The Securities and Exchange Board of India (SEBI) has proposed the launch of a new platform aimed at helping investors trace inactive and unclaimed Mutual Fund (MF) folios. The service, called MITRA (Mutual Fund Investment Tracing and Retrieval Assistant), will allow investors to track their overlooked or forgotten MF investments.
Addressing investor concerns
Over the years, many mutual fund investors lose track of their investments. This can happen if investments were made in physical form with minimal KYC details, or if the investor’s personal information is out of date.
In some cases, these investments can remain in open-ended growth option schemes indefinitely until the investor or their nominee approaches the concerned Asset Management Company (AMC) for redemption or transfer.
Due to missing KYC details such as PAN or a valid email address, these folios may not even appear in a unitholder’s Consolidated Account Statement.
SEBI’s new platform is intended to address this issue by creating an industry-level, searchable database of inactive and unclaimed MF folios.
How MITRA will help investors
The MITRA platform, developed by SEBI in collaboration with the two leading RTAs (Registrar and Transfer Agents) — CAMS and KFIN Technologies — will provide the following benefits to investors:
Identify forgotten investments: Investors can search for old or forgotten investments made under their name, or discover investments made by others that they may be the rightful claimant of.
Encourage KYC compliance: By encouraging investors to update their KYC details, the platform aims to reduce the number of non-compliant folios.
The platform will contribute to a more transparent financial ecosystem by helping investors find their inactive or unclaimed investments.
Minimise fraud risks: The platform will incorporate safeguards to reduce the risk of fraudulent redemptions.
Defining inactive folios
The draft circular defines an “inactive folio” as a mutual fund folio where no investor-initiated transactions (financial or non-financial) have occurred in the last 10 years, but there is still a balance in the units.
These inactive folios may belong to investors who have either forgotten about their investments or simply chosen not to redeem them.
The platform aims to encourage investors to track down such investments and update their KYC details, but there will be no consequences for those who are aware of and choose to keep their investments active.
Launch timeline
The platform will be jointly hosted by CAMS and KFIN Technologies, and accessible through several platforms, including MF Central, AMCs, and AMFI websites.
The beta version of the service is expected to be launched within the next few months for a two-month trial period.
AMCs, RTAs, and Mutual Fund distributors will be required to raise awareness about the new platform among investors.
SEBI is now inviting public comments on the draft circular. Investors, industry professionals, and other stakeholders can submit their feedback by January 7, 2025.
The feedback can be submitted online via the SEBI website.
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