UBS is considering incorporating its investment bank, which had to be rescued by the Swiss government after it lost billions during the financial crisis, in London, New York or Singapore, where it would have its own capital and be overseen by local regulators, the WSJ reported.
A UBS spokesman declined to comment on the report which he described as speculation. Switzerland's financial market regulator FINMA, which the WSJ said was pushing UBS to make the change, was not immediately available for comment.
Last month, UBS called for a year's delay to stringent Swiss capital rules to allow more clarity on international regulation, while striking a more conciliatory note by vowing to keep its base in Switzerland.
"It's definitely something... they have been looking at," said Vontobel analyst Teresa Nielsen.
"They have to have all the possibilities open to have a level playing field with their competitors. They would be very disadvantaged if this Swiss regulation were to come through."
UBS Chief Executive Oswald Gruebel has said the stiff Swiss standards could force UBS to move units abroad.
Last week, he moved to reassure staff at the investment bank, saying UBS planned to invest in rebuilding teams and in "existing talent," acknowledging recent scrutiny of personnel turnover at the bank. He added that UBS's ambitions went beyond being among the top five investment banks in the region.
Chairman Kaspar Villiger told the bank's annual shareholders' meeting last month that UBS was not threatening to relocate abroad and was aware of the advantages of being based in Switzerland.
But he also said UBS was investigating whether regulatory changes and new market trends would require strategic and organizational adjustments.
In April, the Swiss government handed to parliament plans to make UBS and Credit Suisse <CSGN.VX> <CS.N> reach new capital standards that go beyond global rules, saying the benefit to the economy outweighed costs to the banks.
The popular right-wing Swiss People's Party (SVP) has proposed that UBS and Credit Suisse split off their U.S. divisions, separating investment banking from wealth management.
UBS has defended the integrated bank model, saying investment banking provided important services for Swiss firms and was also indispensible for a global wealth manager.
(Reporting by Lincoln Feast and Caroline Copley in Zurich; Writing by Anshuman Daga and Emma Thomasson; Editing by Neil Fullick and Mike Nesbit)
($1=0.8760 Swiss franc)