{
    "success": true,
    "data": {
        "leverage": false,
        "derivatives": true,
        "swaps": false,
        "inverse": false,
        "replication_method": "hybrid",
        "ucits": true,
        "type": "ETF",
        "complex_factors": [
            "Derivative use integral to achieving investment objective (gaining index exposure/replication)",
            "Counterparty risk from derivative use (both for exposure and currency hedging)",
            "Complex underlying index methodology (SRI, Low Carbon, Issuer Capped)"
        ],
        "classification": "complex",
        "supporting_data": "The UBS (Lux) Fund Solutions - MSCI EMU Socially Responsible UCITS ETF is a UCITS fund, which typically benefits from a presumption of non-complexity. However, this presumption is overturned by specific features. The fund's investment policy states it will take exposure to the index 'either through direct investments in all or substantially all of the component securities and/or through the use of derivatives in particular where it may not be possible or practicable to replicate the index through direct investments or in order to generate efficiencies in gaining exposure to the index'. This indicates that derivatives are used as an integral part of achieving its investment objective (gaining exposure to or replicating the index), particularly when physical replication is not feasible or for efficiency, rather than solely for efficient portfolio management (EPM). The MiFID II rules classify an ETF as complex if derivatives are integral to its investment objective. The Key Investor Information (KII) also explicitly highlights 'potential loss due to failure of counterparty' as a risk associated with derivative use. According to the MiFID II rules, even limited derivative use for EPM can be flagged as complex by regulators if it introduces counterparty risk, which is clearly present here through the use of currency forwards for hedging. Understanding counterparty risk is considered difficult for retail investors. Furthermore, the fund tracks the 'MSCI EMU SRI Low Carbon Select 5% Issuer Capped 100% hedged to CHF Index (Net Return)'. The methodology of this index (involving Environmental, Social and Governance 'ESG' screening, 'Low Carbon Select', and '5% Issuer Capped' rules) introduces a level of complexity that may make it difficult for a retail investor with basic knowledge to fully understand the fund's structure, risks, and payoff. While the fund does not use securities lending or significant leverage, the integral use of derivatives, the associated counterparty risk, and the complexity of the underlying index methodology collectively lead to a classification of 'complex' under MiFID II."
    }
}