{
    "complex": false,
    "classification": "non-complex",
    "type": "ETF",
    "ucits": true,
    "replication_method": "physical",
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "complex_factors": [],
    "supporting_data": "The HSBC USA Screened Equity UCITS ETF is classified as non-complex under MiFID II regulations. The primary reasons for this classification are: (1) The ETF uses physical replication as its main strategy to track the FTSE USA ESG Low Carbon Select Index, which is a straightforward and transparent methodology. (2) While the ETF has the ability to use derivatives (up to 10% in total return swaps and contracts for difference), this is explicitly stated to be for efficient portfolio management purposes rather than as a core part of the investment strategy. The KIID indicates that derivative usage is not expected to exceed 5%, which is a relatively minor portion of the portfolio. (3) The ETF does not employ leverage, inverse strategies, or other complex financial instruments that would amplify risk or make the product difficult to understand. (4) The underlying assets are primarily liquid equities from large U.S. companies, which are generally considered straightforward investments. (5) The risk profile, while rated at level 6 (indicating higher volatility), is primarily driven by the nature of the underlying equity market rather than complex financial engineering. The ETF's compliance with UCITS regulations further supports its classification as non-complex, as UCITS funds are generally designed to be suitable for retail investors with appropriate risk disclosures.",
    "confidence": 90
}