Good news for mutual fund (MF) investors! The Securities and Exchange Board of India (SEBI) has proposed a new platform to help investors trace inactive and unclaimed mutual fund folios.
This platform, called the Mutual Fund Investment Tracing and Retrieval Assistant (MITR), will be developed by the Registrar and Transfer Agent (RTA).
Benefits of the Proposed Platform
The MITR platform aims to simplify the process for investors to:
1) Search for forgotten or unclaimed mutual fund investments.
2) Update their KYC details to meet current standards.
3) Incorporate security features to prevent fraudulent encashment.
By reducing the number of unclaimed mutual fund accounts, this initiative will promote a more transparent financial ecosystem.
Why Investors Lose Track of Mutual Funds
SEBI explained that many investors fail to keep track of their investments, especially when:
1) Investments are made in physical form with minimal KYC information.
2) Open-ended growth mutual funds remain active indefinitely until redeemed or transferred by the investor, their nominee, or legal heir.
The Issue of Inactive Accounts
Inactive accounts typically result from missing PAN, email ID, or a valid address, preventing these folios from appearing in a consolidated account statement. Such accounts are more susceptible to fraud.
To tackle this, SEBI has proposed the MITR platform, which will be managed jointly by two RTAs: CAMS
and KFin Technologies Limited. Public comments on this proposal are open until January 7
