{
    "type": "ETC",
    "ucits": false,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": true,
    "leverage": false,
    "inverse": false,
    "complex_factors": [
        "Synthetic replication via fully collateralised swap",
        "Exposure to carbon futures contracts",
        "Counterparty risk from swap agreements",
        "Roll yield effects (contango/backwardation)",
        "High risk rating (6/7)",
        "Debt security structure (not equity)",
        "Collateralised debt security with counterparty exposure"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Carbon product is an Exchange Traded Commodity (ETC) structured as a fully collateralised debt security that synthetically replicates the Solactive Carbon Emission Allowances Rolling Futures Total Return Index via a fully funded swap agreement. The product does not physically hold the underlying commodity but gains exposure through swap contracts referencing carbon futures. The use of swaps is explicit, with collateral held to mitigate counterparty risk, but counterparty risk remains a key factor. The product is not UCITS compliant, which adds to complexity. The risk indicator is high (6 out of 7), reflecting the volatility and risks inherent in commodity futures exposure and swap counterparty risk. The product documentation highlights the impact of roll yield due to contango and backwardation in futures markets, which adds complexity to understanding performance. There is no leverage or inverse exposure, but the synthetic replication method, derivative use, and counterparty risk clearly classify this ETC as complex under MiFID II. The product is intended for investors with specific knowledge and experience, further supporting the complexity classification. The PRIIPs KID and factsheet confirm the swap-based structure, collateralisation, and risk disclosures, reinforcing the complex nature of the product."
}