{
    "type": "ETF",
    "ucits": true,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": true,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Unfunded total return swaps",
        "Counterparty risk",
        "Synthetic replication",
        "Derivative instruments exposure"
    ],
    "classification": "complex",
    "supporting_data": "The iShares MSCI USA Swap UCITS ETF uses synthetic replication via unfunded total return swaps to achieve its investment objective, as explicitly stated in both the KIID and PRIIPs KID. The Fund invests in financial derivative instruments (FDIs) including swaps, options, and non-deliverable futures, with the primary method being unfunded total return swaps. The Fund holds a portfolio of global developed market equity securities whose returns are paid to swap counterparties, indicating counterparty exposure and derivative counterparty risk. The risk profile is rated 6 out of 7 in the KIID, reflecting medium-high risk largely due to derivative and counterparty risks. There is no leverage or inverse exposure, and the Fund is UCITS compliant. The monthly factsheet confirms the synthetic structure and swap usage, with no leverage or capital protection features. The complexity arises mainly from the synthetic replication method, the use of unfunded total return swaps, and the associated counterparty risk, which can be difficult for retail investors to fully understand. No capital protection or structured features are present, and the Fund invests in liquid equity securities underlying the MSCI USA Index. Costs are straightforward with no performance fees, but swap and derivative usage inherently adds complexity. Therefore, under MiFID II, this ETF is classified as complex due to its synthetic replication via unfunded total return swaps and significant counterparty risk exposure."
}