{
    "complex": false,
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "ucits": true,
    "type": "ETF",
    "complex_factors": null,
    "classification": "non-complex",
    "supporting_data": "The HSBC MSCI Europe Islamic ESG UCITS ETF is classified as non-complex under MiFID II regulations based on the following analysis: The ETF uses physical replication to track the MSCI Europe Islamic ESG Universal Screened Select Index, investing directly in the underlying securities rather than using derivatives or swaps. While the KIID mentions that derivatives may be used, it specifies they are only Shariah-compliant foreign exchange contracts (including spot and forward contracts) for hedging purposes, which is considered efficient portfolio management (EPM) and does not trigger complexity. The fund does not employ leverage, inverse strategies, or synthetic replication. The risk profile is transparent, with a risk rating of 6 primarily due to market volatility rather than structural complexity. The ETF is UCITS-compliant, providing additional investor protections and transparency. The investment objective is straightforward: tracking an index of large and mid-cap European companies screened for Islamic and ESG compliance. The fund's performance is closely aligned with its benchmark, with minimal tracking error. While the ESG and Shariah screening add layers of criteria, these do not introduce structural complexity from a MiFID II perspective. The fund's liquidity is adequate, with shares listed on multiple exchanges, and there are no capital protection mechanisms or structured features that would indicate complexity. The ongoing charge of 0.30% is simple and transparent. The primary reason for the non-complex classification is the physical replication method combined with the absence of leverage, inverse strategies, or significant derivative usage beyond standard hedging.",
    "confidence": 95
}