16. Domestic Fund Criteria

(1) A Domestic Fund shall be constituted as a Public Fund if:
(a) some or all of its Units are offered to investors by way of a public offer; or
(b) its Unitholders include, or may include, Retail Clients.
(2) A Domestic Fund may be constituted either as an Exempt Fund or as a Qualified Investor Fund but only if that Fund satisfies all of the conditions in Article 16(4) or (5) as applicable.
(4) A Domestic Fund is an Exempt Fund, subject only to Article 16(6), if:
(a) its Units are offered to persons only by way of a Private Placement;
(b) all its Unitholders are persons who meet the criteria to be classified as Professional Clients; and
(c) the initial subscription to be paid by a person to become a Unitholder is at least US$50,000;

and it does not satisfy the conditions in Article 16(5) to be a Qualified Investor Fund.
(5) A Domestic Fund is a Qualified Investor Fund, subject only to Article 16(6), if:
(a) it has 50 or fewer Unitholders;
(b) its Units are offered to persons only by way of a Private Placement;
(c) all its Unitholders are persons who meet the criteria to be classified as Professional Clients; and
(d) the initial subscription to be paid by a person to become a Unitholder is at least US$500,000.
(6) A Domestic Fund does not cease to be an Exempt Fund or a Qualified Investor Fund under Article 16(4) or (5) merely because one or more Units in that Fund is registered in the name of a person who does not meet the criteria to be a Unitholder of that particular type of Fund as a result of:
(a) inheritance from a registered Unitholder of the Fund; or
(b) any legal action brought for or against a registered Unitholder.
(7) The DFSA shall, by Rules, prescribe:
(a) the relevant criteria for a person to be classified as a Retail Client or a Professional Client; and
(b) any other requirements or matters which the DFSA considers necessary to give effect to the requirements or intent of the provisions in this chapter.