{
    "type": "ETF",
    "ucits": true,
    "leverage": false,
    "derivatives": false,
    "swaps": true,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": [
        "Currency Hedging",
        "Counterparty Risk from Swaps"
    ],
    "classification": "complex",
    "supporting_data": "The ETF primarily uses physical replication to track the TOPIX Gross Total Return Index, which is a straightforward equity index. However, the factsheet reveals the use of OTC swaps with counterparties (MORGAN STANLEY BANK AG, SOCIETE GENERALE) for currency hedging purposes, which introduces counterparty risk and complexity. While the swaps are used for hedging rather than leverage or synthetic replication, their presence and the associated counterparty risk (limited to 10% of total assets under UCITS rules) still classify the ETF as complex under MiFID II. The KIID explicitly mentions counterparty risk from derivative instruments, and the factsheet confirms the use of swaps, which are considered complex instruments. The ETF's risk profile (SRRI 5) and the need for daily currency hedging further support this classification.",
    "confidence": 85,
    "counter_argument": "Some may argue that the ETF is non-complex because it uses physical replication and the swaps are only for hedging, not for synthetic replication or leverage. However, MiFID II considers any use of derivatives (including swaps for hedging) as a potential complexity factor, especially when counterparty risk is involved. The presence of OTC swaps and the associated risks make the ETF complex, even if the underlying strategy is straightforward.",
    "risk_level": 5
}