{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": false,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "",
    "classification": "non-complex",
    "supporting_data": "The HSBC USA Screened Equity UCITS ETF is a UCITS-compliant ETF that aims to track the FTSE USA ESG Low Carbon Select Index by investing primarily in the shares of companies in the index. It uses physical replication or direct investment in shares, with only limited use of derivatives (up to 10% of assets in total return swaps and contracts for difference, but expected not to exceed 5%) and derivatives only for efficient portfolio management or investment purposes. The ETF may engage in securities lending up to 30% of assets but expected not to exceed 25%, which is a secondary feature and well-managed under UCITS rules. There is no significant leverage beyond UCITS limits, no embedded derivatives, and no complex structured products like CLOs or contingent convertible bonds. The index tracked is transparent and straightforward, and the ETF's structure and risks (market volatility, tracking error) are easily understood by retail investors with basic knowledge. The risk profile is high due to market volatility but not due to structural complexity. According to MiFID II Article 25(4)(a)(iv) and Article 57 of the Commission Delegated Regulation, UCITS ETFs are generally presumed non-complex unless they embed derivatives integral to the strategy or have complex features. The limited derivative use here is for EPM with minimal impact on risk-return, so derivatives are marked false for complexity purposes. The replication method is physical, supporting non-complex classification. No significant leverage or embedded derivatives are present. Therefore, this ETF meets the criteria for a non-complex financial instrument under MiFID II and does not require an appropriateness assessment for non-advised sales. This aligns with ESMA and CESR guidance that UCITS ETFs with physical replication and limited derivative use for EPM are non-complex. The ETF's structure, investment policy, and risk disclosures confirm this classification."
}