{
    "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",
        "Use of other FDIs (options, non-deliverable futures)",
        "Currency hedging via FX forwards"
    ],
    "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 a portfolio of equities whose returns are swapped with counterparties, exposing investors to counterparty risk. The Fund may also use other financial derivative instruments such as options and non-deliverable futures to gain exposure when swaps are not practicable. The replication method is synthetic, not physical, and the Fund employs currency hedging through FX forward contracts. The risk profile is rated 6 out of 7, indicating a medium-high risk level, driven by derivative use and counterparty risk. There is no leverage or inverse exposure. The Fund is UCITS compliant but the use of unfunded total return swaps and other derivatives as a core part of the investment strategy, combined with significant counterparty risk and synthetic structure, classifies this ETF as complex under MiFID II. The fact sheet confirms the synthetic swap methodology and highlights counterparty risk and derivative sensitivity. No capital protection or structured features are present, and costs are straightforward with no performance fees. However, the complexity arises primarily from the synthetic replication and derivative counterparty exposure, which may not be easily understood by retail investors. Therefore, despite a straightforward equity index exposure, the synthetic swap structure and associated risks drive the complex classification."
}