{
    "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 Japan Treasury 1-3 Year Bond UCITS ETF is a UCITS-compliant ETF that primarily invests in bonds and transferable securities. It uses derivatives only where direct replication of the index is not possible or to generate efficiencies, which aligns with efficient portfolio management (EPM) rather than being integral to the investment objective. The derivatives used are OTC derivatives with counterparty risk mitigated by a collateral policy. The fund does not engage in securities lending and does not use leverage beyond UCITS limits. The replication method is physical or optimized physical, holding substantially all component securities. The underlying index is transparent and straightforward (Bloomberg Global Japan Treasury 1-3 Year Index). The risk profile is moderate (risk category 3), reflecting market volatility but not structural complexity. According to MiFID II rules and ESMA guidance, UCITS ETFs are presumed non-complex unless they embed derivatives integral to the strategy or have complex features such as synthetic replication or embedded derivatives. This ETFu2019s use of derivatives is limited to EPM with minimal impact on risk-return, and the structure and risks are understandable by retail investors with basic knowledge. Therefore, it meets the criteria for non-complex classification under MiFID II Article 254 and Delegated Regulation EU 2017/565 Article 57. The presence of derivatives for EPM does not automatically trigger complexity if risks are mitigated and disclosed. No embedded derivatives or leverage beyond UCITS limits are present. Hence, the ETF is classified as non-complex."
}