{
    "leverage": true,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "synthetic",
    "ucits": false,
    "type": "ETP",
    "complex_factors": "Leverage, Futures, Daily Reset, Compounding Effect, High Risk Profile, No Capital Protection, Issuer Risk, No Investor Compensation",
    "classification": "complex",
    "supporting_data": "The WisdomTree Bund 10Y 3x Daily Leveraged ETP is a certificated, collateralised debt security that provides 3x daily leveraged exposure to Bund futures contracts. It is not a UCITS, but is UCITS-eligible. The product uses futures contracts (derivatives) as the primary means to achieve its leveraged objective, which is central to its investment strategyu2014not merely for efficient portfolio management. The daily reset mechanism introduces a compounding effect, making the product's performance over periods longer than one day significantly different from a simple 3x multiple of the index, especially in volatile markets. The product carries the highest risk indicator (7/7), reflecting the potential for very high losses, including the possibility of losing the entire investment. There is no capital protection, and the product is not covered by any investor compensation or guarantee scheme. The structure, risks (including issuer risk and the complexity of futures rolling and compounding), and the fact that the product is intended for informed retail investors who can bear loss of capital and have specific knowledge or experience, all contribute to its complexity. The product's KID includes a comprehension alert, further signaling its complexity. Under MiFID II, the use of leverage through derivatives integral to the investment objective, the daily reset/compounding feature, and the high risk profile make this ETP complex, as it would be difficult for a retail investor with basic knowledge to understand the risks and payoff structure. The product does not meet the criteria for non-complex instruments under Article 57 of the MiFID II Delegated Regulation, particularly due to the use of derivatives for leverage (not just EPM), the potential for losses exceeding the cost of acquisition, and the complexity of the payoff profile over time."
}