New Business Process

1. New Business Process February 2002

2. UBS Warburg New Business Group UBS Warburg New Business Group (NBG) UBS WarburgChief Risk OfficerMark Wallace UBS WarburgChief Credit OfficerIan Drew Global - Admin. Assistant Stacey Tate Stamford x 6728 Global Head of New BusinessJoel ForbesStamford x5978 Regional Head Europe Mana Abedi London x84290 Regional Head Asia Pacific Martin Goodman Sydney x2323 Regional Head Americas Alex Fusco Stamford x5550 Rainer Haeberle Zurich x95870 Paul Nathan London x87306 Jason Hope Tokyo x7330 Jeff See London x77218

3. Applicable Policies • The NBG is primarily concerned with Risk Identification, and ensures adherence to the following policies: • the New Business policy • ensures that all risks are considered and analysed before any new business (or new product or significant change) is undertaken. • requires all relevant support functions to sign off before the business starts. • the Transactions Requiring Pre-Approval (TRPA) policy • ensures that transactions which are large/ complex/ heavily structured/ tax, legal, accounting or regulatory sensitive/ non-vanilla are reviewed by all appropriate support functions before they are executed. • the Special Purpose Vehicles & Client Created Vehicles policy • ensures that appropriate controls are applied to the establishment, maintenance and routing of transactions through SPVs.

4. New Business Policy • New Business: • Entry into a new market, or • Trading within a product class in which UBS Warburg has little or no existing activity.

5. New Business Policy • New Product: • Introduces a risk exposure that is not captured within the existing risk management or risk control framework, or • Requires a new model for its valuation, or • Requires modification to processing systems to accommodate trade input, transaction recording, accounting, or other steps along the trade flow, or • Introduces unique credit, legal, tax, regulatory or reputational considerations, • The definition of a new product includes the opening up of exposure to a new country, new currency or new exchange (including a new exchange traded instrument).

6. New Business Policy • Significant Change: • A material development within an existing business and product range. This would include a significant expansion of the business; a change in the support arrangements for the business; or a widening of the target client base. • Establishment of a new SPV . • Discontinuation or sale of a product line or business, or closure of an office, branch or subsidiary.

7. Transactions Requiring Pre-Approval (TRPA) • Large Transactions • potential loss in excess of CHF 20m • Heavily Structured or Complex Transactions • highly tailored to requirements of a counterparty • involving bespoke models for valuation and risk management • concentration of non financial risk • Corporate Finance code named deals • Tax, Legal, Accounting or Regulatory Sensitive Transactions • Non Vanilla Transactions • non-standard cashflows, terms or conditions • off market pricing • valuation and risk management model not yet approved • not automatically captured in CRC or MRC risk measurement systems • requiring exceptional processing by Operations • non-standard UBS Warburg booking entity or SPV

8. TRPA - Process • It is the responsibility of the business to obtain pre-approval where necessary. • Credit Risk is most often the first point of contact for all transactions requiring pre-approval. • The Credit Officer can identify if a transaction involves credit risk and/or market risk only or if other risk categories are involved. • If other risks are involved, NBG facilitates the approval process. • NBG act as co-ordinators.

9. Further Reading • New Business policy, GMCP 010-001. • Transactions Requiring Pre-Approval policy, GMCP 010-002. • Special Purpose Vehicles and Client Created Vehicles policy, GMCP010‑004. • Policies to be found at: http://bw.ubs.com/cro/rpra/ within Global Market & Credit Risk Policies.