{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of Shariah-compliant foreign exchange contracts for hedging; potential exposure to single issuer up to 35% in exceptional conditions; ESG screening and index rebalancing complexity",
    "classification": "non-complex",
    "supporting_data": "The HSBC MSCI Europe Islamic ESG UCITS ETF is a UCITS-compliant ETF, which under MiFID II is generally presumed non-complex. It uses physical replication by investing in shares of companies in the MSCI Europe Islamic ESG Universal Screened Select Index or equivalent Shariah-compliant instruments such as depositary receipts. The ETF uses derivatives only for hedging currency risk (foreign exchange contracts), which is considered efficient portfolio management (EPM) and does not inherently increase complexity under MiFID II. There is no indication of synthetic replication, embedded derivatives, or leverage beyond UCITS limits. The fund's structure and risks (market volatility, tracking error) are transparent and understandable to retail investors with basic knowledge. Although the fund may invest up to 35% in a single issuer under exceptional market conditions, this is allowed under UCITS rules and does not automatically render the ETF complex. The ESG screening and index rebalancing add some operational complexity but do not affect the MiFID II complexity classification. The risk profile is high (category 6) due to market volatility, not structural complexity. Therefore, based on MiFID II Article 254, Delegated Regulation EU 2017/565 Article 57, and ESMA guidelines, this UCITS ETF is classified as non-complex."
}