The Securities and Exchange Board of India (SEBI) has introduced a new initiative called MITRA—Mutual Fund Investment Tracing and Retrieval Assistant. MITRA is a service platform designed to provide a searchable database of inactive and unclaimed mutual fund folios across the industry. With this platform, investors can now easily trace investments they may have forgotten about or investments made on their behalf, helping reduce the number of unclaimed investments and bringing more transparency to the financial ecosystem.
Why Does This Matter?
Over the years, mutual fund investments may remain overlooked, especially in open-ended growth option schemes. These schemes may perpetually stay invested unless the investor or their nominee/legal heir contacts the concerned Asset Management Company (AMC) for redemption or transfer. Due to the absence of vital details like PAN, email ID, or a valid address, some of these folios may not even appear in the investor’s Consolidated Account Statement. In some cases, the investor may have passed away, leaving the investment untouched.
Inactive folios can be a security concern, as they are susceptible to fraudulent activities. Additionally, they remain as a source of unclaimed amounts—dividends or redemptions—that could have been better utilized by rightful claimants. SEBI’s MITRA platform aims to bridge this gap by enabling investors to identify these overlooked investments and take necessary actions, such as updating KYC details, ensuring better compliance, and potentially reclaiming their unclaimed investments.
How MITRA Works
The MITRA platform is developed by the Registered Transfer Agents (RTAs), who are responsible for maintaining the records of mutual fund investments. It will be jointly hosted by two Qualified RTAs: Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited. The platform will be accessible via the websites of AMCs, AMFI, the QRTAs, and SEBI.
The key benefit of MITRA is its ability to identify inactive folios—those where no transactions have taken place in the last 10 years but still have a unit balance available. This could include investments that the investor has simply forgotten about or chosen not to redeem. Importantly, there is no penalty for investors who are aware of their investments and have chosen to leave them untouched. The platform merely aims to encourage investors to search for their lost investments, update their KYC, and reclaim what is rightfully theirs.
Encouraging Better KYC Compliance
One of the objectives of MITRA is to reduce the number of non-KYC-compliant folios. By encouraging investors to complete their KYC as per current norms, the platform helps foster a more compliant mutual fund ecosystem. This, in turn, will ensure that investors are more connected with their investments, making it easier for them to manage and access them when needed.
A Step Toward Financial Transparency
Besides reducing fraud risks and encouraging better KYC practices, MITRA will contribute to a more transparent financial ecosystem. By creating awareness and making it easier for investors to track inactive or unclaimed investments, the platform aligns with SEBI’s vision of a fair, transparent, and secure investment environment.
