 "What is MITRA? Platform proposed by Sebi to track inactive mutual funds")
The Securities and Exchange Board of India (Sebi) on Tuesday released a consultation paper for a draft circular proposing a ‘service platform for investors to trace inactive and unclaimed mutual fund folios’ called MITRA - mutual fund investment tracing and retrieval assistant. The initiative aims to address concerns over forgotten investments and enhance investor protection.
The proposed platform will be developed jointly by two qualified registrar and transfer agents (QRTAs): Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited. The platform will aim to:
- Allow investors to trace overlooked investments or identify rightful claims.
- Encourage investors to update ‘know your customer’ (KYC) details, reducing non-KYC-compliant folios.
- Reduce the volume of unclaimed mutual fund investments.
- Enhance transparency and mitigate risks of fraud in the mutual fund ecosystem.
- Serve as a reliable, industry-level searchable database for inactive and unclaimed folios.
Why does Sebi need this MITRA platform?
Over the years, many investors have lost track of their mutual fund investments, often due to physical form holdings, incomplete KYC details, or lack of updated PAN, email IDs, or valid addresses. As a result, such folios might not appear in the investor’s consolidated account statement (CAS), increasing the risk of fraudulent redemptions, Sebi said in its consultation paper.
Sebi defines inactive folios as “mutual fund folio(s) where no investor-initiated transactions (financial or non-financial) have taken place in the last 10 years, but unit balance remains available.”
When will this platform be active?
A beta version will be operational for two months before full implementation. Sebi did not specify the exact amount of days it may take for the platform to go live after the final circular is released.
Features of the MITRA platform
The platform will be accessible through MF Central, websites of Asset Management Companies (AMCs), Association of Mutual Funds in India (AMFIs), the two QRTAs, and Sebi.
Cybersecurity and resilience frameworks, as outlined in Sebi’s Master Circular on Mutual Funds (June 27, 2024), will apply to the platform.
QRTAs will be jointly responsible for compliance with cybersecurity, system audits, business continuity plans, and disaster recovery guidelines. AMCs, QRTAs, AMFI, and mutual fund distributors will undertake investor awareness campaigns to promote the platform.