{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI TAIWAN CAPPED UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Use of total return swaps up to 10%",
        "Use of derivatives for investment and efficient portfolio management",
        "Exposure to securities lending up to 30%",
        "High concentration risk in benchmark",
        "Counterparty risk disclosures"
    ],
    "classification": "complex",
    "supporting_data": "The Fund is a UCITS ETF physically replicating the MSCI Taiwan Capped Index with full physical replication as per the factsheet. 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 both investment and efficient portfolio management purposes. Securities lending is also used up to 30% of assets. The Fund may invest up to 10% in other funds, including HSBC funds, which may themselves use derivatives. The risk disclosures highlight counterparty risk, derivatives risk, and investment leverage risk (though no explicit leverage ratio above 1:1 is stated). The risk indicator is 5/7, indicating medium-high risk. The Fund does not employ leverage or inverse strategies, and the replication method is physical, but the presence of total return swaps and derivatives for investment purposes, combined with counterparty risk and securities lending, triggers MiFID II complexity classification. The Fund invests in a concentrated emerging market index, which adds to complexity. No capital protection or structured features are present. Costs are straightforward with no performance fees, but derivative and swap usage imply additional complexity. The PRIIPs KID does not carry a specific comprehension warning but confirms derivative and swap usage. Overall, the Fund\u2019s use of total return swaps and derivatives for investment purposes, counterparty risk, and securities lending lead to a classification as complex under MiFID II despite physical replication being the primary method."
}