Group 1 - UBS Group has notified its client managers to suspend the promotion of a complex foreign exchange derivative product called "Range Target Profit Forward" (RTPF) due to significant dollar fluctuations caused by high tariff policies announced by the US government in early April [1][2] - RTPF is a high-risk structured foreign exchange product designed for high-net-worth clients, where clients agree to exchange currencies at a fixed rate as long as the USD/CHF exchange rate remains within a specific range; if the rate exceeds this range, the contract still enforces the exchange, potentially leading to substantial losses for clients [2] - The crisis at UBS is attributed to market volatility triggered by US tariff policies, resulting in rapid depreciation of the dollar and triggering loss conditions for many RTPF contracts, forcing clients to exchange currencies at unfavorable rates, with some clients facing "unpredictable" significant losses [2] Group 2 - In response to the situation, UBS has implemented several measures, including halting the promotion of RTPF to most clients, compensating over 100 clients with "goodwill payments," initiating internal review processes, enhancing employee risk assessment training, and investigating the sales practices of at least six client managers [2] - RTPF products are intended for professional investors and are subject to strict regulations in markets such as the UK, Spain, and several Asian countries; however, some UBS clients lack adequate risk awareness, with instances of clients using mortgage funds for investment [2] - A notable change in client manager behavior has been observed, with managers no longer proactively promoting RTPF products and only providing verbal explanations without any promotional materials [2]

Core Viewpoint - UBS has requested its employees to reduce the sales of complex foreign exchange derivatives, specifically the Range Target Profit Forward (RTPF) contracts, due to significant losses incurred by clients following the announcement of high tariffs by Trump, which caused substantial fluctuations in the US dollar [1][2]. Group 1: Product Overview - RTPF is a structured foreign exchange product designed for high-net-worth clients, where clients agree to exchange currencies at a fixed rate as long as the exchange rate remains within a specified range. If the rate moves outside this range, clients may face substantial losses [2]. - The product is inherently high-risk and should only be sold to professional investors. However, some clients, lacking the necessary expertise, have invested using collateral from their properties, exposing them to significant risks [2]. Group 2: Company Response - Following the losses, UBS has halted the promotion of RTPF to most clients and has compensated over 100 clients to mitigate reputational damage. The company has also initiated an internal review and risk assessment training, scrutinizing the sales practices of at least six client managers [3]. - Although UBS continues to sell RTPF products, the scale of sales has been significantly reduced, and there is now a stricter review process for product suitability [2][3].