{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps",
    "classification": "complex",
    "supporting_data": "The HSBC MSCI JAPAN UCITS ETF primarily uses physical full replication of the MSCI Japan Index, investing directly in shares of the index constituents. However, the KIID and PRIIPs documents explicitly state that the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, and may use derivatives for both investment and efficient portfolio management purposes. The Fund may also engage in securities lending up to 30% of its assets. The use of total return swaps, even if limited to 10%, and contracts for difference introduces counterparty risk and derivative exposure beyond mere risk management, which under MiFID II rules classifies the instrument as complex. There is no leverage or inverse exposure, and the risk profile is medium-high (category 5 out of 7), reflecting market volatility rather than leverage. The replication method is physical full replication, but the presence of swap usage for gaining exposure to index constituents when direct investment is impractical is a key complexity driver. The Fund is UCITS compliant and does not employ leverage or capital protection features. The PRIIPs KID does not carry a specific comprehension warning but confirms derivative and counterparty risks. The monthly factsheet confirms physical replication as primary but acknowledges derivative usage up to 10%. Therefore, despite the physical replication, the presence of funded or unfunded swap agreements and derivative instruments for investment purposes leads to a classification of 'complex' under MiFID II."
}