A One-Stop Solution to Track & Reclaim Forgotten Mutual Fund Investments

In a major step towards safeguarding investor interests and improving financial transparency, the Securities and Exchange Board of India (SEBI) has launched the MITRA platform through a circular dated February 12, 2025. This user-friendly initiative is designed to assist investors in tracking and reclaiming their inactive and unclaimed Mutual Fund folios. Developed by Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited, MITRA serves as a centralized search tool that enables investors, nominees, and legal heirs to identify forgotten investments and update their KYC details. By bridging the gap between investors and their rightful holdings, the platform enhances security, reduces the risk of fraud, and ensures greater transparency within the mutual fund industry.

a) Background and Rationale

Many Mutual Fund investors lose track of their investments, particularly those made in physical form with minimal KYC details. Investments in open-ended growth option mutual fund schemes often remain untouched for years, unless the investor, nominee, or legal heir approaches the concerned Asset Management Company (AMC) for redemption, transfer, or transmission.

Additionally, the absence of crucial details like PAN, email ID, or a valid address can prevent these folios from appearing in the Consolidated Account Statement (CAS), making them more vulnerable to fraudulent redemptions. To address these challenges, MITRA provides a simple and effective search mechanism to help investors recover their forgotten investments.

b) What is the MITRA Platform?

The Mutual Fund Investment Tracing and Retrieval Assistant (MITRA) is a platform that enables investors to recover their inactive and unclaimed mutual fund folios. It helps investors, nominees, and legal heirs trace investments that might have been forgotten due to incomplete KYC details or irregular monitoring. By offering an easy-to-use interface, MITRA ensures quick access to unclaimed investments while protecting them from potential fraud.

c) Key Features of the MITRA Platform

Developed by Registrar and Transfer Agents (RTAs), the MITRA platform acts as a centralized database for inactive and unclaimed mutual fund folios across the industry. It serves multiple purposes, including:

• Identification of Unclaimed Investments – Investors can track overlooked or unclaimed investments made by themselves or on their behalf.
• Encouragement for KYC Compliance – MITRA encourages investors to update KYC details as per current norms, reducing non-KYC-compliant folios.
• Reduction of Unclaimed Folios – The platform helps reduce the number of unclaimed mutual fund folios.
• Enhanced Transparency – MITRA contributes to a more transparent and efficient financial system.
• Fraud Risk Mitigation – It promotes safeguards against fraudulent redemptions and misuse of inactive folios.

d) Classification of Inactive Mutual Fund Folios

A mutual fund folio is classified as inactive if there have been no investor-initiated transactions (financial or non-financial) in the last 10 years, yet a unit balance remains in the account.

Inactive folios include cases where investors have chosen to remain invested in an open-ended scheme but either lost track of their investments or deliberately avoided redemption. MITRA will list such folios to encourage rightful owners to claim their investments and update KYC records.

e) Hosting and Cybersecurity Framework of MITRA

The MITRA platform will be jointly hosted by two Qualified RTAs (QRTAs) – CAMS and KFIN Technologies Limited – who will act as agents of AMCs. The platform will be accessible through:

• MF Central,
• AMC websites,
• The Association of Mutual Funds in India (AMFI),
• The two QRTAs, and
• SEBI’s website.

To ensure robust security, MITRA will adhere to SEBI’s Cyber Resilience framework outlined in the Master Circular on Mutual Funds dated June 27, 2024. The QRTAs will be responsible for conducting system audits, cybersecurity audits, and complying with Business Continuity Plan (BCP) and Disaster Recovery (DR) guidelines.

f) Awareness Regarding the MITRA Platform

SEBI has instructed AMCs, QRTAs, Registered Investment Advisors (RIAs), and Mutual Fund Distributors to actively promote MITRA among investors. The platform must become operational within 15 working days from the date of issuance of the circular. Additionally, a beta version will be released for two months to allow for testing and refinements.

g) Role of the ‘Unit Holder Protection Committee’ (UHPC) in Strengthening Investor Protection

To enhance investor protection, SEBI has revised the responsibilities of the Unit Holder Protection Committee (UHPC) as per its Master Circular on Mutual Funds dated June 27, 2024. The UHPC will now oversee:

• Reviewing inactive folios and unclaimed dividend and redemption amounts,
• Ensuring that AMCs take necessary steps to reduce unclaimed funds,
• Facilitating the use of MITRA to help investors trace their inactive and unclaimed Mutual Fund folios.

h) Conclusion

The launch of MITRA marks a significant milestone in strengthening investor protection and financial transparency in the mutual fund industry. By enabling investors to track inactive and unclaimed folios while promoting KYC compliance, MITRA helps safeguard investments from fraud and mismanagement. With SEBI’s proactive measures and industry-wide collaboration, the platform is set to streamline the process of reclaiming forgotten investments, thereby enhancing investor confidence in Mutual Funds.