{
    "complex": true,
    "type": "ETC",
    "replication_method": "synthetic",
    "ucits": false,
    "leverage": true,
    "derivatives": true,
    "swaps": true,
    "inverse": false,
    "complex_factors": [
        "3x daily leverage",
        "Synthetic replication using swaps",
        "Fully collateralized debt security structure",
        "Daily reset with compounding effect",
        "High risk profile (7/7)",
        "Non-UCITS compliant",
        "Short-term trading focus (1-day holding period)",
        "Counterparty risk from swap agreements"
    ],
    "classification": "complex",
    "supporting_data": "The WisdomTree Coffee 3x Daily Leveraged ETC is classified as complex under MiFID II due to multiple factors: 1) It uses 3x daily leverage, which creates a highly non-linear risk profile that's difficult for retail investors to understand; 2) It employs synthetic replication through swap agreements, introducing counterparty risk; 3) The product is structured as a fully collateralized debt security rather than a traditional equity ETF; 4) The daily reset mechanism with compounding effects means performance diverges significantly from the underlying index over time; 5) The product is explicitly stated to be 'not simple' and requires specific investment knowledge; 6) The risk profile is rated 7/7, the highest level; 7) The recommended holding period is just 1 day, indicating it's designed for short-term trading rather than long-term investment. While the product is fully collateralized, the complexity of the leverage mechanism and swap-based replication makes it unsuitable for retail investors without specialized knowledge. The PRIIPs KID confirms this complexity with warnings about the product being difficult to understand and requiring monitoring on a daily basis.",
    "confidence": 95
}