Sebi platform MITRA to help investors trace inactive mutual fund folios

Digital facility will help investors who have over time lost track of subscriptions due lack of updated contact information, other reasons

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The Securities and Exchange Board of India (Sebi) has introduced a digital platform that assists investors in tracking inactive and unclaimed mutual fund folios. Mutual Fund Investment Tracing and Retrieval Assistant (MITRA) will help with investments that may have been overlooked, lost, or left unclaimed due to outdated know your customer (KYC) details or the demise of the original investor, according to Sebi a circular dated February 12.

 

Need for MITRA

 

Mutual fund investors sometimes lose track of their investments, particularly those made in physical form with minimal KYC details. Subscribers of open-ended growth option schemes could lose track of their holdings, as such investments continue indefinitely unless redeemed or transferred. Outdated PAN details, defunct email IDs or addresses often prevent these folios from appearing in unit holders' consolidated account statements.

 

Key features of MITRA

 

MITRA, which has been developed by Registrar and Transfer Agents (RTAs), aims to empower investors by:

 

Helping them identify overlooked investments or those for which there are legal claimants.

 

Encouraging investors to complete KYC as per current norms.

 

Reducing the number of unclaimed mutual fund folios.

 

Promoting financial transparency and security.

 

Mitigating risks related to fraud in inactive folios.

 

Classification of inactive folios 

A mutual fund folio that has had no investor-initiated financial or non-financial transactions in 10 years is regarded as inactive, according to Sebi. Units remain in such an account. MITRA will list such folios to encourage rightful owners to claim their investments and update KYC records.

 

Implementation and cybersecurity

 

MITRA will be jointly hosted by two qualified RTAs (QRTAs) – Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited – who will act as agents of asset management companies (AMCs). The platform will be accessible through the websites of MF Central, AMCs, the Association of Mutual Funds in India (AMFI), the two QRTAs, and Sebi.

 

To ensure security, MITRA will adhere to Sebi’s cyber resilience framework as set in the regulator’s Master Circular on Mutual Funds dated June 27, 2024. The QRTAs will be responsible for system audits, cybersecurity audits, and compliance with Sebi’s Business Continuity Plan (BCP) and Disaster Recovery (DR) guidelines.

 

Awareness and implementation timeline 

Sebi has instructed AMCs, QRTAs, Registered Investment Advisors (RIAs), and mutual fund distributors to actively promote awareness of MITRA among investors. The platform will be operational within 15 working days of the circular’s issuance, with a beta version available for two months.

 

Regulatory framework and UHPC Role

 

As part of regulatory amendments, Sebi has updated the responsibilities of the Unit Holder Protection Committee (UHPC) under its Master Circular on Mutual Funds. The UHPC will now also review inactive folios alongside unclaimed dividends and redemptions, ensuring that necessary steps are taken to reduce unclaimed amounts. AMCs, through their RTAs, are required to facilitate MITRA for this purpose.