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, with 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, on the combined corpus of 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	Not required	Not required	Not required
Threat Hunting	Not required	Not required	Not required
Cyber Drill	Annual	Annual	Annual
CCI	Not required	Not required	Not required
ISO 27001	Not required	Not required	Not required
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. That crossing activates mandatory M-SOC (the 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, placing the manager in the 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.