{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI CHINA UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Use of total return swaps (up to 10% of assets)",
        "Exposure to derivatives for investment and risk management",
        "Securities lending up to 30% of assets",
        "High concentration in underlying index",
        "Emerging market exposure with liquidity and currency risks"
    ],
    "classification": "complex",
    "supporting_data": "The HSBC MSCI CHINA UCITS ETF primarily uses physical replication investing directly in shares of companies in the MSCI China Index. 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 also engages in securities lending up to 30% of its assets. The presence of total return swaps and derivative instruments, even at limited levels, triggers complexity under MiFID II rules. The Fund is UCITS compliant and does not employ leverage or inverse strategies. The risk profile is high (7/7 in KIID, 5/7 in PRIIPs), reflecting emerging market risks, counterparty risk from derivatives, liquidity risk, and currency risk. The Fund\u2019s underlying index is highly concentrated, which may increase tracking error and complexity. The monthly factsheet confirms physical replication as the primary method but acknowledges derivative usage for exposure and risk management. No capital protection or structured features are present. Costs are straightforward with no performance fees, but derivative and securities lending activities add complexity. Overall, the use of total return swaps and derivatives for investment purposes, combined with counterparty risk and emerging market exposure, leads to a MiFID II classification of 'complex' despite the physical replication base and absence of leverage or inverse exposure."
}