conduct, shareholders of
the Funds were not affected any
differently than if those Funds had
received services from any other nonaffiliated investment adviser or
principal underwriter.
7. In addition, Applicants agree as a
condition of the application that the
material terms and conditions of the
2025 Plea Agreement will be complied
with in all material respects. Applicants
will provide written notification to the
Chief Counsel of the Commission’s
Division of Investment Management
with a copy to the Chief Counsel of the
Commission’s Division of Enforcement
of a material violation of the terms and
conditions of the Orders within 30 days
of discovery of the material violation.
8. Applicants note that as part of the
Merger, UBS has made integration of
Credit Suisse’s U.S. compliance
framework a top priority. UBS and
Credit Suisse have undertaken extensive
efforts to accomplish the integration,
including through a specific project that
covers multiple workstreams staffed
with dozens of UBS and Credit Suisse
subject matter experts, and is subject to
a rigorous governance framework with
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
19747
senior management oversight.
Applicants further state that UBS will
undertake certain other remedial
measures, as described in greater detail
in the application. These remedial
measures by UBS include: (i) continuing
to incorporate Credit Suisse into its U.S.
banking compliance framework; (ii)
integrating appropriate enhancements
from Credit Suisse’s compliance
framework, which efforts include
detailed side-by-side comparisons of
elements of the U.S. compliance
framework from both banks, to ensure
coverage and identify complementary
opportunities for enhancement; (iii)
analysis of key compliance lessons
learned by Credit Suisse after the 2014
Plea, including from the monitorship,
DOJ’s investigation, and significant
cases of interest; (iv) implementing
existing client reviews and remediation
to avoid onboarding of unwanted U.S.
person client relationships; (v)
migration of Credit Suisse accounts onto
the UBS platform and IT systems; and
(vi) undertaking efforts to ensure
CSSAG’s compliance with its
obligations under the 2025 Plea
Agreement and to continue related
compliance efforts stemming from the
2014 Plea Agreement, which are
expected to include continuing to report
and close recalcitrant U.S. accounts
held at Credit Suisse, completing work
to integrate Credit Suisse’s compliance
program into the existing UBS
framework, submitting quarterly reports
to the DOJ regarding the opening of U.S.
accounts, the status of existing
remediation efforts, including the
monitoring and closing of U.S. accounts,
and future plans to change, implement,
and/or enforce compliance efforts, and
providing other cooperation and
assistance with tax prosecutions as
specified in the 2025 Plea Agreement.
After the merger, UBS conducted a riskbased review of Credit Suisse employees
who were implicated in the Conduct,
and referred certain personnel to UBS’s
disciplinary and conduct review
process, which review remains ongoing.
As of the date of the application,
employees whose disciplinary review
processes have been concluded and
were found responsible for the Conduct
had either left Credit Suisse prior to the
identification of the Conduct or were
subsequently terminated by UBS.11 As a
11 For purposes of the application, an employee
is deemed responsible for the Conduct if the person:
(i) has been or subsequently may be identified by
any U.S. or non-U.S. regulatory or enforcement
agencies as responsible for the Conduct or (ii) was
found by UBS to have knowingly and directly
participated (e.g., through their role as a
relationship manager and directly interfacing with
E:\FR\FM\09MYN1.SGM
Continued
09MYN1
19748
Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
result of the foregoing, the Applicants
submit that absent relief, the
prohibitions of section 9(a) as applied to
the Covered Persons would be unduly
or disproportionately severe, and that
the Conduct did not constitute conduct
that would make it against the public
interest or protection of investors to
grant the exemption.
9. Certain of the Applicants and their
affiliates have previously applied for
exemptive orders under section 9(c) of
the Act, as described in greater detail in
the application.
lotter on DSK11XQN23PROD with NOTICES1
Applicants’ Conditions
Applicants agree that any order
granted by the Commission pursuant to
the application will be subject to the
following conditions:
1. Any temporary exemption granted
pursuant to the application will be
without prejudice to, and will not limit
the Commission’s rights in any manner
with respect to, any Commission
investigation of, or administrative
proceedings involving or against,
Covered Persons, including, without
limitation, the consideration by the
Commission of a permanent exemption
from section 9(a) of the Act requested
pursuant to the application or the
revocation or removal of any temporary
exemptions granted under the Act in
connection with the application.
2. Neither the Applicants, UBS AG,
nor any of the other Covered Persons
will employ any person who previously
has been or who subsequently may be
identified by CSSAG or any U.S. or nonU.S. regulatory or enforcement agencies
as having been responsible for the
Conduct in any capacity without first
making a further application to the
Commission pursuant to section 9(c).
3. UBS AG, each Applicant and
Covered Person will adopt and
implement policies and procedures
reasonably designed to ensure that it
will comply with the terms and
conditions of the Orders within 60 days
of such Orders or as such later date as
may be contemplated by the
Commission, as applicable.
4. The material terms and conditions
of the 2025 Plea Agreement will be
complied with in all material respects.
5. The Applicants will provide
written notification to the Chief Counsel
clients) in the Conduct post-2014 Plea, upon the
conclusion of UBS’s disciplinary and conduct
review process. For purposes of UBS’s
determination of whether a particular employee is
deemed responsible for the Conduct, this does not
include any employee who did not knowingly
participate in the Conduct but may have been
deemed responsible due to failure to follow
elements of corporate compliance policy (e.g., an
employee who did not follow-up on information
that may have led to discovery of the misconduct).
VerDate Sep<11>2014
17:11 May 08, 2025
Jkt 265001
of the Commission’s Division of
Investment Management with a copy to
the Chief Counsel of the Commission’s
Division of Enforcement of a material
violation of the terms and conditions of
the Orders within 30 days of discovery
of the material violation.
Temporary Order
The Commission has considered the
matter and finds that Applicants have
made the necessary showing to justify
granting a temporary exemption.
Accordingly,
It is hereby ordered, pursuant to
section 9(c) of the Act, that the Fund
Servicing Applicants and any other
Covered Persons are granted a
temporary exemption from the
provisions of section 9(a), effective as
the date of this order, solely with
respect to the 2025 Plea entered into
pursuant to the 2025 Plea Agreement,
subject to the representations and
conditions in the application, until the
Commission takes final action on the
Applicants’ application for a permanent
order.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–08125 Filed 5–8–25; 8:45 am]
BILLING CODE 8011–01–P
[Investment Company Act Release No.
35568; File No. 812–15758]
AGTB Fund Manager, LLC, et al.
May 5, 2025.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
Notice of application for an order
under sections 17(d) and 57(i) of the
Investment Company Act of 1940 (the
‘‘Act’’) and rule 17d–1 under the Act to
permit certain joint transactions
otherwise prohibited by sections 17(d)
and 57(a)(4) of the Act and rule 17d–1
under the Act.
SUMMARY OF APPLICATION: Applicants
request an order to permit certain
business development companies
(‘‘BDCs’’) and closed-end management
investment companies to co-invest in
portfolio companies with each other and
with certain affiliated investment
entities.
APPLICANTS: AGTB Fund Manager, LLC,
TPG Twin Brook Capital Income Fund,
Angelo, Gordon & Co., L.P., and certain
of their affiliated entities as described in
Appendix A to the application.
Frm 00081
Fmt 4703
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 30, 2025, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
The Commission:
Secretarys-Office@sec.gov. Applicants:
Jenny B. Neslin, TPG Twin Brook
Capital Income Fund, 245 Park Avenue,
26th Floor, New York, NY 10167,
jneslin@tpg.com; and Rajib Chanda and
Steven Grigoriou, Simpson Thacher &
Bartlett LLP, 900 G Street NW,
Washington, DC 20001.
ADDRESSES:
SECURITIES AND EXCHANGE
COMMISSION
PO 00000
The application was filed
on April 17, 2025, and amended on May
2, 2025.
FILING DATES:
Sfmt 4703
FOR FURTHER INFORMATION CONTACT:
Adam Large, Senior Special Counsel,
Kris Easter Guidroz, Senior Counsel, or
Daniele Marchesani, Assistant Chief
Counsel, at (202) 551–6825 (Division of
Investment Management, Chief
Counsel’s Office).
For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ first amended application,
dated May 2, 2025, which may be
obtained via the Commission’s website
by searching for the file number at the
top of this document, or for an
Applicant using the Company name
search field, on the SEC’s EDGAR
system.
The SEC’s EDGAR system may be
searched at https://www.sec.gov/edgar/
searchedgar/companysearch.html. You
may also call the SEC’s Office of
Investor Education and Advocacy at
(202) 551–8090.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\09MYN1.SGM
09MYN1
]]>Agencies
[Federal Register Volume 90, Number 89 (Friday, May 9, 2025)]
[Notices]
[Pages 19744-19748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08125]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35566; File No. 812-15779]
Credit Suisse Services AG, et al.; Notice of Application and
Temporary Order
May 5, 2025.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Temporary order and notice of application for a permanent order
under section 9(c) of the Investment Company Act of 1940 (``Act'').
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Summary of Application: Applicants (defined below) have applied for
a temporary order (``Temporary Order'') exempting them from section
9(a) of the Act with respect to a guilty plea entered by Credit Suisse
Services AG (the ``Pleading Entity'' or ``CSSAG'') in connection with a
plea agreement (the ``2025 Plea Agreement'') between the Pleading
Entity and the United States Department of Justice (``DOJ''), until the
Commission takes final action on an application for a permanent order
(the ``Permanent Order,'' and with the Temporary Order, the
``Orders''). Applicants also have applied for a permanent order.
Applicants: CSSAG, UBS Asset Management (Americas) LLC (``UBSAM''),
UBS Asset Management (US) Inc. (``UBSAM (US)''), UBS Asset Managers of
Puerto Rico (``UBSAM (PR)''), and UBS Financial Services Inc.
(``UBSFS'') (each, an ``Applicant'' and, collectively, the
``Applicants''), and UBS AG (``UBS AG'').\1\
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\1\ UBS AG is a party to the application solely for purposes of
making the representations and agreeing to the conditions in the
application that apply to it.
---------------------------------------------------------------------------
Filing Date: The application was filed and amended on May 5, 2025.
Hearing or Notification of Hearing: The Temporary Order will be
effective until such time as the Commission takes final action on the
application by issuing an order granting the requested relief, unless
the Commission orders a hearing. Interested persons may request a
hearing by emailing the Commission's Secretary at [email protected] and serving the Applicants with a copy of the request by
email, if an email address is listed for the relevant Applicant below,
or personally or by mail, if a physical address is listed for the
relevant Applicant below. Hearing requests should be received by the
Commission by 5:30 p.m. on May 30, 2025, and should be accompanied by
proof of service on the Applicants, in the form of an affidavit, or,
for lawyers, a certificate of service. Pursuant to rule 0-5 under the
Act, hearing requests should state the nature of the writer's interest,
any facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by emailing the
Commission's Secretary.
ADDRESSES: The Commission: [email protected]. Applicants:
Patrick Shilling, UBS AG, 11 Madison Avenue, New York, New York 10010;
Norm Champ, P.C. and Mark Filip, P.C., Kirkland & Ellis LLP, 601
Lexington Avenue, New York, New York 10022.
FOR FURTHER INFORMATION CONTACT: Christopher D. Carlson, Senior
Counsel, or Daniele Marchesani, Assistant Chief Counsel, at (202) 551-
6825 (Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a temporary order and a
summary of the application. The complete application may be obtained
via the Commission's website by searching for the file number at the
top of this document, or for an Applicant using the Company name search
field, on the SEC's EDGAR system. The SEC's EDGAR system may be
searched at https://www.sec.gov/edgar/searchedgar/legacy/companysearch.html. You may also call the SEC's Office of Investor
Education and Advocacy at (202) 551-8090.
Applicants' Representations
1. CSSAG, a company organized under the laws of Switzerland,
provided banking, administrative, legal and
[[Page 19745]]
compliance services to Credit Suisse AG (the ``CS Bank'').\2\
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\2\ The Pleading Entity is an applicant, but does not and will
not serve as investment adviser, depositor or principal underwriter
to any registered investment company and is not a Covered Person (as
defined below).
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2. UBSAM, a limited liability company operating under Delaware law,
is registered as an investment adviser under the Investment Advisers
Act of 1940 (the ``Advisers Act''). UBSAM serves as investment adviser
(either as primary investment adviser or as investment sub-adviser) to
each Fund \3\ listed in Part 1 of Appendix A to the application.
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\3\ The term ``Fund'' or ``Funds,'' as used in the application,
refers to any U.S. registered investment company (``RIC''),
employees' securities company (``ESC''), and any investment company
that has elected to be treated as a business development company
under the Act (``BDC'') for which an Applicant currently provides,
or may in the future provide, Fund Servicing Activities (defined
below), or a Covered Person (defined below), subject to the terms
and conditions of the Orders.
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3. UBSAM (US), a corporation formed under Delaware law, is
registered as a broker-dealer under the Securities Exchange Act of 1934
(the ``Exchange Act''). UBSAM (US) serves as principal underwriter and
distributor to each open-end RIC (``Open-End Fund'') listed in Part 2
of Appendix A to the application.
4. UBSAM (PR), a division of UBS Trust Company of Puerto Rico, a
trust company formed under the Puerto Rico Trust Company Act, is
registered as an investment adviser under the Advisers Act. UBSAM (PR)
serves as investment adviser to each Fund listed in Part 3 of Appendix
A to the application.
5. UBSFS is a corporation organized under the laws of Delaware.
UBSFS is registered with the Commission as a broker-dealer under the
Exchange Act and is registered as an investment adviser under the
Advisers Act. UBSFS serves as principal underwriter to each Fund listed
in Part 4 of Appendix A to the application.
6. Each of the above Applicants is an indirect wholly-owned
subsidiary of UBS AG (UBS AG, together with its wholly-owned
subsidiaries and affiliated entities, ``UBS''). UBS AG, a company
incorporated under the laws of Switzerland, is a Swiss-based global
financial services firm with offices in more than 50 countries. UBS AG,
its affiliates, and subsidiaries engage in a full range of financial
services activities in Switzerland and globally, including personal
banking, commercial banking, investment banking, global wealth
management, and asset management.\4\
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\4\ UBS Group AG (``UBS Group''), the ultimate parent of the
Pleading Entity, does not and will not serve as investment adviser,
depositor or principal underwriter to any registered investment
company and is not a Covered Person.
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7. Currently, UBSAM, UBSAM (US), UBSAM (PR) and UBSFS (together,
the ``Fund Servicing Applicants''), collectively serve as investment
adviser or investment sub-adviser to RICs and ESCs and as principal
underwriter to Open-End Funds (such activities, collectively, ``Fund
Servicing Activities'').\5\ The Pleading Entity is an ``affiliated
person'' within the meaning of section 2(a)(3) of the Act (``Affiliated
Person'') of each of the Fund Servicing Applicants.\6\
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\5\ The term ``Fund Servicing Activities,'' as it relates to
Covered Persons (defined below), refers to each of the capacities
identified in Section 9(a) of the Act in which a Covered Person
currently serves or may serve in the future.
\6\ Section 2(a)(3) of the Act defines ``affiliated person'' to
include, among others, any person directly or indirectly
controlling, controlled by, or under common control with, the other
person.
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8. While no existing company of which the Pleading Entity is an
Affiliated Person (other than the Applicants) currently serves as an
investment adviser or depositor of any RIC, ESC or BDC, or as principal
underwriter for any Open-End Fund, unit investment trust (``UIT''), or
registered face-amount certificate company (``FACC''), the Applicants
request that any relief granted by the Commission pursuant to the
application also apply to any existing company (with the exception of
UBS AG and the 2014 CS Applicants (as defined below)) of which the
Pleading Entity is an Affiliated Person and to any other company of
which the Pleading Entity may become an Affiliated Person in the future
(together with the Applicants other than the Pleading Entity, the
``Covered Persons'') with respect to any activity contemplated by
section 9(a) of the Act.\7\
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\7\ Applicants represent that no legacy Credit Suisse entities
have provided Fund Servicing Activities since May 1, 2024 and no
legacy Credit Suisse entity would rely on the Orders as all the
legacy Credit Suisse entities that have engaged in Fund Servicing
Activities have transferred their Fund Servicing Activities to the
Fund Servicing Applicants.
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9. The 2025 Plea Agreement relates to a one-count criminal
information that DOJ filed on May 19, 2014 in the District Court for
the Eastern District of Virginia (the ``Information'') charging CS Bank
with conspiracy to commit tax fraud related to accounts CS Bank
established for U.S. cross-border clients in violation of Title 18,
United States Code, Section 371. CS Bank waived indictment and pleaded
guilty to the charge set out in the Information (the ``2014 Plea'')
through a plea agreement dated May 19, 2014 (the ``2014 Plea
Agreement'').
10. According to the Statement of Facts that served as the basis
for the 2014 Plea Agreement (the ``2014 Statement of Facts''), CS Bank
operated a cross-border banking business that knowingly and willfully
aided U.S. clients in opening and maintaining undeclared accounts and
concealing their offshore assets and income from the Internal Revenue
Service (the ``IRS''), assisted U.S. clients in filing false tax
returns with the IRS, and failed to develop and implement an effective
system of compliance controls to prevent and detect policy violations
regarding the proper handling of accounts for U.S. clients, among other
admissions.
11. Under the terms of the 2014 Plea Agreement, CS Bank agreed to
undertake, among other actions: (i) to close the accounts of
recalcitrant account holders (as defined in Section 1471(d)(6) of the
Internal Revenue Code); (ii) implement procedures to prevent its
employees from assisting recalcitrant account holders to engage in
further concealment in connection with closing any account or
transferring any funds; (iii) not open any U.S. Related Accounts (as
defined in paragraph I.B.9 of the Program for Non-Prosecution
Agreements or Non-Target Letters for Swiss Banks (the ``Program''))
except on conditions that ensure the account will be declared to the
United States and will be subject to disclosure by the CS Bank; and
(iv) promptly disclose all evidence and information described in
Sections II.D.I and II.D.2 of the Program.\8\
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\8\ The Program is included as an attachment to the Joint
Statement between the U.S. Department of Justice and the Swiss
Federal Department of Finance (Aug. 29, 2013), available at https://www.justice.gov/tax/file/631356/dl. On May 19, 2014 and June 16,
2014, Credit Suisse Asset Management, LLC (``CSAM''), Credit Suisse
Asset Management Limited (``CSAML''), Credit Suisse Hedging-Griffo
Servicos Interna[ccedil]ionais S.A., Credit Suisse Securities (USA)
LLC (``CSSU'') and CS Bank (collectively, the ``2014 CS
Applicants'') received temporary and permanent relief, respectively,
from the Commission under section 9(c) of the Act exempting such
2014 CS Applicants from section 9(a) as a result of the 2014 Plea
and a related Commission settlement announced on February 21, 2014.
See In the Matter of Credit Suisse Group AG, SEC Rel. Nos. 34-71593
and IA-3782 (Feb. 21, 2024) and In the Matter of Credit Suisse Asset
Management, LLC, et al., SEC Rel. Nos. IC-31051 (May 19, 2014)
(notice and temporary order) and 31082 (June 16, 2014) (permanent
order).
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12. In May 2025, as part of a global settlement, CSSAG entered into
the 2025 Plea Agreement whereby CSSAG agreed to waive indictment and
plead guilty to a single-count criminal information charging CSSAG with
conspiracy to commit tax evasion in violation of Title 18, United
States Code, Section 371 (the ``2025 Plea'').
[[Page 19746]]
13. According to the Statement of Facts that served as the basis
for the 2025 Plea Agreement (the ``2025 Statement of Facts''), CSSAG,
its former sister entity CS Bank, and certain of its subsidiaries and
affiliates at the time of the merger of UBS Group and Credit Suisse
Group AG (``Credit Suisse'') on June 12, 2023 (collectively, the
``CSSAG Affiliates'') did not adequately identify U.S.-related accounts
prior to the 2014 Plea, which partially forms DOJ's claim that the 2014
Plea was violated.
14. Additionally, the 2025 Statement of Facts stated that the CSSAG
Affiliates' post-plea conduct--through to approximately July 2021--
breached the terms of the 2014 Plea Agreement. According to the 2025
Statement of Facts, the CSSAG Affiliates failed to close recalcitrant
accounts that they knew to be U.S. accounts in a timely fashion, opened
accounts for U.S. persons after the 2014 Plea under circumstances where
the accounts were not declared to the U.S., and failed to provide in a
timely and complete manner the requisite information about U.S.
accounts, which assisted U.S. clients in concealing their offshore
assets from the IRS.
15. Following the events that led to 2025 Plea Agreement, on March
23, 2023, UBS Group announced a merger agreement to acquire Credit
Suisse, which is ongoing and has occurred in multiple steps (the
``Merger'').
16. UBS Group and Credit Suisse completed the step of merging their
holding companies on June 12, 2023.\9\ UBS AG and CS Bank, the main
operating subsidiaries of UBS Group and Credit Suisse, respectively,
merged on May 31, 2024, with CS Bank ceasing to exist and UBS AG as the
surviving entity succeeding to all the rights and obligations of CS
Bank by operation of law.
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\9\ Prior to the first step of the Merger, on June 7, 2023, the
Commission simultaneously issued a notice of the filing of the
application and a temporary conditional order exempting CSSU, Credit
Suisse First Boston Mortgage Securities Corp. (``CSFB''), DLJ
Mortgage Capital, Inc. (``DLJ'', and together with CSSU and CSFB,
the ``Settling Entities''), CSAM and CSAML (collectively with the
Settling Entities, the ``2023 Fund Servicing Applicants,'' and,
collectively, with DLJ and CSFB, the ``2023 Applicants''), and UBS
Covered Persons (as defined in the relevant application) from
section 9(a) of the Act with respect to an injunction against the
Settling Entities entered on October 24, 2022 by the Superior Court
of New Jersey relating to violations of state law in connection with
the offer, sale, or purchase of more than a dozen residential
mortgage-backed securities between May 2006 and April 2007. Credit
Suisse Asset Management, LLC., et al.; Release No. IC-34941 (June 7,
2023). On July 5, 2023, the Commission issued the Permanent Order.
Credit Suisse Asset Management, LLC., et al.; Release No. IC-34956
(July 5, 2023).
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17. On May 1, 2024, CSAM was merged with and into UBSAM, with UBSAM
as the surviving entity. UBSAM is now the investment adviser to the
Funds previously advised by CSAM. Separately, a subadvisory agreement
relating to a Fund subadvised by CSAML--one of the 2014 CS Applicants--
has been terminated. Additionally, on May 1, 2024, Credit Suisse's
mutual fund underwriting and distribution activity and certain asset
management dedicated personnel were transferred from CSSU, an entity
within Credit Suisse's legacy investment bank division, to UBSAM (US).
No legacy Credit Suisse entities have provided Fund Servicing
Activities since May 1, 2024 and no legacy Credit Suisse entity would
rely on the Orders as all the legacy Credit Suisse entities that have
engaged in Fund Servicing Activities have transferred their Fund
Servicing Activities to the Fund Servicing Applicants.
18. As of September 30, 2024, UBS had approximately $6.2 trillion
of invested assets for clients globally, of which over $2 trillion was
managed in the United States. UBSAM advises approximately $542 billion
as of December 31, 2024, including approximately $128.9 billion in Fund
assets invested by tens of thousands of investors.
Applicants' Legal Analysis
1. Section 9(a)(1) of the Act provides, in pertinent part, that a
person may not serve or act as an investment adviser or depositor of
any registered investment company or as principal underwriter for any
Open-End Fund, UIT, or FACC, if such person ``within 10 years has been
convicted of any felony or misdemeanor . . . arising out of such
person's conduct as . . . [a] bank.'' Section 2(a)(10) of the Act
defines the term ``convicted'' to include a plea of guilty.\10\ Section
9(a)(3) of the Act extends the prohibitions of section 9(a)(1) to a
company, any affiliated person of which has been disqualified under the
provisions of section 9(a)(1). Section 2(a)(3) of the Act defines
``affiliated person'' to include, among others, any person directly or
indirectly controlling, controlled by, or under common control with,
the other person. The Pleading Entity is an Affiliated Person of each
Fund Servicing Applicant within the meaning of section 2(a)(3) of the
Act. Therefore, the 2025 Plea would result in a disqualification of
Fund Servicing Applicants for ten years under section 9(a)(3) from
acting in any of the capacities listed in section 9(a), by effect of a
conviction described in section 9(a)(1).
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\10\ Section 59 of the Act provides that Section 9 of the Act
shall apply to a BDC to the same extent as a registered closed-end
investment company. ESCs are not specifically mentioned in section 9
of the Act but are nonetheless required to comply with its
requirements under the terms of the exemptive relief under which
they operate. See, e.g., In the Matter of Credit Suisse First
Boston, Inc., File No. 813-198, Investment Company Act Release Nos.
25670 (July 23, 2002) (notice) and 25702 (Aug. 20, 2002) (order).
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2. Section 9(c) of the Act provides that: ``[t]he Commission shall
by order grant [an] application [for relief from the prohibitions of
subsection 9(a)], either unconditionally or on an appropriate temporary
or other conditional basis, if it is established [i] that the
prohibitions of subsection [9](a), as applied to such person, are
unduly or disproportionately severe or [ii] that the conduct of such
person has been such as not to make it against the public interest or
protection of investors to grant such application.'' Applicants have
filed an application pursuant to section 9(c) seeking a Temporary Order
and a Permanent Order exempting Fund Servicing Applicants and other
Covered Persons from the disqualification provisions of section 9(a) of
the Act. The Covered Persons may, if the Orders are granted, in the
future act in any of the capacities contemplated by section 9(a) of the
Act subject to the applicable terms and conditions of the Orders.
3. Applicants believe they meet the standards for exemption
specified in section 9(c). Applicants assert that: (i) the conduct
underlying the 2025 Plea Agreement (as described in the 2025 Statement
of Facts) (the ``Conduct'') did not involve any of the Fund Servicing
Applicants acting as an investment adviser, depositor or principal
underwriter for any Fund, or any Fund with respect to which Fund
Servicing Applicants engage in Fund Servicing Activities; (ii)
application of the statutory bar would impose significant hardships on
the Funds and their shareholders; (iii) the prohibitions of section
9(a), if applied to Fund Servicing Applicants, would be unduly or
disproportionately severe; (iv) the Conduct has not been such that
would make it against the public interest or protection of investors to
grant the exemption from section 9(a); and (v) the Conduct occurred
prior to the completion of CS Bank's merger with UBS.
4. Applicants argue that it would be against the public interest
and protection of investors, and would be unduly and disproportionately
severe, to bar the Fund Servicing Applicants (all of which are UBS
entities that would be considered Affiliated Persons of CSSAG only as a
result of the Merger)
[[Page 19747]]
from providing Fund Servicing Activities as a result of Conduct by
Credit Suisse's prior banking business that is wholly unrelated to any
Fund Servicing Activities.
5. Applicants assert that the inability of the Fund Servicing
Applicants to continue providing investment advisory, sub-advisory, and
underwriting services to the Funds would result in the Funds and their
shareholders facing significant hardships. As a practical matter,
disqualifying the Fund Servicing Applicants from engaging in Fund
Servicing Activities for the Funds would deprive the Funds of the
advisory or sub-advisory and underwriting services that shareholders
expected the Funds would receive when they decided to invest in the
Funds. In addition, disqualifying the Fund Servicing Applicants could
result in substantial costs to the Funds. Transitioning the Funds to
another investment adviser (including sub-adviser) and principal
underwriter without adequate time for the Fund Servicing Applicants and
the boards of the Funds to consider and properly evaluate alternative
options could result in substantial costs to, and lost opportunities
for, the Funds and their underlying investors. Applicants also state
that the effect of a disqualification on the Applicants' businesses and
employees would also be severe. The Applicants have committed
substantial capital and other resources to fostering highly valued
long-term client relationships and establishing expertise in financial
advisory and underwriting services. There are currently 79 UBS RICs
with over tens of thousands of shareholders and over $125 billion in
total assets. Without the requested relief, UBSAM (US) and UBSFS would
lose a significant part of their business, potentially leading to
layoffs of personnel. In the case of UBSAM and UBSAM (PR), the effects
of a disqualification would be particularly significant, as these
investment advisers provide investment advisory services with respect
to approximately $543.8 billion in assets under management in the
United States ($130.7 billion of which constitutes the assets under
management of advised and, for UBSAM, sub-advised Funds) as of December
31, 2024. The disqualification of UBSAM from providing investment
advisory services to the ESCs without a section 9(c) relief is
similarly not in the public interest or in furtherance of the
protection of investors, and would frustrate the expectations of the
eligible employees who invested in the ESCs. Because the ESCs have been
formed for certain key employees, officers and directors of UBSAM and
its affiliates, it would not be consistent with the purposes of the
employees' securities company provisions of the Act, and it would be
impermissible under the terms and conditions of the ESC exemptive order
under which the ESC operates to require another entity not affiliated
with UBSAM to manage the ESCs.
6. The Applicants represent that: (i) none of the current or former
directors, officers or employees of the Applicants (other than certain
current and former personnel of CSSAG who were not, are not and will
not be involved in Fund Servicing Activities) had any involvement in
the Conduct; (ii) no person who has been or who subsequently may be
identified by CSSAG or any U.S. or non-U.S. regulatory or enforcement
agencies as having been responsible for the Conduct will be an officer,
director, or employee of any Applicant, CSSAG, and of any Covered
Person; (iii) no persons who otherwise were involved in the Conduct
have had, and will have any future, involvement in the Applicants',
CSSAG's or Covered Persons' activities in any capacity described in
section 9(a) of the Act; and (iv) because the directors, officers and
employees of the Applicants and 2014 CS Applicants (as defined below)
(other than certain current and former personnel of CSSAG and CS Bank
who were not involved in any Fund Servicing Activities) did not engage
in the Conduct, shareholders of the Funds were not affected any
differently than if those Funds had received services from any other
non-affiliated investment adviser or principal underwriter.
7. In addition, Applicants agree as a condition of the application
that the material terms and conditions of the 2025 Plea Agreement will
be complied with in all material respects. Applicants will provide
written notification to the Chief Counsel of the Commission's Division
of Investment Management with a copy to the Chief Counsel of the
Commission's Division of Enforcement of a material violation of the
terms and conditions of the Orders within 30 days of discovery of the
material violation.
8. Applicants note that as part of the Merger, UBS has made
integration of Credit Suisse's U.S. compliance framework a top
priority. UBS and Credit Suisse have undertaken extensive efforts to
accomplish the integration, including through a specific project that
covers multiple workstreams staffed with dozens of UBS and Credit
Suisse subject matter experts, and is subject to a rigorous governance
framework with senior management oversight. Applicants further state
that UBS will undertake certain other remedial measures, as described
in greater detail in the application. These remedial measures by UBS
include: (i) continuing to incorporate Credit Suisse into its U.S.
banking compliance framework; (ii) integrating appropriate enhancements
from Credit Suisse's compliance framework, which efforts include
detailed side-by-side comparisons of elements of the U.S. compliance
framework from both banks, to ensure coverage and identify
complementary opportunities for enhancement; (iii) analysis of key
compliance lessons learned by Credit Suisse after the 2014 Plea,
including from the monitorship, DOJ's investigation, and significant
cases of interest; (iv) implementing existing client reviews and
remediation to avoid onboarding of unwanted U.S. person client
relationships; (v) migration of Credit Suisse accounts onto the UBS
platform and IT systems; and (vi) undertaking efforts to ensure CSSAG's
compliance with its obligations under the 2025 Plea Agreement and to
continue related compliance efforts stemming from the 2014 Plea
Agreement, which are expected to include continuing to report and close
recalcitrant U.S. accounts held at Credit Suisse, completing work to
integrate Credit Suisse's compliance program into the existing UBS
framework, submitting quarterly reports to the DOJ regarding the
opening of U.S. accounts, the status of existing remediation efforts,
including the monitoring and closing of U.S. accounts, and future plans
to change, implement, and/or enforce compliance efforts, and providing
other cooperation and assistance with tax prosecutions as specified in
the 2025 Plea Agreement. After the merger, UBS conducted a risk-based
review of Credit Suisse employees who were implicated in the Conduct,
and referred certain personnel to UBS's disciplinary and conduct review
process, which review remains ongoing. As of the date of the
application, employees whose disciplinary review processes have been
concluded and were found responsible for the Conduct had either left
Credit Suisse prior to the identification of the Conduct or were
subsequently terminated by UBS.\11\ As a
[[Page 19748]]
result of the foregoing, the Applicants submit that absent relief, the
prohibitions of section 9(a) as applied to the Covered Persons would be
unduly or disproportionately severe, and that the Conduct did not
constitute conduct that would make it against the public interest or
protection of investors to grant the exemption.
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\11\ For purposes of the application, an employee is deemed
responsible for the Conduct if the person: (i) has been or
subsequently may be identified by any U.S. or non-U.S. regulatory or
enforcement agencies as responsible for the Conduct or (ii) was
found by UBS to have knowingly and directly participated (e.g.,
through their role as a relationship manager and directly
interfacing with clients) in the Conduct post-2014 Plea, upon the
conclusion of UBS's disciplinary and conduct review process. For
purposes of UBS's determination of whether a particular employee is
deemed responsible for the Conduct, this does not include any
employee who did not knowingly participate in the Conduct but may
have been deemed responsible due to failure to follow elements of
corporate compliance policy (e.g., an employee who did not follow-up
on information that may have led to discovery of the misconduct).
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9. Certain of the Applicants and their affiliates have previously
applied for exemptive orders under section 9(c) of the Act, as
described in greater detail in the application.
Applicants' Conditions
Applicants agree that any order granted by the Commission pursuant
to the application will be subject to the following conditions:
1. Any temporary exemption granted pursuant to the application will
be without prejudice to, and will not limit the Commission's rights in
any manner with respect to, any Commission investigation of, or
administrative proceedings involving or against, Covered Persons,
including, without limitation, the consideration by the Commission of a
permanent exemption from section 9(a) of the Act requested pursuant to
the application or the revocation or removal of any temporary
exemptions granted under the Act in connection with the application.
2. Neither the Applicants, UBS AG, nor any of the other Covered
Persons will employ any person who previously has been or who
subsequently may be identified by CSSAG or any U.S. or non-U.S.
regulatory or enforcement agencies as having been responsible for the
Conduct in any capacity without first making a further application to
the Commission pursuant to section 9(c).
3. UBS AG, each Applicant and Covered Person will adopt and
implement policies and procedures reasonably designed to ensure that it
will comply with the terms and conditions of the Orders within 60 days
of such Orders or as such later date as may be contemplated by the
Commission, as applicable.
4. The material terms and conditions of the 2025 Plea Agreement
will be complied with in all material respects.
5. The Applicants will provide written notification to the Chief
Counsel of the Commission's Division of Investment Management with a
copy to the Chief Counsel of the Commission's Division of Enforcement
of a material violation of the terms and conditions of the Orders
within 30 days of discovery of the material violation.
Temporary Order
The Commission has considered the matter and finds that Applicants
have made the necessary showing to justify granting a temporary
exemption.
Accordingly,
It is hereby ordered, pursuant to section 9(c) of the Act, that the
Fund Servicing Applicants and any other Covered Persons are granted a
temporary exemption from the provisions of section 9(a), effective as
the date of this order, solely with respect to the 2025 Plea entered
into pursuant to the 2025 Plea Agreement, subject to the
representations and conditions in the application, until the Commission
takes final action on the Applicants' application for a permanent
order.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-08125 Filed 5-8-25; 8:45 am]
BILLING CODE 8011-01-P
