{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC MSCI EUROPE UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": "Swaps usage for up to 10% of assets, securities lending, potential use of derivatives for efficient portfolio management",
    "classification": "complex",
    "supporting_data": "The Fund aims to track the MSCI Europe Index primarily through physical replication of underlying equities. However, it may invest up to 10% of its assets in total return swaps and contracts for difference, and up to 10% in other funds, including HSBC funds. The KIID and PRIIPs documents confirm the use of derivatives and swaps, but these are limited in scale and primarily for efficient portfolio management and risk/cost control rather than inherent leverage or speculative purposes. The Fund is UCITS compliant and uses physical replication as the main method, but the presence of swap agreements and derivative instruments, even at limited levels, triggers MiFID II complexity classification. There is no leverage above 1:1, no inverse or leveraged exposure, and no capital protection or structured features. The risk profile is medium to high (category 4-6 in different documents), reflecting market volatility rather than structural complexity. The Fund also engages in securities lending up to 30% of assets, which adds counterparty risk. The PRIIPs KID does not carry a comprehension warning but notes counterparty and leverage risks. The monthly factsheet confirms physical replication as primary, with limited swap usage for up to 10% of assets, consistent with the KIID. Overall, the limited but explicit use of swaps and derivatives, combined with securities lending and counterparty risk, leads to a classification of 'complex' under MiFID II despite the straightforward index-tracking objective and physical replication base."
}