SEBI to launch MITRA platform to help investors trace inactive, unclaimed mutual fund investments

To help investors trace inactive and unclaimed mutual fund folios, markets regulator SEBI on Tuesday proposed the creation of a central platform named MITRA (Mutual Fund Investment Tracing and Retrieval Assistant).

The Securities and Exchange Board of India (SEBI), in a draft circular seeking public comments, said that over the years, many mutual fund investors lose track of their investments, especially when made in physical form with minimal KYC details. Such investments, primarily in open-ended growth schemes, often remain perpetually inactive and unclaimed until investors, nominees, or legal heirs approach Asset Management Companies (AMCs).

The proposed MITRA platform will allow investors to search for their inactive and unclaimed mutual fund investments at an industry level. The platform will be jointly developed and hosted by qualified Registrar and Transfer Agents (RTAs) — CAMS and KFin Technologies.

SEBI defined inactive folios as those where no investor-initiated transactions (financial or non-financial) have occurred in the last 10 years but units remain available.

"The inactive folios will include those folios where the investor might have remained invested in an open ended scheme and has either chosen not to redeem or simply might have lost track of the investment," the regulator said.

SEBI also clarified that there will be no consequence for those folios appearing in the platform where the unitholder is aware of the investment and has chosen to remain invested.

"The objective of the platform is to encourage the investors to search for forgotten MF investments and update KYC as per the current norms," it added.

According to SEBI, the platform will empower investors by helping them identify overlooked investments or claims they are legally entitled to and encourage them to complete KYC formalities as per current norms. The move is expected to reduce the number of non-KYC compliant and unclaimed folios and contribute to a more transparent financial ecosystem.

The platform, accessible via MF Central, AMC websites, AMFI (Association of Mutual Funds in India), and SEBI’s website, will be cyber-resilient and compliant with SEBI’s security and audit norms, as per the draft circular.