{
    "success": true,
    "data": {
        "ucits": true,
        "type": "ETF",
        "leverage": false,
        "derivates": false,
        "swaps": false,
        "inverse": false,
        "replication_method": "physical",
        "complex_factors": "The ETF may use derivatives for efficient portfolio management but is expected to have minimal impact. The fund invests in shares of companies from developed and emerging market countries in the Far East ex Japan. The fund may invest up to 10% in total return swaps and contracts for difference. However this is not expected to exceed 5%. The risk and reward profile is at category 6 out of 7.",
        "classification": "non-complex",
        "supporting_data": "Based on the provided Key Investor Information (KID) document, the HSBC MSCI AC FAR EAST ex JAPAN UCITS ETF is classified as non-complex. The fund aims to track the performance of the MSCI AC Far East ex Japan Index using physical replication, investing in or gaining exposure to shares of companies within the index. While the fund *may* use derivatives for efficient portfolio management (EPM), the KID states this usage has minimal impact on the risk-return profile and is not central to the investment strategy and is not a primary component of the fund.. The KID also mentions potential investment in total return swaps and contracts for difference up to 5%, which is important. Given the physical replication method, lack of significant derivative use (or reliance on swaps), and transparency of the underlying index, the fund aligns with the criteria for non-complexity. The high-risk rating (category 6) reflects market volatility of the underlying investments, not the structure's complexity. The ESMA document details a framework for assessing complexity, with the use of derivatives and the implementation of these derivatives for efficient portfolio management. The ESMA document states that any derivative usage automatically triggers a review for complexity, but efficient portfolio management, such as hedging and reducing cost, is generally seen as non-complex - this fund is not complex under that test. The index itself is not complex.",
        "esma_guidance": [
            "The supervisory briefing is designed for supervisors as an accessible introduction to Directive 2014/65/EU appropriateness rules, and as a useful starting point when deciding on areas of supervisory focus.",
            "The way in which the requirements apply depends on the type of service in question, the type of investment product involved (in particular, whether the investment product is u2018complexu2019 or u2018non -complexu2019), and the type of client.",
            "This supervisory briefing is aimed at competent authorities (as defined in MiFID II ). It is also meant to give market participants indications of compliant implementation of the MiFID II appropriateness provisions.",
            "The MiFID II appropriateness rules give firms a certain degree of flexibility regarding the information to obtain about the clientu2019s knowledge and experience : the information to be collected shoul d be the information necessary with regard to the nature of the client, the nature and extent of the service to be provided and the type of investment product or transaction envisaged, including their complexity and the risks involved (proportionality prin ciple)",
            "Article 25(4) of MiFID II (together with Article 57 of the MiFID II Delegated Regulation) provides for an optional exemption from the appropriateness test for certain types of u2018execution -onlyu2019 business, where a number of conditions are met ."
        ]
    }
}