SEBI CSCRF for AIFs & VCFs: Manager-Level Corpus Rule

Alternative Investment Funds (AIFs) and Venture Capital Funds (VCFs) occupy a unique position in the CSCRF framework. The April 2025 amendment (CIR/2025/60 §2.7) rewrote their classification from per-fund to manager-level — a change that has significant implications for multi-fund managers.

Manager-level classification

Before April 2025, each individual AIF or VCF was classified independently based on its own corpus. The April 2025 amendment changed this: classification is now at the manager level — the sum of corpus across all AIFs, VCFs, and schemes managed by the same entity.

Tier	Combined corpus (INR crores)
Mid-size	>₹10,000 Cr
Small-size	>₹3,000 – ₹10,000 Cr
Self-cert	≤₹3,000 Cr

There is no Qualified RE tier for AIF+VCF managers. No matter how large the combined corpus, the maximum tier is Mid-size. This means AIF+VCF managers never carry half-yearly cyber audits, red-teaming, or threat-hunting obligations — even at scale.

The sub-100-client M-SOC exemption

Per CIR/2025/60 §2.7, Self-cert AIF+VCF managers with fewer than 100 clients are exempt from mandatory Market SOC onboarding.

This is a meaningful carve-out for niche AIF managers (e.g., a single-fund Category II AIF with 40 limited partners and a ₹800 Cr corpus). The manager is Self-cert by corpus, and the sub-100-client exemption lifts the M-SOC obligation — leaving only annual VAPT and annual cyber audit as the binding obligations.

What each tier requires

Obligation	Self-cert	Small-size	Mid-size
VAPT	Annual	Annual	Annual
Cyber Audit	Annual	Annual	Annual
Red Teaming	—	—	—
Threat Hunting	—	—	—
Cyber Drill	Annual	Annual	Annual
CCI	—	—	—
ISO 27001	—	—	—
IT Committee	Optional	Optional	Mandatory (quarterly + expert)
HSM	Risk-assessed alternative	Risk-assessed alternative	Risk-assessed alternative
M-SOC	Mandatory (own-SOC carve-out; sub-100 exempt)	Mandatory (own-SOC carve-out)	Eligible
RTO / RPO	Per CCMP	Per CCMP	Per CCMP

The key operational inflection point is crossing ₹3,000 Cr combined corpus — which activates mandatory M-SOC (sub-100-client exemption drops) and moves the entity from Self-cert to Small-size.

Multi-fund managers: the aggregation effect

A manager running:

• Category II AIF: ₹1,800 Cr corpus
• Category III AIF: ₹900 Cr corpus
• VCF: ₹500 Cr corpus

Previously (pre-April 2025), each fund was Self-cert independently. Under the manager-level rule, the combined corpus is ₹3,200 Cr — Small-size tier.

This is the most common reclassification scenario: a multi-fund manager that was comfortably Self-cert per-fund is now Small-size at the manager level, inheriting mandatory M-SOC and a Small-size audit cadence.

The AI Advisory: AIFs and VCFs are in scope

The May 2026 AI Advisory addresses all 19 RE categories, including AIFs and VCFs. If your manager evaluates or deploys AI/LLM tools, Annexure-A items 2 (AI-based VA tools), 7 (AI-aware risk scenarios), and 10 (long-term AI plan) apply.

Practical next steps

1. Sum your corpus across all AIFs, VCFs, and schemes managed. This is your classification basis. Do not classify per-fund.

2. Count your clients. If you are Self-cert and <100 clients, document the M-SOC exemption. If you are ≥100 clients and Self-cert, M-SOC becomes mandatory.

3. If approaching ₹3,000 Cr combined corpus. Prepare for Small-size — mandatory M-SOC, IT Committee consideration (optional but recommended), and Small-size audit cadences.

FAQ

Does the manager-level rule apply to classification for FY 2025-26 and FY 2026-27?

Yes. The April 2025 amendment (CIR/2025/60 §2.7) is effective from the circular's date (30 April 2025). Classification for both FY 2025-26 and FY 2026-27 uses the manager-level combined corpus — not per-fund.

Can an AIF manager ever be classified as Qualified RE?

No. CIR/2025/60 §2.7 defines three tiers (Self-cert, Small-size, Mid-size) with no QRE category for AIF+VCF managers.

What if my manager also operates as a Portfolio Manager?

The multi-category rule applies: the highest tier across all registrations governs. If your PM AUM places you in Mid-size and your AIF+VCF corpus places you in Small-size, you are classified as Mid-size.

Content current as of 2026-05-06. Source: docs/SEBI-CSCRF-FACTCHECK-2026-05-06.md.