{
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps usage for up to 10% of assets, securities lending, derivative use for risk management",
    "classification": "complex",
    "supporting_data": "The HSBC S&P 500 UCITS ETF aims to track the S&P 500 Index primarily through physical full replication of the underlying shares. However, the KIID and PRIIPs KID disclose that the Fund may invest up to 10% of its assets in total return swaps and contracts for difference, and may use derivatives for efficient portfolio management and risk purposes. The Fund also engages in securities lending up to 30% of assets. While the Fund does not employ leverage, inverse exposure, or capital protection features, the presence of swap agreements (even limited to 10%) and derivative instruments for investment purposes triggers complexity under MiFID II. The Fund is UCITS compliant and has a risk rating of 5 out of 7, indicating medium-high risk, but this is driven by market volatility rather than leverage or structured features. The replication method is physical full replication, but the use of swaps and derivatives for investment exposure and risk management means the Fund cannot be classified as non-complex. There is no mention of funded or unfunded swap structures, but the presence of total return swaps and contracts for difference is sufficient to classify the Fund as complex. No leverage or inverse exposure is present. The underlying assets are large-cap US equities, which are liquid and transparent, and there are no capital protection or structured product features. Costs are straightforward with a low ongoing charge and no performance fees. The PRIIPs KID does not include a comprehension warning but does highlight counterparty risk and derivative risk. Overall, the limited but explicit use of swaps and derivatives for investment purposes leads to a MiFID II classification of complex."
}