{
    "ucits": true,
    "type": "ETF",
    "leverage": true,
    "derivatives": true,
    "swaps": false,
    "inverse": false,
    "replication_method": "physical",
    "complex_factors": "Leverage, Daily rebalancing compounding effect, Structured exposure to leveraged index",
    "classification": "complex",
    "supporting_data": "The product is a UCITS ETF (Leverage Shares 3x Square ETP Securities) that aims to provide 3 times the daily performance of the Square, Inc. equity security, tracking a leveraged index (iSTOXX Leveraged 3x SQ Index). It uses leverage of 3x daily, which is significant and beyond typical UCITS limits for borrowing, making it complex. The product involves daily leverage rebalancing causing a compounding effect that can significantly alter returns over holding periods longer than one day, increasing complexity and risk. The product is collateralised and holds underlying assets and cash in a margin account, but the leverage and daily reset features introduce risks that are difficult for retail investors with basic knowledge to understand. The KID explicitly states it is not simple and may be difficult to understand, and the risk indicator is at the highest level (7/7). The use of derivatives is implied by the leveraged exposure and margin account structure, but derivatives are used as an inherent element of the strategy, not merely for efficient portfolio management. The product is not capital protected and has significant risk of loss, including losses exceeding initial investment if leverage effects are considered. According to MiFID II Article 254 and Delegated Regulation EU 2017/565 Article 57, such leveraged ETFs with daily reset and compounding effects are classified as complex due to leverage, derivative use integral to strategy, and difficulty in understanding payoff and risks by retail investors. Therefore, despite being UCITS, the leverage and structure cause it to be complex under MiFID II rules."
}