The market regulator SEBI has proposed the creation of a service platform to assist investors in tracking down inactive and unclaimed mutual fund folios. The RTAs will construct the planned technology, MITRA (Mutual Fund Investment Tracing and Retrieval Assistant), which will provide investors with a searchable database of inactive and unclaimed mutual fund folios across the sector.
The tool will enable investors to find neglected assets or investments made by others for which they may have a valid legal claim. It will encourage investors to complete KYC in compliance with existing requirements, reducing the number of folios that are not KYC-compliant. The platform's database will also help to reduce the amount of unclaimed mutual fund accounts.
In other words, the platform wants to encourage investors to look for forgotten mutual fund assets and update their KYC to comply with current rules.
The market regulator has established criteria for categorizing mutual fund portfolios as inactive. An inactive folio has the following classification: "Mutual Fund Folio(s) where no investor-initiated transactions (financial or non-financial) have occurred in the last 10 years, although a unit balance remains."
Inactive folios are ones in which an investor stayed invested in an open-ended program but elected not to redeem or lost sight of the investment. There will be no repercussions for folios displayed on the site when the unitholder is aware of the investment and has chosen to stay invested.
The platform will be hosted jointly by two Qualified RTAs (QRTAs), Computer Age Management Services Limited (CAMS) and KFIN Technologies Limited, both of which function as AMC agents. It will be made available through links on the websites of MF Central, AMCs, AMFI, the two QRTAs, and SEBI.
The QRTAs share responsibility for maintaining compliance with all applicable rules, including system and cybersecurity audits. Additionally, the QRTAs must ensure that the platform follows SEBI's Business Continuity Plan (BCP) and Disaster Recovery (DR) criteria, which are specific to Market Infrastructure Institutions.
