{
    "complex": false,
    "leverage": false,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "replication_method": "physical",
    "ucits": true,
    "type": "ETF",
    "complex_factors": [],
    "classification": "non-complex",
    "supporting_data": "The HSBC Europe ex UK Sustainable Equity UCITS ETF is classified as non-complex under MiFID II for the following reasons: 1. Physical Replication: The fund primarily uses physical replication to track the FTSE Developed Europe ex UK ESG Low Carbon Select Index, as confirmed in the monthly factsheet ('Replication method: Physical - Full'). 2. Limited Derivative Usage: While the fund has permission to use up to 10% of assets in total return swaps and contracts for difference (as stated in the KIID), the monthly factsheet confirms actual usage is minimal and consistent with efficient portfolio management (EPM) rather than speculative or leveraged strategies. 3. No Leverage or Inverse Exposure: There is no evidence of leverage or inverse strategies in the documentation. 4. Transparent Underlying Assets: The fund invests in liquid, transparent equities with no exposure to complex instruments like contingent convertible bonds or structured products. 5. Risk Profile: The fund's risk profile (category 6) is primarily driven by equity market risk, which is easily understandable by retail investors. 6. UCITS Compliance: The fund is UCITS-compliant, which inherently limits complexity and ensures regulatory oversight. 7. No Comprehension Warning: The PRIIPs KID does not include a comprehension warning, further supporting the non-complex classification. The only potential complexity factor is the derivative permission, but this is mitigated by the actual usage being minimal and aligned with EPM. The fund's structure, risk profile, and disclosure practices align with typical non-complex ETFs under MiFID II.",
    "confidence": 90
}