{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of derivatives for efficient portfolio management and currency hedging",
    "classification": "non-complex",
    "supporting_data": "The UBS MSCI Japan Socially Responsible UCITS ETF is a UCITS-compliant ETF that primarily invests physically in the underlying securities of the MSCI Japan SRI Low Carbon Select 5% Issuer Capped Index, with possible limited use of derivatives for efficient portfolio management (EPM) and currency hedging via currency forwards. The ETF does not engage in securities lending, does not use significant leverage, and does not embed derivatives integral to its investment objective such as swaps or futures replicating the index synthetically. The derivatives used are limited to currency forwards for hedging, which is consistent with EPM and minimal impact on risk-return profile. The replication method is physical, holding the underlying securities, which supports transparency and ease of understanding for retail investors. The ETF promotes ESG characteristics but does not have a sustainable investment objective that would add complexity. The risk profile is moderate to high due to equity market volatility but this does not imply structural complexity. According to MiFID II Article 254 and Delegated Regulation EU 2017/565 Article 57, and ESMA guidelines, such a UCITS ETF with physical replication and limited derivative use for EPM is classified as non-complex. The ETF's structure and risks are straightforward enough for a retail investor with basic knowledge to understand, and no embedded derivatives or complex features like synthetic replication or leverage are present. Therefore, no comprehension alert is required in the PRIIPs KID. This assessment aligns with regulatory guidance that all UCITS are presumed non-complex unless they embed complex features, which this ETF does not. The use of currency forwards for hedging is not considered as derivative use integral to the investment objective, so 'derivatives' is marked false in the complexity context. Hence, the ETF is classified as non-complex under MiFID II appropriateness rules."
}