In December 2013, the Dubai Financial Services Authority (the “DFSA”) issued its Consultation Paper on Qualified Investor Exempt Funds (the “Consultation Paper”), which proposed the introduction of a new category of Domestic Funds in the Dubai International Financial Centre (the “DIFC”). 

The key parameters for the proposed Qualified Investor Exempt Funds or QIEF are that a  QIEF has: (a) 50 or fewer unitholders; (b) its units offered only by way of private placement; (c) only unitholders classified as professional clients; and (d) a minimum subscription of at least USD 1 million. The DFSA believes that the combination of the small number of investors who can participate in the QIEF with the proposed minimum subscription amount provides sufficient differentiation between QIEFs and the existing regime of Exempt Funds, allows sufficient flexibility for fund managers, and is sufficient to justify the regulatory treatment of QIEFs proposed, as further described in our briefing.   The consultation closed on 20 February 2014, and the DFSA is considering whether further amendments are required to the proposals.