{
    "ucits": true,
    "type": "ETF",
    "leverage": false,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Use of derivatives for portfolio optimisation and limited synthetic exposure",
    "classification": "non-complex",
    "supporting_data": "The UBS (Lux) Fund Solutions - Bloomberg USD Emerging Markets Sovereign UCITS ETF is a UCITS-compliant ETF, which under MiFID II is generally presumed non-complex. The fund uses a stratified sampling strategy with portfolio optimisation to replicate the Bloomberg Emerging Markets USD Sovereign & Agency 3% Country Capped Index. It may use derivatives, but only for efficient portfolio management purposes, such as managing exposure or hedging, not as an integral part of the investment objective. The fund explicitly states it will not engage in securities lending and does not use leverage beyond UCITS limits. The replication method is physical or a combination of physical and limited derivatives, but not synthetic replication reliant on total return swaps. The risks disclosed relate mainly to market volatility and credit risk typical of emerging market bonds, without embedded derivatives or complex structured products like CLOs. According to MiFID II Article 25(4)(a)(iv) and Article 57 criteria, UCITS ETFs that do not embed derivatives as a core strategy and do not have complex features such as leverage, capital protection, or opaque indices are non-complex. The fund's transparency, liquidity, and straightforward risk profile support this classification. Although derivatives are used, they are limited to portfolio optimisation and do not introduce counterparty or collateral risks that would make the product complex. Therefore, the ETF meets the criteria for non-complex instruments under MiFID II and does not require an appropriateness assessment for execution-only sales."
}