{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Derivative use for efficient portfolio management, potential counterparty risk, but not central to strategy",
    "classification": "non-complex",
    "supporting_data": "The UBS MSCI Pacific ex Japan UCITS ETF is a UCITS-compliant, physically replicated ETF tracking a transparent, well-documented equity index. It is passively managed and primarily invests directly in the underlying securities of the index. Derivatives may be used, but only for efficient portfolio management (EPM) purposesu2014such as managing inflows/outflows, hedging currency risk, or reducing transaction costsu2014and not as a central part of the investment strategy. The KID explicitly states that derivatives are used 'in particular where it may not be possible or practicable to replicate the index through direct investments or in order to generate efficiencies in gaining exposure to the index.' Counterparty risk from OTC derivatives is mitigated by the fund's collateral policy. There is no evidence of synthetic replication, leverage beyond UCITS limits, embedded derivatives, or other complex features such as contingent convertible bonds, swaps central to the strategy, or complex indices. The fund's structure, risks, and objectives are transparent and straightforward for a retail investor with basic knowledge. Under MiFID II, all UCITS are automatically non-complex unless they employ complex portfolio management techniques or structured features that make the product difficult to understandu2014neither of which is present here[1]. The use of derivatives for EPM with robust risk mitigation does not, in this case, trigger a complex classification, as the derivatives are not integral to achieving the fund's objective and the associated risks are well-managed and disclosed."
}