UBS AG - Capital/Financing Update 2011

Filed Pursuant to Rule 424(b)(2) Registration Statement No. 333-156695

CALCULATION OF REGISTRATION FEE

●	●	●
Title of Each Class of Securities Offered	Maximum Aggregate Offering Price	Amount of Registration Fee (1)
Trigger Autocallable Optimization Securities linked to the Energy Select SPDR ® Fund due August 27, 2012	$ 3,388,300.00	$ 393.38
Trigger Autocallable Optimization Securities linked to the iShares ® Russell 2000 ® Index Fund due August 27, 2012	$ 1,150,900.00	$ 133.62
Trigger Autocallable Optimization Securities linked to the Market Vectors ® Gold Miners ETF due August 27, 2012	$ 325,000.00	$ 37.73

(1) Calculated in accordance with Rule 457(r) of the Securities Act of 1933.

PRICING SUPPLEMENT (To Prospectus dated January 13, 2009 and Product Supplement dated January 25, 2011)

UBS AG Trigger Autocallable Optimization Securities

UBS AG $3,388,300 Securities linked to the Energy Select SPDR ® Fund due August 27, 2012 UBS AG $1,150,900 Securities linked to the iShares ® Russell 2000 ® Index Fund due August 27, 2012 UBS AG $325,000 Securities linked to the Market Vectors ® Gold Miners ETF due August 27, 2012

Investment Description

UBS AG Trigger Autocallable Optimization Securities (the Securities) are unsubordinated, unsecured debt securities issued by UBS AG (UBS or the Issuer) linked to the shares of a specific exchange traded fund (the underlying equity). The Securities are designed for investors who believe that the price of the underlying equity will remain flat or increase during the term of the Securities. If the underlying equity closes at or above the initial price on any observation date, UBS will automatically call the Securities and pay you a call price equal to the principal amount per Security plus a call return. The call return increases the longer the Securities are outstanding. If by maturity the Securities have not been called, UBS will either repay the full principal amount or, if the underlying equity closes below the trigger price on the final valuation date, UBS will repay less than the principal amount, if anything, resulting in a loss on your investment that is proportionate to the decline in the price of the underlying equity from the trade date to the final valuation date. Investing in the Securities involves significant risks. The Securities do not pay interest. You may lose some or all of your principal amount. The contingent repayment of principal only applies if you hold the Securities to maturity. Any payment on the Securities, including any repayment of principal, is subject to the creditworthiness of the Issuer. If UBS were to default on its payment obligations you may not receive any amounts owed to you under the Securities and you could lose your entire investment.

Features

o Call Return UBS will automatically call the Securities for a call price equal to the principal amount plus a call return if the closing price of the underlying equity on any observation date is equal to or greater than the initial price. The call return increases the longer the Securities are outstanding. If the Securities are not called, investors will have the potential for downside equity market risk at maturity.

o Contingent Repayment of Principal Amount at Maturity If by maturity the Securities have not been called and the price of the underlying equity does not close below the trigger price on the final valuation date, UBS will pay you the principal amount per Security at maturity. If the price of the underlying equity closes below the trigger price on the final valuation date, UBS will repay less than the principal amount, if anything, resulting in a loss on your investment that is proportionate to the decline in the price of the underlying equity from the trade date to the final valuation date. The contingent repayment of principal only applies if you hold the Securities until maturity. Any payment on the Securities, including any repayment of principal, is subject to the creditworthiness of UBS.

Key Dates

●	●
Trade Date	August 19, 2011
Settlement Date	August 24, 2011
Observation Dates*	Quarterly (see page 3)
Final Valuation Date*	August 21, 2012
Maturity Date*	August 27, 2012

Subject to postponement in the event of a market disruption event, as described in the TAOS product supplement.

NOTICE TO INVESTORS: THE SECURITIES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL DEBT INSTRUMENTS. THE ISSUER IS NOT NECESSARILY OBLIGATED TO REPAY THE FULL PRINCIPAL AMOUNT OF THE SECURITIES AT MATURITY, AND THE SECURITIES CAN HAVE DOWNSIDE MARKET RISK SIMILAR TO THE UNDERLYING EQUITY. THIS MARKET RISK IS IN ADDITION TO THE CREDIT RISK INHERENT IN PURCHASING A DEBT OBLIGATION OF UBS. YOU SHOULD NOT PURCHASE THE SECURITIES IF YOU DO NOT UNDERSTAND OR ARE NOT COMFORTABLE WITH THE SIGNIFICANT RISKS INVOLVED IN INVESTING IN THE SECURITIES.

YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER KEY RISKS BEGINNING ON PAGE 4 AND UNDER RISK FACTORS BEGINNING ON PAGE PS-13 OF THE TRIGGER AUTOCALLABLE OPTIMIZATION SECURITIES PRODUCT SUPPLEMENT BEFORE PURCHASING ANY SECURITIES. EVENTS RELATING TO ANY OF THOSE RISKS, OR OTHER RISKS AND UNCERTAINTIES, COULD ADVERSELY EFFECT THE MARKET VALUE OF, AND THE RETURN ON, YOUR SECURITIES. YOU MAY LOSE SOME OR ALL OF YOUR INITIAL INVESTMENT IN THE SECURITIES.

Security Offerings

These terms relate to three separate Securities we are offering. Each of the three Securities is linked to the shares of a different exchange traded fund and each of the three Securities has a different call return rate, initial price and trigger price. Each of the Securities are offered at a minimum investment of 100 Securities at $10.00 per Security (representing a $1,000 investment) and integral multiples of $10.00 in excess thereof. The performance of each Security will not depend on the performance of any other Security.

●	●	●	●	●	●	●
Underlying Equities	Ticker	Call Return Rate	Initial Price	Trigger Price	CUSIP	ISIN
Energy Select SPDR ® Fund	XLE	20.50% per annum*	$63.24	$47.43, which is 75% of the Initial Price	90268C408	US90268C4087
iShares ® Russell 2000 ® Index Fund	IWM	22.50% per annum*	$65.24	$48.93, which is 75% of the Initial Price	90268C424	US90268C4244
Market Vectors ® Gold Miners ETF	GDX	23.75% per annum*	$61.27	$45.95, which is 75% of the Initial Price	90268C416	US90268C4160

If the Securities are called, your call return will vary depending on the observation date on which the Securities are called.

See Additional Information about UBS and the Securities on page 2. The Securities will have the terms set forth in the Trigger Autocallable Optimization Securities (TAOS) product supplement relating to the Securities, dated January 25, 2011, the accompanying prospectus and this pricing supplement.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these Securities or passed upon the adequacy or accuracy of this pricing supplement, or the accompanying product supplement or prospectus. Any representation to the contrary is a criminal offense. The Securities are not deposit liabilities of UBS and are not FDIC insured.

●	●	●	●	●	●	●
Offering of Securities	Issue Price to Public		Underwriting Discount		Proceeds to UBS
	Total	Per Security	Total	Per Security	Total	Per Security
Securities linked to the Energy Select SPDR ® Fund	$3,388,300.00	$ 10.00	$50,824.50	$0.15	$3,337,475.50	$9.85
Securities linked to the iShares ® Russell 2000 ® Index Fund	$1,150,900.00	$10.00	$17,263.50	$0.15	$1,133,636.50	$9.85
Securities linked to the Market Vectors ® Gold Miners ETF	$325,000.00	$10.00	$4,875.00	$0.15	$320,125.00	$9.85

UBS Financial Services Inc. UBS Investment Bank

Pricing Supplement dated August 19, 2011

Additional Information about UBS and the Securities

UBS has filed a registration statement (including a prospectus, as supplemented by a product supplement for the securities we may offer, including the Securities) with the Securities and Exchange Commission, or SEC, for the offerings to which this pricing supplement relates. Before you invest, you should read these documents and any other documents relating to the Securities that UBS has filed with the SEC for more complete information about UBS and these offerings. You may obtain these documents for free from the SEC website at www.sec.gov. Our Central Index Key, or CIK, on the SEC website is 0001114446. Alternatively, UBS will arrange to send you these documents if you so request by calling toll-free 800-722-7370.

You may access these documents on the SEC website at www.sec.gov as follows:

¨ TAOS product supplement dated January 25, 2011:

http://www.sec.gov/Archives/edgar/data/1114446/000139340111000037/c207666_690583-424b2.htm

¨ Prospectus dated January 13, 2009:

http://www.sec.gov/Archives/edgar/data/1114446/000095012309000556/y73628b2e424b2.htm

References to UBS, we, our and us refer only to UBS AG and not to its consolidated subsidiaries. In this document, Trigger Autocallable Optimization Securities or the Securities refer to three different Securities that are offered hereby. Also, references to the TAOS product supplement mean the UBS product supplement, dated January 25, 2011, and references to accompanying prospectus mean the UBS prospectus titled, Debt Securities and Warrants, dated January 13, 2009.

Investor Suitability

The Securities may be suitable for you if:

¨ You fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial investment.

¨ You can tolerate a loss of all or a substantial portion of your investment and are willing to make an investment that may have the same downside market risk as an investment in the underlying equity.

¨ You believe the underlying equity will close at or above the initial price on one of the specified observation dates.

¨ You understand and accept that you will not participate in any appreciation in the price of the underlying equity and that your potential return is limited to the applicable call return.

¨ You can tolerate fluctuations in the price of the Securities prior to maturity that may be similar to or exceed the downside price fluctuations of the underlying equity.

¨ You are willing to invest in the Securities based on the applicable call return rate indicated on the cover hereof.

¨ You do not seek current income from this investment and are willing to forgo dividends paid on the underlying equity.

¨ You are willing to invest in securities that may be called early and you are otherwise willing to hold such securities to maturity, a term of approximately 12 months, and accept that there may be little or no secondary market for the Securities.

¨ You are willing to assume the credit risk of UBS for all payments under the Securities, and understand that if UBS defaults on its obligations you may not receive any amounts due to you, including any repayment of principal.

The Securities may not be suitable for you if:

¨ You do not fully understand the risks inherent in an investment in the Securities, including the risk of loss of your entire initial investment.

¨ You cannot tolerate a loss of all or a substantial portion of your investment and are unwilling to make an investment that may have the same downside market risk as an investment in the underlying equity.

¨ You require an investment designed to provide a full return of principal at maturity.

¨ You believe that the price of the underlying equity will decline during the term of the Securities and is likely to close below the trigger price on the final valuation date.

¨ You seek an investment that participates in the full appreciation in the price of the underlying equity or that has unlimited return potential.

¨ You cannot tolerate fluctuations in the price of the Securities prior to maturity that may be similar to or exceed the downside price fluctuations of the underlying equity.

¨ You are unwilling to invest in the Securities based on the applicable call return rate indicated on the cover hereof.

¨ You seek current income from this investment or prefer to receive the dividends paid on the underlying equity.

¨ You are unable or unwilling to hold securities that may be called early, or you are otherwise unable or unwilling to hold such securities to maturity, a term of approximately 12 months, or you seek an investment for which there will be an active secondary market.

¨ You are not willing to assume the credit risk of UBS for all payments under the Securities, including any repayment of principal.

The suitability considerations identified above are not exhaustive. Whether or not the Securities are a suitable investment for you will depend on your individual circumstances and you should reach an investment decision only after you and your investment, legal, tax, accounting and other advisors have carefully considered the suitability of an investment in the Securities in light of your particular circumstances. You should also review carefully the ``Key Risks beginning on page 5 of this pricing supplement for risks related to an investment in the Securities.

Final Terms for Each Offering of the Securities

●	●
Issuer	UBS AG, London Branch
Principal Amount	$10.00 per Security (subject to a minimum investment of 100 Securities)
Term (1)	Approximately 12 months, unless called earlier.
Underlying Equities	The shares of a specific exchange traded fund, as indicated on the first page of this pricing supplement.
Call Feature	The Securities will be called if the closing price of the underlying equity on any observation date is equal to or greater than the initial price. If the Securities are called, UBS will pay you on the applicable call settlement date a cash payment per Security equal to the call price for the applicable observation date.
Call Settlement Dates	Two business days following each observation date, except that the call settlement date for the final valuation date is the maturity date.
Call Return	The call return increases the longer the Securities are outstanding and is based upon a rate of (i) 20.50% per annum for Securities linked to the Energy Select SPDR ® Fund, (ii) 22.50% per annum for Securities linked to the iShares ® Russell 2000 ® Index Fund and (iii) 23.75% per annum for Securities linked to the Market Vectors ® Gold Miners ETF.
Call Price	The call price equals the principal amount per Security plus the applicable call return.

The table below reflects a call return rate of 20.50% per annum for Securities linked to the Energy Select SPDR ® Fund. Amounts below may have been rounded for ease of reference.

●	●	●	●
Observation Date (1)	Call Settlement Date	Call Return	Call Price (per Security)
November 21, 2011	November 23, 2011	5.1250%	$10.5125
February 21, 2012	February 23, 2012	10.2500%	$11.0250
May 21, 2012	May 23, 2012	15.3750%	$11.5375
August 21, 2012	August 27, 2012	20.5000%	$12.0500

The table below reflects a call return rate of 22.50% per annum for Securities linked to the iShares ® Russell 2000 Index Fund. Amounts below may have been rounded for ease of reference.

●	●	●	●
Observation Date (1)	Call Settlement Date	Call Return	Call Price (per Security)
November 21, 2011	November 23, 2011	5.6250%	$10.5625
February 21, 2012	February 23, 2012	11.2500%	$11.1250
May 21, 2012	May 23, 2012	16.8750%	$11.6875
August 21, 2012	August 27, 2012	22.5000%	$12.2500

The table below reflects a call return rate of 23.75% per annum for Securities linked to the Market Vectors ® Gold Miners ETF. Amounts below may have been rounded for ease of reference.

●	●	●	●
Observation Date (1)	Call Settlement Date	Call Return	Call Price (per Security)
November 21, 2011	November 23, 2011	5.9380%	$10.5938
February 21, 2012	February 23, 2012	11.8750%	$11.1875
May 21, 2012	May 23, 2012	17.8130%	$11.7813
August 21, 2012	August 27, 2012	23.7500%	$12.3750

●	●
Payment at Maturity (per Security)	If the Securities have not been called and the final price is equal to or greater than the trigger price , at maturity we will pay you an amount in cash equal to the principal amount: $10.00.
	If the Securities have not been called and the final price is less than the trigger price , at maturity we will pay you an amount in cash that is less than the principal amount, if anything, resulting in a loss that is proportionate to the decline of the underlying equity, for an amount equal to: $10.00 + ($10.00 × underlying return).

●	●
Underlying Return	Final Price Initial Price Initial Price
Trigger Price	A percentage of the initial price, as specified on the first page of this pricing supplement (as may be adjusted in the case of certain adjustment events as described under General Terms of the Securities Antidilution Adjustments in the TAOS product supplement).
Initial Price	The closing price of the underlying equity on the trade date, as specified on the first page of this pricing supplement (as may be adjusted in the case of certain adjustment events as described under General Terms of the Securities Antidilution Adjustments in the TAOS product supplement).
Final Price	The closing price of the underlying equity on the final valuation date.

(1) Subject to the market disruption event provisions set forth in the TAOS product supplement beginning on page PS-29.

Investment Timeline

INVESTING IN THE SECURITIES INVOLVES SIGNIFICANT RISKS. YOU MAY LOSE SOME OR ALL OF YOUR PRINCIPAL AMOUNT. ANY PAYMENT ON THE SECURITIES, INCLUDING ANY REPAYMENT OF PRINCIPAL, IS SUBJECT TO THE CREDITWORTHINESS OF UBS. IF UBS WERE TO DEFAULT ON ITS PAYMENT OBLIGATIONS, YOU MAY NOT RECEIVE ANY AMOUNTS OWED TO YOU UNDER THE SECURITIES AND YOU COULD LOSE YOUR ENTIRE INVESTMENT.

Key Risks

An investment in any offering of the Securities involves significant risks. Investing in each of the Securities is not equivalent to investing in each of the underlying equities. These risks are explained in more detail in the Risk Factors section of the TAOS product supplement. We also urge you to consult your investment, legal, tax, accounting and other advisors before you invest in the Securities.

¨ Risk of loss at maturity The Securities differ from ordinary debt securities in that the issuer will not necessarily pay the full principal amount of the Securities. If the Securities are not called, UBS will repay you the principal amount of your Securities in cash only if the final price of the underlying equity is greater than or equal to the trigger price and will only make such payment at maturity. If the Securities are not called and the final price is less than the trigger price, you will lose some or all of your initial investment in an amount proportionate to the decline in the price of the underlying equity.

¨ The contingent repayment of principal applies only at maturity You should be willing to hold your Securities to maturity. If you are able to sell your Securities prior to maturity in the secondary market, you may have to sell them at a loss relative to your initial investment even if the price of the underlying equity is above the trigger price.

¨ Your potential return on the Securities is limited to the call return The return potential of the Securities is limited to the call return regardless of the appreciation of the underlying equity. In addition, because the call return increases the longer the Securities have been outstanding, the call price payable on earlier observation dates is less than the call price payable on later observation dates. The earlier a Security is called, the lower your return will be. If the Securities are not called, you will not participate in any appreciation in the price of the underlying equity even though you will be subject to the risk of a decline in the price of the underlying equity.

¨ Higher call return rates are generally associated with a greater risk of loss Greater expected volatility with respect to the underlying equity reflects a higher expectation as of the trade date that the price of such equity could close below its trigger price on the final valuation date of the Securities. This greater expected risk will generally be reflected in a higher call return rate for that Security. However, while the call return rate is set on the trade date, an equitys volatility can change significantly over the term of the Securities. The price of the underlying equity for your Securities could fall sharply, which could result in a significant loss of principal.

¨ No interest payments UBS will not pay any interest with respect to the Securities.

¨ Reinvestment risk If your Securities are called early, the term of the Securities will be reduced and you will not receive any payment on the Securities after the applicable call settlement date. There is no guarantee that you would be able to reinvest the proceeds from an automatic call of the Securities at a comparable rate of return for a similar level of risk. To the extent you are able to reinvest such proceeds in an investment comparable to the Securities, you may incur transaction costs such as dealer discounts and hedging costs built into the price of the new securities. Because the Securities may be called as early as one quarter after issuance, you should be prepared in the event the Securities are called early.

¨ Credit risk of UBS The Securities are unsubordinated, unsecured debt obligations of the Issuer, UBS, and are not, either directly or indirectly, an obligation of any third party. Any payment to be made on the Securities, including payments in respect of an automatic call or any repayment of principal, depends on the ability of UBS to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of UBS may affect the market value of the Securities and, in the event UBS were to default on its obligations, you may not receive any amounts owed to you under the terms of the Securities and you could lose your entire initial investment.

¨ Market risk The price of the underlying equity can rise or fall sharply due to factors specific to that underlying equity or the securities constituting the assets of the underlying equity. These factors may include price volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general market volatility and levels, interest rates and economic and political conditions. We urge you to review financial and other information filed periodically by the underlying equity with the SEC.

¨ Owning the Securities is not the same as owning the underlying equity The return on your Securities is unlikely to reflect the return you would realize if you actually owned the underlying equity. For instance, you will not receive or be entitled to receive any dividend payments or other distributions on the underlying equity during the term of your Securities. As an owner of the Securities, you will not have voting rights or any other rights that holders of the underlying equity may have. Furthermore, the underlying equity may appreciate substantially during the term of the Securities and you will not participate in such appreciation.

¨ No assurance that the investment view implicit in the Securities will be successful It is impossible to predict whether the price of the underlying equity will rise or fall. The closing price of the underlying equity will be influenced by complex and interrelated political, economic, financial and other factors that affect the underlying equity. You should be willing to accept the downside risks of owning equities in general and the underlying equity in particular, and to assume the risk that, if the Securities are not automatically called, you will not receive any positive return on your Securities and you may lose some or all of your initial investment.

¨ The calculation agent can make adjustments that affect the payment to you at maturity For certain corporate events affecting the underlying equity, the calculation agent may make adjustments to the initial price or trigger price. However, the calculation agent will not make an adjustment in response to all events that could affect the underlying equity. If an event occurs that does not require the calculation agent to make an adjustment, the value of the Securities may be materially and adversely affected. In addition, all determinations and calculations concerning any such adjustments will be made by the calculation agent. You should be aware that the calculation agent may make any such adjustment, determination or calculation in a manner that differs from that discussed in the product supplement as necessary to achieve an equitable result. Following a delisting or discontinuance of the underlying equity, the amount you receive at maturity may be based on a share of another exchange traded fund. The occurrence of these events and the consequent adjustments may materially and adversely affect the value of the Securities. For more information, see the section General Terms of the Securities Antidilution Adjustments and General Terms of the Securities Delisting, Discontinuance or Modification of an ETF in the product supplement. Regardless of any of the events discussed above, any payment on the Securities is subject to the creditworthiness of UBS.

¨ The value of the underlying equity may not completely track the value of the securities in which such exchange traded fund invests Although the trading characteristics and valuations of the underlying equity will usually mirror the characteristics and valuations of the securities in which such exchange traded fund invests, its value may not completely track the value of such securities. The value of the underlying equity will reflect transaction costs and fees that the securities in which that exchange traded fund invests do not have. In addition, although the underlying equity may be currently listed for trading on an exchange, there is no assurance that an active trading market will continue for such underlying equity or that there will be liquidity in the trading market.

¨ Fluctuation of NAV The net asset value (the NAV) of an exchange traded fund may fluctuate with changes in the market value of such exchange traded funds securities holdings. The market prices of the underlying equity may fluctuate in accordance with changes in NAV and supply and demand on the applicable stock exchanges. In addition, the market price of the underlying equity may differ from its NAV per share; the underlying equity may trade at, above or below its NAV per share.

¨ Failure of the underlying equity to track the level of the underlying index While the underlying equity is designed and intended to track the level of a specific index (an ``underlying index), various factors, including fees and other transaction costs, will prevent the underlying equity from correlating exactly with changes in the level of such underlying index. Accordingly, the performance of the underlying equity will not be equal to the performance of its underlying index during the term of the Securities.

¨ The shares of the companies held by the Energy Select Sector SPDR ® Fund (the XLE Fund) are linked to the performance of the energy sector, and adverse conditions in the energy sector may reduce your return on the Securities All or substantially all of the equity securities tracked by the XLE Fund are issued by companies whose primary lines of business are directly associated with the energy sector. The profitability and stock prices of energy sector companies are affected by supply and demand both in their specific product or service and for energy products in general. The price of oil and gas, exploration and production spending will likewise affect the performance of energy companies. In addition, securities of companies in the energy field are subject to swift price and supply fluctuations caused by events relating to energy conservation and the success of exploration projects. Weak demand for energy companies products or services or for energy products and services in general, as well as negative developments in other areas, would adversely impact the shares of companies held by the XLE Fund. As a result of these factors, the value of the Securities linked to the XLE Fund may be subject to greater volatility and be more adversely affected by economic, political, or regulatory events relating to the energy sector.

¨ The XLE Fund utilizes a passive indexing investment approach The XLE Fund is not managed according to traditional methods of active investment management, which involve the buying and selling of securities based on economic, financial and market analysis and investment judgment. Instead, the underlying equity, utilizing a passive or indexing investment approach, attempts to approximate the investment performance of its underlying index by investing in a portfolio of stocks that generally replicate such underlying index. Therefore, unless a specific stock is removed from the underlying index, the XLE Fund generally would not sell a stock because the stocks issuer was in financial trouble. In addition, the XLE Fund is subject to the risk that the investment strategy of the XLE Funds investment adviser may not produce the intended results.

¨ There are risks associated with investments in securities with concentration in the gold and silver mining industry The stocks comprising the NYSE Arca Gold Miners Index and that are generally tracked by the Market Vectors ® Gold Miners ETF (the GDX Fund) are stocks of companies primarily engaged in the mining of gold or silver. The shares of the GDX Fund may be subject to increased price volatility as they are linked to a single industry, market or sector and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that industry, market or sector. Because the GDX Fund primarily invests in stocks and ADRs of companies that are involved in the gold mining industry, and to a lesser extent the silver mining industry, the shares of the GDX Fund, and the value of Securities linked to the GDX Fund, are subject to certain risks associated with such companies. Gold mining companies are highly dependent on the price of gold and subject to competition pressures that may have a significant effect on their financial condition. Gold prices are subject to volatile price movements over short periods of time and are affected by numerous factors. These include economic factors, including, among other things, the structure of and confidence in the global monetary system, expectations of the future rate of inflation, the relative strength of, and confidence in, the U.S. dollar (the currency in which the price of gold is generally quoted), interest rates and gold borrowing and lending rates, and global or regional economic, financial, political, regulatory, judicial or other events. Gold prices may also be affected by industry factors such as industrial and jewelry demand, lending, sales and purchases of gold by

the official sector, including central banks and other governmental agencies and multilateral institutions which hold gold, levels of gold production and production costs, and short-term changes in supply and demand because of trading activities in the gold market.

Silver mining companies are highly dependent on the price of silver. Silver prices can fluctuate widely and may be affected by numerous factors. These include general economic trends, technical developments, substitution issues and regulation, as well as specific factors including industrial and jewelry demand, expectations with respect to the rate of inflation, the relative strength of the U.S. dollar (the currency in which the price of silver is generally quoted) and other currencies, interest rates, central bank sales, forward sales by producers, global or regional political or economic events, and production costs and disruptions in major silver producing countries.

¨ The GDX Fund does not measure the performance of gold bullion The GDX Fund measures the performance of shares of gold and silver mining companies and not gold bullion. Therefore the GDX Fund may under- or over-perform gold bullion over the short-term or the long-term.

¨ There may be little or no secondary market The Securities will not be listed or displayed on any securities exchange or any electronic communications network. There can be no assurance that a secondary market for the Securities will develop. UBS Securities LLC and other affiliates of UBS may make a market in each offering of the Securities, although they are not required to do so and may stop making a market at any time. If you are able to sell your Securities prior to maturity, you may have to sell them at a substantial loss.

¨ Price of Securities prior to maturity The market price of the Securities will be influenced by many unpredictable and interrelated factors, including the price of the underlying equity; the volatility of the underlying equity; the dividend rate paid on the underlying equity; the time remaining to the maturity of the Securities; interest rates in the markets; geopolitical conditions and economic, financial, political and regulatory or judicial events; and the creditworthiness of UBS.

¨ Impact of fees on secondary market prices Generally, the price of the Securities in the secondary market is likely to be lower than the initial price to public since the initial price to public included, and the secondary market prices are likely to exclude, commissions, hedging costs or other compensation paid with respect to the Securities.

¨ Potential UBS impact on price Trading or transactions by UBS or its affiliates in the underlying equity and/or over-the-counter options, futures or other instruments with returns linked to the performance of the underlying equity may adversely affect the performance and, therefore, the market value of the Securities.

¨ Potential conflict of interest UBS and its affiliates may engage in business with the issuer of the underlying equity, which may present a conflict between the obligations of UBS and you, as a holder of the Securities. There are also potential conflicts of interest between you and the calculation agent, which will be an affiliate of UBS.

¨ Potentially inconsistent research, opinions or recommendations by UBS UBS and its affiliates publish research from time to time on financial markets and other matters that may influence the value of the Securities, or express opinions or provide recommendations that are inconsistent with purchasing or holding the Securities. Any research, opinions or recommendations expressed by UBS or its affiliates may not be consistent with each other and may be modified from time to time without notice. Investors should make their own independent investigation of the merits of investing in the Securities and the underlying equity to which the Securities are linked.

¨ Dealer incentives UBS and its affiliates act in various capacities with respect to the Securities. We and our affiliates may act as a principal, agent or dealer in connection with the sale of the Securities. Such affiliates, including the sales representatives, will derive compensation from the distribution of the Securities and such compensation may serve as an incentive to sell these Securities instead of other investments. We will pay total underwriting compensation of $0.15 per Security to any of our affiliates acting as agents or dealers in connection with the distribution of the Securities.

¨ Uncertain tax treatment Significant aspects of the tax treatment of the Securities are uncertain. You should consult your own tax advisor about your tax situation.

Hypothetical Examples

The examples below illustrate the payment upon a call or at maturity for a $10.00 Security on a hypothetical offering of the Securities, with the following assumptions (the actual terms for each Security are specified on the first page of this pricing supplement; amounts have been rounded for ease of reference):

●	●
Principal Amount:	$10.00
Term:	12 months
Initial Price:	$65.00
Call Return Rate:	22.00% per annum (or 5.50% per quarterly period)
Observation Dates:	Quarterly
Trigger Price:	$48.75 (which is 75% of the Initial Price)

Example 1 Securities are Called on the First Observation Date

●	●
Closing Price at first Observation Date:	$70.00 (at or above Initial Price, Securities are called)
Call Price (per Security):	$10.55

Since the Securities are called on the first observation date, UBS will pay you on the call settlement date a total call price of $10.55 per $10.00 principal amount (5.50% return on the Securities).

Example 2 Securities are Called on the Final Valuation Date

●	●
Closing Price at first Observation Date:	$60.00 (below Initial Price, Securities NOT called)
Closing Price at second Observation Date:	$55.00 (below Initial Price, Securities NOT called)
Closing Price at third Observation Date:	$60.00 (below Initial Price, Securities NOT called)
Closing Price at Final Valuation Date:	$70.00 (at or above Initial Price, Securities are called)
Call Price (per Security):	$12.20

Since the Securities are called on the final valuation date, UBS will pay you on the call settlement date (which coincides with the maturity date in this example) a total call price of $12.20 per $10.00 principal amount (22.00% return on the Securities).

Example 3 Securities are NOT Called and the Final Price is above the Trigger Price

●	●
Closing Price at first Observation Date:	$60.00 (below Initial Price, Securities NOT called)
Closing Price at second Observation Date:	$55.00 (below Initial Price, Securities NOT called)
Closing Price at third Observation Date:	$60.00 (below Initial Price, Securities NOT called)
Closing Price at Final Valuation Date:	$50.00 (below Initial Price, but above Trigger Price, Securities NOT called)
Settlement Amount (per Security):	$10.00

Since the Securities are not called and the final price is above or equal to the trigger price, at maturity UBS will pay you a total of $10.00 per $10.00 principal amount (a zero percent return on the Securities).

Example 4 Securities are NOT Called and the Final Price is below the Trigger Price

●	●
Closing Price at first Observation Date:	$60.00 (below Initial Price, Securities NOT called)
Closing Price at second Observation Date:	$55.00 (below Initial Price, Securities NOT called)
Closing Price at third Observation Date:	$45.00 (below Initial Price and Trigger Price, Securities NOT called)
Closing Price at Final Valuation Date:	$32.50 (below Initial Price and Trigger Price, Securities NOT called)
Settlement Amount (per Security):	$10.00 + ($10 × Underlying Return) $10.00 + ($10 × -50%) $10.00 - $5.00 $5.00

Since the Securities are not called and the final price is below the trigger price, at maturity UBS will pay you a total of $5.00 per $10.00 principal amount (a 50% loss on the Securities).

Information about the Underlying Equities

All disclosures contained in this pricing supplement regarding each underlying equity are derived from publicly available information. Neither UBS nor any of its affiliates assumes any responsibilities for the adequacy or accuracy of information about any underlying equity contained in this pricing supplement. You should make your own investigation into each underlying equity.

Included on the following pages is a brief description of each underlying equity. This information has been obtained from publicly available sources. Set forth below is a table that provides the quarterly high and low closing prices for each underlying equity. The information given below is for the four calendar quarters in each of 2007, 2008, 2009 and 2010 and the first and second calendar quarters of 2011. Partial data is provided for the third calendar quarter of 2011. We obtained the closing price information set forth below from the Bloomberg Professional service (Bloomberg) without independent verification. You should not take the historical prices of each underlying equity as an indication of future performance.

Each of the underlying equities are registered under the Securities Exchange Act of 1934 (the Exchange Act). Companies with securities registered under the Exchange Act are required to file financial and other information specified by the SEC periodically. Information filed by each underlying equity with the SEC can be reviewed electronically through a website maintained by the SEC. The address of the SECs website is http://www.sec.gov. Information filed with the SEC by each underlying equity issuer under the Exchange Act can be located by reference to its SEC file number provided below. In addition, information filed with the SEC can be inspected and copied at the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of this material can also be obtained from the Public Reference Section, at prescribed rates.

Energy Select Sector SPDR ® Fund

We have derived all information regarding the Energy Select Sector SPDR ® Fund (XLE Fund) contained in this pricing supplement from publicly available information. Such information reflects the policies of, and is subject to changes by SSgA Funds Management, Inc. the adviser of XLE Fund. We make no representations or warranty as to the accuracy or completeness of the information derived from these public sources.

The XLE Fund is one of nine separate investment portfolios (each, a Select Sector Fund) that constitute the Select Sector SPDR Trust. Each Select Sector SPDR Fund is an index fund that invests in a particular sector or group of industries represented by a specified Select Sector Index. The companies included in each Select Sector Index are selected on the basis of general industry classification from a universe of companies defined by the S&P 500 ® Index (S&P 500). The nine Select Sector Indexes upon which the Select Sector Funds are based together comprise all of the companies in the S&P 500. The XLE Fund seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Energy Select Sector Index.

The Energy Select Sector Index includes companies from the following industries: oil, gas & consumable fuels and energy equipment & services. Energy companies in the Energy Select Sector Index develop and produce crude oil and natural gas and provide drilling and other energy resources production and distribution related services. The Energy Select Sector Index is one of nine Select Sector Indexes developed and maintained in accordance with the following criteria: (1) each of the component securities in a Select Sector Index is a constituent company of the S&P 500 Index; (2) each stock in the S&P 500 Index is allocated to one and only one of the Select Sector Indexes; and (3) each Select Sector Index is calculated by the New York Stock Exchanges Index Services Group using a modified market capitalization methodology.

In seeking to track the performance of the Energy Select Sector Index, the XLE Fund employs a replication strategy, which means that the XLE Fund typically invests in substantially all of the securities represented in the Energy Select Sector Index in approximately the same proportions as the Energy Select Sector Index. Under normal market conditions, the XLE Fund generally invests substantially all, but at least 95%, of its total assets in the securities comprising the Energy Select Sector Index.

As of August 18, 2011, ordinary operating expenses of the XLE Fund are expected accrue at an annual rate of 0.20% of the XLE Funds daily net asset value. Expenses of the XLE Fund reduce the net value of the assets held by the XLE Fund and, therefore, reduce the value of each share of the XLE Fund. As of August 18, 2011, the Energy SPDR Funds five largest company holdings include: Exxon Mobil Corp. (17.63%), Chevron Corp. (14.31%), Schlumberger Ltd. (7.88%), ConocoPhillips (4.98%) and Occidental Petroleum Corp (4.39%).

Information filed by the Select Sector SPDR Trust with the SEC under the Securities Exchange Act and the Investment Company Act can be found by reference to its SEC file number: 001-14647 and 811-08837. The XLE Funds website is https://www.spdrs.com/product/fund.seam?ticker=XLE. Shares of the XLE Fund are listed on the NYSE Arca under ticker symbol ``XLE. Information from outside sources is not incorporated by reference in, and should not be considered part of, this pricing supplement or any accompanying prospectus. We make no representation or warranty as to the accuracy or completeness of the information contained in outside sources.

Historical Information

The following table sets forth the quarterly high and low closing prices for the XLE Fund, based on daily closing prices as reported by Bloomberg. The closing price of the XLE Fund on August 19, 2011 was $63.24. Past performance of the XLE Fund is not indicative of the future performance of the XLE Fund.

●	●	●	●	●
Quarter Begin	Quarter End	Quarterly High	Quarterly Low	Quarterly Close
1/3/2007	3/30/2007	$61.00	$54.05	$60.24
4/2/2007	6/29/2007	$71.10	$60.87	$69.05
7/2/2007	9/28/2007	$75.70	$65.05	$74.94
10/1/2007	12/31/2007	$80.40	$71.16	$79.22
1/2/2008	3/31/2008	$80.40	$67.27	$73.80
4/1/2008	6/30/2008	$90.25	$75.10	$88.36
7/1/2008	9/30/2008	$88.97	$61.65	$63.77
10/1/2008	12/31/2008	$62.36	$40.00	$47.84
1/2/2009	3/31/2009	$51.95	$38.12	$42.46
4/1/2009	6/30/2009	$53.95	$43.36	$48.07
7/1/2009	9/30/2009	$55.89	$44.52	$53.92
10/1/2009	12/31/2009	$59.76	$51.97	$57.01
1/4/2010	3/31/2010	$60.30	$53.74	$57.52
4/1/2010	6/30/2010	$62.07	$49.68	$49.68
7/1/2010	9/30/2010	$56.31	$49.38	$56.06
10/1/2010	12/31/2010	$68.25	$56.11	$68.25
1/3/2011	3/31/2011	$80.01	$67.78	$79.81
4/1/2011	6/30/2011	$80.44	$70.99	$75.35
7/1/2011*	8/19/2011*	$79.79	$62.33	$63.24

As of the date of this pricing supplement, available information for the third calendar quarter of 2011 includes data for the period from July 1, 2011 through August 19, 2011. Accordingly, the Quarterly High, Quarterly Low and Quarterly Close data indicated are for this shortened period only and do not reflect complete data for the third calendar quarter of 2011.

The graph below illustrates performance of the XLE Fund from August 20, 2002 through August 19, 2011, based on information from Bloomberg. The dotted line represents the trigger price of $47.43, which is equal to 75% of the closing price on August 19, 2011. Past performance of the XLE Fund is not indicative of the future performance of the XLE Fund.

iShares ® Russell 2000 ® Index Fund

We have derived all information regarding the iShares ® Russell 2000 ® Index Fund (IWM Fund) contained in this pricing supplement from publicly available information. Such information reflects the policies of, and is subject to changes by BlackRock Fund Advisors (BFA), the investment manager of the IWM Fund, a wholly-owned subsidiary of BlackRock Institutional Trust Company, N.A., which in turn is a majority-owned subsidiary of BlackRock, Inc. We make no representations or warranty as to the accuracy or completeness of the information derived from these public sources.

The IWM Fund is one of the one hundred and forty-five separate investment portfolios that constitute the iShares Trust. The IWM Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses of the Russell 2000 Index (the Russell 2000). The Russell 2000 measures the performance of the small-capitalization sector of the U.S. equity market and is provided by Russell Investment Group, an organization that is independent of the IWM Fund and BFA. The Russell Investment Group is under no obligation to continue to publish, and may discontinue or suspend the publication of the Russell 2000 at any time.

The Russell 2000 is a float-adjusted capitalization-weighted index of equity securities issued by the approximately 2,000 smallest issuers in the Russell 3000 Index. The IWM Fund invests in a representative sample of securities included in the Russell 2000 that collectively has an investment profile similar to the Index. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability and yield), and liquidity measures similar to those of the Russell 2000. Due to the use of representative sampling, the IWM Fund may or may not hold all of the securities that are included in the Russell 2000.

As of August 18, 2011, ordinary operating expenses of the IWM Fund are expected to accrue at an annual rate of 0.26% of the IWM Funds daily net asset value. Expenses of the IWM Fund reduce the net asset value of the assets held by the IWM Fund and, therefore, reduce the value of the shares of the IWM Fund.

Information filed by iShares Trust with the SEC under the Securities Exchange Act and the Investment Company Act can be found by reference to its SEC file number: 001-15897 and 811-09729. IWM Funds website is http://us.ishares.com/product_info/fund/overview/IWM.htm. Shares of the IWM Fund are listed on the NYSE Arca under ticker symbol IWM. Information from outside sources is not incorporated by reference in, and should not be considered part of, this pricing supplement or any accompanying prospectus. We make no representation or warranty as to the accuracy or completeness of the information contained in outside sources.

Historical Information

The following table sets forth the quarterly high and low closing prices for the IWM Fund, based on daily closing prices as reported by Bloomberg. The closing price of the IWM Fund on August 19, 2011 was $65.24. Past performance of the IWM Fund is not indicative of the future performance of the IWM Fund.

●	●	●	●	●
Quarter Begin	Quarter End	Quarterly High	Quarterly Low	Quarterly Close
1/3/2007	3/30/2007	$82.39	$75.17	$79.51
4/2/2007	6/29/2007	$84.79	$79.75	$82.96
7/2/2007	9/28/2007	$85.74	$75.20	$80.04
10/1/2007	12/31/2007	$84.18	$73.02	$75.92
1/2/2008	3/31/2008	$75.12	$64.30	$68.51
4/1/2008	6/30/2008	$76.17	$68.47	$69.03
7/1/2008	9/30/2008	$75.20	$65.50	$68.39
10/1/2008	12/31/2008	$67.02	$38.58	$49.27
1/2/2009	3/31/2009	$51.27	$34.36	$41.94
4/1/2009	6/30/2009	$53.19	$42.82	$50.96
7/1/2009	9/30/2009	$62.02	$47.87	$60.23
10/1/2009	12/31/2009	$63.36	$56.22	$62.26
1/4/2010	3/31/2010	$69.25	$58.68	$67.81
4/1/2010	6/30/2010	$74.14	$61.08	$61.08
7/1/2010	9/30/2010	$67.67	$59.04	$67.47
10/1/2010	12/31/2010	$79.22	$66.94	$78.23
1/3/2011	3/31/2011	$84.17	$77.18	$84.17
4/1/2011	6/30/2011	$86.37	$77.77	$82.80
7/1/2011*	8/19/2011*	$85.65	$65.08	$65.24

As of the date of this pricing supplement, available information for the third calendar quarter of 2011 includes data for the period from July 1, 2011 through August 19, 2011. Accordingly, the Quarterly High, Quarterly Low and Quarterly Close data indicated are for this shortened period only and do not reflect complete data for the third calendar quarter of 2011.

The graph below illustrates performance of the IWM Fund from June 14, 2002 through August 19, 2011, based on information from Bloomberg. The dotted line represents the trigger price of $48.93, which is equal to 75% of the closing price on August 19, 2011. Past performance of the IWM Fund is not indicative of the future performance of the IWM Fund.

Market Vectors ® Gold Miners ETF

We have derived all information contained in this pricing supplement regarding the Market Vectors ® Gold Miners ETF (GDX Fund) from publicly available information. Such information reflects the policies of, and is subject to change by, Market Vectors ETF Trust, Van Eck Securities Corporation, and Van Eck Associates Corporation (Van Eck). We make no representations or warranty as to the accuracy or completeness of the information derived from these public sources.

The GDX Fund is an investment portfolio maintained and managed by Market Vectors ETF Trust (the Trust) and advised by Van Eck Associates Corporation. The Trust is a registered open-end investment company that consists of numerous separate investment portfolios, including the GDX Fund. The GDX Fund seeks to replicate as closely as possible the performance of the NYSE Arca Gold Miners Index (the Index) by investing in a portfolio of securities that generally replicates the Index. The Index, calculated by NYSE Arca, is a modified market capitalization-weighted index consisting of common stocks and American depository receipts (ADRs) of publicly traded companies involved primarily in mining for gold. The Index includes common stocks and ADRs of selected companies with market capitalizations greater than $100 million that have an average daily volume of at least 50,000 shares over the past six months. GDX Fund is passively managed and may not hold each Index component in the same weighting as the Index.

As of August 18, 2011, the net expense ratio of the GDX Fund are expected to accrue at an annual rate of 0.53% of the GDX Funds daily net asset value. Expenses of the GDX Fund reduce the net value of the assets held by the GDX Fund and, therefore, reduce value of the shares of the GDX Fund.

As of August 18, 2011, the GDX Funds five largest company holdings include: Barrick Gold Corp. (15.58%), Goldcorp, Inc. (12.55%), Newmont Mining Corp. (9.02%), Kinross Gold Corp. (5.84%) and Anglogold Ashanti Ltd. (5.37%).

Information filed by the Trust with the SEC under the Securities Exchange Act and the Investment Company Act can be found by reference to its SEC file number: 333-123527 and 811-10325. GDX Funds website is http://www.vaneck.com/funds/GDX.aspx. Shares of the GDX Fund are listed on the NYSE Arca under ticker symbol ``GDX. Information from outside sources is not incorporated by reference in, and should not be considered part of, this pricing supplement or any accompanying prospectus. We make no representation or warranty as to the accuracy or completeness of the information contained in outside sources.

Historical Information

The following table sets forth the quarterly high and low closing prices for the GDX Fund, based on daily closing prices as reported by Bloomberg. The closing price of the GDX Fund on August 19, 2011 was $61.27. Past performance of the GDX Fund is not indicative of the future performance of the GDX Fund.

●	●	●	●	●
Quarter Begin	Quarter End	Quarterly High	Quarterly Low	Quarterly Close
1/3/2007	3/30/2007	$42.28	$36.67	$39.42
4/2/2007	6/29/2007	$42.74	$37.03	$37.89
7/2/2007	9/28/2007	$45.80	$34.65	$45.10
10/1/2007	12/31/2007	$52.48	$42.64	$45.85
1/2/2008	3/31/2008	$56.29	$46.50	$47.75
4/1/2008	6/30/2008	$51.40	$42.38	$48.52
7/1/2008	9/30/2008	$50.84	$27.95	$34.08
10/1/2008	12/31/2008	$33.96	$16.38	$33.88
1/2/2009	3/31/2009	$38.57	$28.20	$36.88
4/1/2009	6/30/2009	$44.55	$30.95	$37.76
7/1/2009	9/30/2009	$48.00	$35.14	$45.29
10/1/2009	12/31/2009	$54.78	$41.87	$46.21
1/4/2010	3/31/2010	$50.17	$40.22	$44.41
4/1/2010	6/30/2010	$54.07	$46.36	$51.96
7/1/2010	9/30/2010	$56.66	$47.09	$55.93
10/1/2010	12/31/2010	$63.80	$54.28	$61.47
1/3/2011	3/31/2011	$60.79	$53.12	$60.06
4/1/2011	6/30/2011	$63.95	$51.80	$54.59
7/1/2011*	8/19/2011*	$61.27	$53.75	$61.27

As of the date of this pricing supplement, available information for the third calendar quarter of 2011 includes data for the period from July 1, 2011 through August 19, 2011. Accordingly, the Quarterly High, Quarterly Low and Quarterly Close data indicated are for this shortened period only and do not reflect complete data for the third calendar quarter of 2011.

The graph below illustrates performance of the GDX Fund from May 22, 2006 through August 19, 2011, based on information from Bloomberg. The dotted line represents the trigger price of $45.95, which is equal to 75% of the closing price on August 19, 2011. Past performance of the GDX Fund is not indicative of the future performance of the GDX Fund.

What are the Tax Consequences of the Securities?

The United States federal income tax consequences of your investment in the Securities are uncertain. Some of these tax consequences are summarized below, but we urge you to read the more detailed discussion in Supplemental U.S. Tax Considerations beginning on page PS-43 of the TAOS product supplement and to discuss the tax consequences of your particular situation with your tax advisor.

Pursuant to the terms of the Securities, UBS and you agree, in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary, to characterize the Securities as a pre-paid derivative contract with respect to the underlying equity. If your Securities are so treated, you should generally recognize capital gain or loss upon the sale, automatic call, redemption or maturity of your Securities in an amount equal to the difference between the amount you receive at such time and the amount you paid for your Securities. Such gain or loss should generally be long term capital gain or loss if you have held your Securities for more than one year.

Unless otherwise specified in this pricing supplement, in the opinion of our counsel, Cadwalader, Wickersham & Taft LLP, it would be reasonable to treat your Securities in the manner described above. However, because there is no authority that specifically addresses the tax treatment of the Securities, it is possible that your Securities could alternatively be treated for tax purposes in the manner described under Supplemental U.S. Tax Considerations Alternative Treatments beginning on page PS-45 of the TAOS product supplement. The risk that the Securities may be recharacterized for United States federal income tax purposes as instruments giving rise to current ordinary income (even before receipt of any cash) and short-term capital gain or loss (even if held for more than one year), is higher than with other equity-linked securities that similarly do not guarantee full repayment of principal.

In 2007, the Internal Revenue Service released a notice that may affect the taxation of holders of the Securities. According to the notice, the Internal Revenue Service and the Treasury Department are actively considering whether the holder of an instrument such as the Securities should be required to accrue ordinary income on a current basis. It is not possible to determine what guidance they will ultimately issue, if any. It is possible, however, that under such guidance, holders of the Securities will ultimately be required to accrue income currently and this could be applied on a retroactive basis. The Internal Revenue Service and the Treasury Department are also considering other relevant issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, and whether the special constructive ownership rules of Section 1260 of the Internal Revenue Code should be applied to such instruments. Holders are urged to consult their tax advisors concerning the significance, and the potential impact, of the above considerations. Except to the extent otherwise required by law, UBS intends to treat your Securities for United States federal income tax purposes in accordance with the treatment described above and under Supplemental U.S. Tax Considerations beginning on page PS-43 of the TAOS product supplement unless and until such time as the Treasury Department and Internal Revenue Service determine that some other treatment is more appropriate.

Moreover, in 2007, legislation was introduced in Congress that, if enacted, would have required holders of Securities purchased after the bill was enacted to accrue interest income over the term of the Securities despite the fact that there will be no interest payments over the term of the Securities. It is not possible to predict whether a similar or identical bill will be enacted in the future, or whether any such bill would affect the tax treatment of your Securities.

Specified Foreign Financial Assets . Under recently enacted legislation, individuals that own specified foreign financial assets may be required to file information with respect to such assets with their tax returns, especially if such assets are held outside the custody of a U.S. financial institution. You are urged to consult your tax advisor as to the application of this legislation to your ownership of the Securities.

Supplemental Plan of Distribution (Conflicts of Interest)

We have agreed to sell to UBS Financial Services Inc. and certain of its affiliates, together the Agents, and the Agents have agreed to purchase, all of the Securities at the issue price less the underwriting discount indicated on the cover of this pricing supplement, the document filed pursuant to Rule 424(b) containing the final pricing terms of the Securities.

We or one of our affiliates may enter into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the Securities and UBS or its affiliates may earn additional income as a result of payments pursuant to the swap or related hedge transactions.

Conflicts of Interest Each of UBS Securities LLC and UBS Financial Services Inc. is an affiliate of UBS and, as such, has a conflict of interest in this offering within the meaning of FINRA Rule 5121. In addition, UBS will receive the net proceeds (excluding the underwriting discount) from the initial public offering of the Securities, thus creating an additional conflict of interest within the meaning of Rule 5121. Consequently, the offering is being conducted in compliance with the provisions of Rule 5121. Neither UBS Securities LLC nor UBS Financial Services Inc. is permitted to sell Securities in this offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder.

Structured Product Categorization

To help investors identify appropriate Structured Products (Structured Products), UBS organizes its Structured Products into four categories: Protection Strategies, Optimization Strategies, Performance Strategies and Leverage Strategies. The Securities are classified by UBS as an Optimization Strategy for this purpose. The description below is intended to describe generally the four categories of Structured Products and the types of principal repayment features that may be offered on those products. This description should not be relied upon as a description of any particular Structured Product.

¨ Protection Strategies are structured to complement and provide the potential to outperform traditional fixed income instruments. These Structured Products are generally designed for investors with low to moderate risk tolerances.

¨ Optimization Strategies provide the opportunity to enhance market returns or yields and can be structured with full downside market exposure or with buffered or contingent downside market exposure. These structured products are generally designed for investors who can tolerate downside market risk.

¨ Performance Strategies provide efficient access to markets and can be structured with full downside market exposure or with buffered or contingent downside market exposure. These structured products are generally designed for investors who can tolerate downside market risk.

¨ Leverage Strategies provide leveraged exposure to the performance of an underlying asset. These Structured Products are generally designed for investors with high risk tolerances.

In order to benefit from any type of principal repayment feature, investors must hold the Securities to maturity.

Classification of Structured Products into categories is for informational purposes only and is not intended to guarantee particular results or performance.

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UBS AG Capital/Financing Update 2011

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UBS AG — Capital/Financing Update 2011

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UBS AG Capital/Financing Update 2011