{
    "ucits": true,
    "type": "ETF",
    "replication_method": "physical",
    "derivatives": true,
    "swaps": false,
    "leverage": false,
    "inverse": false,
    "complex_factors": "Derivative use for efficient portfolio management, potential counterparty risk, securities lending",
    "classification": "non-complex",
    "supporting_data": "The UBS MSCI Canada UCITS ETF is a UCITS-compliant, physically replicated ETF tracking the MSCI Canada Index. It is passively managed and primarily invests directly in the underlying securities of the index. The fund may use derivatives for efficient portfolio management (EPM), such as managing inflows/outflows or hedging currency risk, but derivatives are not central to the investment strategy. The KID explicitly states that derivatives may be used where direct replication is not possible or practical, and that OTC derivatives introduce counterparty risk, which is mitigated by the fund's collateral policy. The fund may engage in securities lending, which introduces additional counterparty risk but is a common, secondary feature in UCITS ETFs and is managed within regulatory limits. There is no indication of significant leverage, synthetic replication, embedded derivatives, or complex structured products like CLOs. The index tracked is a standard, transparent equity index. The fund's structure, risks, and objectives are clearly disclosed and designed to be understood by retail investors with basic knowledge. Under MiFID II, UCITS ETFs are presumed non-complex unless they are structured UCITS or fail the Article 57 criteria. Here, the derivative use is limited to EPM, the structure is transparent, and there are no features that would make the product difficult for a retail investor to understand. Therefore, despite the use of derivatives for EPM and securities lending, the ETF remains non-complex under MiFID II[1]."
}