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The Securities and Exchange Board of India (SEBI) has introduced the Mutual Fund Investment Tracing and Retrieval Assistant (MITRA) platform to assist investors in locating inactive and unclaimed Mutual Fund (MF) folios. Inactive investments typically arise from insufficient Know Your Customer (KYC) documentation or paperwork. This challenge is particularly pressing for open-ended schemes, where unclaimed folios can increase the risk of fraudulent activities. The MITRA platform acts as a centralized database, enabling investors to uncover overlooked investments while ensuring adherence to existing KYC regulations.
Inactive folios are defined as those with no investor-initiated transactions in the past ten years, despite still holding unit balances. The MITRA platform, developed in conjunction with Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited, will be available through multiple channels, including MF Central, Asset Management Companies (AMCs), the Association of Mutual Funds in India (AMFI), and SEBI.
Key features of the MITRA platform include:
An inactive folio is categorized under the provision as "Mutual Fund Folio(s) where no investor-initiated transaction(s) (financial and non-financial) have occurred in the last ten years, but unit balance is available." This includes investments remaining in open-ended schemes without any redemption requests from the investor.
The MITRA platform will function under the oversight of the two Qualified Registrar and Transfer Agents (QRTAs), CAMS and KFIN. It will be accessible via links on the websites of relevant stakeholders.
Cybersecurity Compliance: The platform will conform to cybersecurity standards as detailed in the SEBI Master Circular on Mutual Funds dated June 27, 2024. QRTAs are accountable for ensuring compliance with all regulatory requirements, including system audits and cybersecurity checks in accordance with SEBI’s Business Continuity Plan (BCP) and Disaster Recovery (DR) protocols.
Awareness Initiatives: AMCs, QRTAs, Registered Investment Advisors (RIAs), AMFI, and mutual fund distributors are encouraged to promote awareness about the MITRA initiative to investors.
Implementation Timeline: QRTAs are required to make the MITRA platform operational within 15 working days of the issuance of this circular, which follows a beta phase lasting two months.
In accordance with Regulation 25(24) of the SEBI (Mutual Funds) Regulation, 1996, AMCs must establish a Unit Holder Protection Committee (UHPC) responsible for safeguarding unit holder interests. The UHPC will monitor unclaimed dividends and redemptions while strategizing to minimize these amounts.
The revised clause 3(c) in ANNEXURE 15 outlining the UHPC's responsibilities includes the evaluation of inactive folios:
To fulfill the objectives of clause 4.3(c), AMCs, through their RTAs, will facilitate the MITRA platform for investors aiming to trace inactive and unclaimed Mutual Fund folios.
SEBI has partnered with DigiLocker to securely store mutual fund details, allowing nominees to automatically access holdings following the investor's demise. Investors can designate data access nominees to simplify the transmission process.
The beta version of MITRA was launched for two months prior to its full rollout, as stated in SEBI’s circular. The platform officially became operational by March 2025.
Heirs must provide a death certificate, KYC documents, and bank proof. Claims with nominations will be processed more swiftly than those involving multiple heirs, which require no-objection certificates.
This initiative is a crucial advancement in accordance with the powers vested under Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 77 of the SEBI (Mutual Funds) Regulation, 1996. It is designed to protect investor interests while enhancing the development, regulation, and transparency of the securities market.