Investing.com -- UBS Group AG (NYSE: UBS ) shares fell 3.2% today after reports emerged that the Swiss bank is likely to face a setback in its efforts to influence Swiss government regulations. Bloomberg News reported that UBS is expected to lose the first round of its battle against a law that could mandate it to hold up to an additional $25 billion in capital.

The Swiss government’s proposed bill, which is scheduled for an outline release on June 6, would require UBS to ensure its foreign subsidiaries maintain 100% of the capital necessary to cover potential losses. This information comes from sources familiar with the matter who also noted that the bill’s text is not final and could undergo changes by the Federal Council, Switzerland’s cabinet equivalent.

The potential for such a requirement has been discussed by the Swiss financial regulator Finma since last year, but the government has not yet confirmed its position on the matter. UBS executives, including CEO Sergio Ermotti, have been actively lobbying against this requirement, arguing that it would place UBS at a significant competitive disadvantage compared to its global counterparts.

The Swiss government and UBS spokespeople have declined to comment on the reports. The news has concerned investors, as the additional capital requirements could impact the bank’s financial flexibility and profitability.

The stock’s decline reflects the market’s reaction to the potential increase in regulatory burden and the implications it may have for UBS’s strategic and operational decisions moving forward. The situation remains fluid as the bank awaits the final decision from the Swiss government.