SEBI Introduces MITRA to Track Inactive Mutual Fund Folios, Managed by CAMS & KFin Tech

The market regulator has introduced the Mutual Fund Investment Tracing and Retrieval Assistant (MITRA) platform, which will be managed by two Qualified Registrar and Transfer Agents (QRTAs)—Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited—acting as agents on behalf of Asset Management Companies (AMCs).

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Why Is This Being Introduced?

This initiative aims to assist investors in locating their inactive mutual fund folios, which are defined as accounts where no financial or non-financial transactions have been initiated by the investor for a period of 10 years, despite having a unit balance. The QRTAs have been instructed to make the platform operational within 15 working days from the issuance of the circular dated February 12.

In its circular, the Securities and Exchange Board of India (SEBI) stated that MITRA will enable investors to identify overlooked investments or claims on mutual fund holdings made by others for which they might be the rightful legal beneficiaries.

Additionally, SEBI anticipates that this platform will encourage investors to complete the Know Your Customer (KYC) process, reducing the number of folios that remain non-compliant with KYC norms. This could also help minimize unclaimed mutual fund folios.

According to the circular, "Over the years, some investors have lost track of their mutual fund investments, particularly those made in physical form with minimal KYC documentation. Investments in open-ended growth option mutual fund schemes can remain intact indefinitely unless the investor, their nominee, or legal heir approaches the relevant AMC for redemption, transfer, or transmission."

It further highlighted that "due to the absence of a PAN, email ID, or valid address, some mutual fund folios might not be reflected in the unitholder’s Consolidated Account Statement (CAS). As a result, inactivity in these folios may stem from investors losing track of their investments, their demise, or other reasons, potentially making these inactive accounts vulnerable to fraudulent redemptions."

Regulatory Compliance and Security Measures

The MITRA platform will be jointly hosted by the two QRTAs and can be accessed through a dedicated link available on the websites of MF Central, AMCs, AMFI, the two QRTAs, and SEBI.

Both QRTAs will be jointly and individually accountable for ensuring compliance with all applicable regulations, including conducting system and cybersecurity audits. Moreover, they must ensure that the platform aligns with SEBI’s guidelines on Business Continuity Plan (BCP) and Disaster Recovery (DR), which apply to Market Infrastructure Institutions (MIIs).