{
    "type": "ETC",
    "ucits": false,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "complex_factors": "Physical exposure to EU Carbon Allowances, Secured Debt Structure, High Market Risk",
    "classification": "complex",
    "supporting_data": "The SparkChange Physical Carbon EUA ETC is structured as a secured debt security linked directly to physical European Union Allowances (EUAs) under the EU Emissions Trading Scheme. The ETC holds physical EUAs via a Backing Issuer, with no indication of synthetic replication, swap agreements, or derivative instruments used to achieve exposure. The replication method is physical, with direct exposure to the underlying carbon allowances. There is no leverage, inverse exposure, or derivative usage inherent in the investment strategy. However, the product is not UCITS compliant and is structured as an ETC (debt security), which inherently carries counterparty risk related to the issuer and the backing issuer. The risk indicator is high (6 out of 7), reflecting the volatile and complex nature of the carbon allowance market, influenced by regulatory, environmental, and energy policy factors. The ETC does not provide capital protection or structured features but is exposed to market, liquidity, and issuer credit risk. The complexity arises primarily from the nature of the underlying asset (carbon allowances), the ETC\u2019s debt security structure, and the high risk rating, which may make it difficult for retail investors to fully understand the product and its risks. There are no references to swaps, derivatives, leverage, or inverse strategies. Costs are straightforward with a management fee of 0.89% and no performance fees or swap fees. The product\u2019s complexity under MiFID II is driven by the ETC structure (debt security, not a collective investment scheme), the underlying asset class (carbon allowances with complex market drivers), and the high risk profile rather than synthetic replication or leverage."
}