{
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "replication_method": "synthetic",
    "ucits": false,
    "type": "ETC",
    "complex_factors": [
        "Leverage (2x daily)",
        "Synthetic replication via swaps",
        "Non-UCITS structure",
        "High risk profile (7/7)",
        "Daily compounding effects",
        "Counterparty risk exposure"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Cocoa 2x Daily Leveraged ETC is classified as complex under MiFID II due to multiple factors: 1) It uses 2x daily leverage, which magnifies both gains and losses and requires daily monitoring, making it unsuitable for long-term holding. 2) The ETC employs synthetic replication via fully collateralized swaps, introducing counterparty risk and derivative exposure. 3) The product is not UCITS-compliant and carries a 7/7 risk rating, indicating very high risk. 4) The daily compounding effect means performance deviates significantly from the underlying index over time, adding complexity. 5) The PRIIPs KID explicitly states it is 'not simple and may be difficult to understand,' reinforcing its complex nature. While the ETC is fully collateralized, the combination of leverage, synthetic replication, and high risk profile makes it unsuitable for retail investors without specialized knowledge.",
    "confidence": 95
}