The Securities and Exchange Board of India (SEBI) has introduced a new platform called MITRA (Mutual Fund Investment Tracing and Retrieval Assistant), designed to help investors locate inactive and unclaimed Mutual Fund (MF) folios. This initiative aims to address a common issue where investors lose track of their investments, often due to missing KYC details or outdated personal information.
Many investors have investments in mutual funds that remain forgotten or inactive, often because they were made without proper KYC or personal details were not updated. These funds may remain in open-ended schemes until the investor or their nominee contacts the Asset Management Company (AMC) for redemption. However, due to missing KYC information, these folios may not even appear in an investor’s Consolidated Account Statement.
To tackle this challenge, SEBI’s new MITRA platform will create an industry-level, searchable database of inactive and unclaimed MF folios. Developed in collaboration with CAMS and KFIN Technologies, the platform will allow investors to:
- Track forgotten investments: Search for old or overlooked investments, and even claim investments made by others that they may be entitled to.
- Encourage KYC updates: Help reduce the number of non-compliant folios by promoting KYC compliance.
- Enhance transparency: Foster a more transparent financial ecosystem by making it easier for investors to locate unclaimed investments.
- Reduce fraud risks: Implement safeguards to prevent fraudulent redemption of unclaimed investments.
The platform will define an “inactive folio” as one with no transactions for the last 10 years but still holds a balance. While the service will encourage investors to track and update their KYC details, it will not penalize those who have consciously kept their investments active.
The MITRA platform will be accessible through multiple channels, including CAMS, KFIN Technologies, MF Central, AMCs, and AMFI websites. A beta version of the platform is expected to be launched within a few months for a two-month trial period. SEBI is also seeking public comments on the draft circular by January 7, 2025, to refine the platform further.
This initiative is set to benefit investors by offering a user-friendly, comprehensive tool for tracing and reclaiming unclaimed investments, ultimately improving financial inclusion and transparency.
