{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of derivatives for efficient portfolio management with counterparty risk mitigated by collateral policy",
    "classification": "non-complex",
    "supporting_data": "The UBS (Lux) Fund Solutions - Bloomberg US 7-10 Year Treasury Bond UCITS ETF is a UCITS-compliant ETF that primarily invests in bonds of the Bloomberg US 7-10 Year Treasury Bond Index. It uses physical replication by investing directly in the component securities and may use derivatives only for efficient portfolio management (EPM) purposes, such as replicating the index when direct investment is impracticable or to generate efficiencies. The derivatives used are OTC derivatives, which introduce counterparty risk; however, this risk is mitigated by the fund's collateral policy. The fund does not engage in securities lending, does not use leverage beyond UCITS limits, and tracks a transparent government bond index. The risk profile is moderate (risk category 4), reflecting market volatility rather than structural complexity. According to MiFID II rules and ESMA guidance, UCITS ETFs that use derivatives solely for EPM with limited impact on risk-return and physical replication are generally classified as non-complex. The presence of derivatives for EPM does not automatically trigger complexity if risks are mitigated and the structure is transparent. There is no indication of embedded derivatives or complex structured products such as CLOs. Therefore, this ETF meets the criteria for non-complex classification under MiFID II Article 25(4)(a)(iv) and Article 57 of the Delegated Regulation. The fund's structure and risks are understandable by retail investors with basic knowledge, and no significant leverage or opaque features are present. Hence, no comprehension alert is required in the PRIIPs KID for this ETF."
}