{
    "type": "ETP",
    "ucits": false,
    "replication_method": "synthetic",
    "swaps": true,
    "derivatives": true,
    "leverage": true,
    "inverse": true,
    "complex_factors": [
        "3x leverage",
        "Inverse exposure",
        "Synthetic replication via funded swap",
        "Counterparty risk",
        "Daily reset compounding effect",
        "High risk rating (7/7)",
        "Collateralised swap structure"
    ],
    "classification": "complex",
    "supporting_data": "The GraniteShares 3x Short Rolls-Royce Daily ETP is a collateralised exchange traded product (ETP) that seeks to replicate -3 times the daily performance of Rolls-Royce Holdings plc via the Solactive Daily Leveraged 3x Short Rolls-Royce Holdings plc Index. The product uses a funded swap agreement with Natixis as the swap counterparty, with collateral held in a segregated account. The replication method is synthetic, relying on total return swaps rather than physical ownership of underlying securities. The product employs 3x leverage and inverse exposure, resetting daily, which introduces a compounding effect that can cause returns over periods longer than one day to deviate significantly from the simple leveraged inverse of the underlying asset. The risk indicator is at the highest level (7/7), reflecting very high risk and complexity. The product is not UCITS compliant. The KIID explicitly states the product is 'not simple and may be difficult to understand' and is intended for investors with specific knowledge and experience. There is significant counterparty risk due to reliance on the swap provider, although mitigated by collateral arrangements. Costs include portfolio transaction costs and other ongoing costs, but no performance fees. The product\u2019s complexity is driven primarily by its synthetic replication via swaps, high leverage and inverse exposure, daily reset compounding, and counterparty risk. These factors align with MiFID II criteria for complex financial instruments."
}