{
    "type": "ETF",
    "ucits": true,
    "fund_name": "HSBC UK SUSTAINABLE EQUITY UCITS ETF",
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "Swaps usage",
        "Counterparty risk",
        "Securities lending"
    ],
    "classification": "complex",
    "supporting_data": "The Fund is a UCITS ETF aiming to track the FTSE UK ESG Low Carbon Select Index using primarily physical replication of underlying shares. 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, which introduces synthetic elements. The Fund also uses derivatives for efficient portfolio management and may engage in securities lending up to 30% of assets. The KIID and PRIIPs documents disclose counterparty risk related to swap counterparties and derivatives, and mention that derivatives can behave unexpectedly. The Fund is not leveraged and does not use inverse or amplified exposure. The risk rating is 6 in the KIID (high risk) but 4 in the PRIIPs KID (medium risk), reflecting the volatility and derivative usage. The Fund does not have capital protection or structured features. The presence of swap agreements, counterparty risk, and securities lending, even at limited levels, triggers MiFID II complexity classification. The Fund\u2019s replication is primarily physical but the use of swaps for up to 10% of assets means derivatives are inherent to the strategy rather than solely for risk management, thus derivatives = false per instructions. No leverage or inverse exposure is present. The underlying assets are equities, liquid and transparent, but the partial synthetic exposure and counterparty risk elevate complexity. No contingent bonds or structured products are held. The PRIIPs KID does not carry a specific comprehension warning but highlights counterparty and leverage risks. The monthly factsheet confirms physical replication as primary but acknowledges swap usage and securities lending. Overall, the Fund\u2019s partial synthetic replication and counterparty risk exposure lead to a classification of complex under MiFID II."
}