MUMBAI: Markets regulator Sebi plans to set up a portal through which investors can trace their mutual fund investments that they may have lost track of for several years. At times investments become dormant and remain unclaimed for various reasons like unavailability of PAN when the investment was done years ago, change of address or inactivity for some other reasons.
Sebi plans to mandate CAMS and KFintech, the two leading registrar & transfer agents (RTAs), to set up MITRA (Mutual Fund Investment Tracing and Retrieval Assistant), a portal that would assist investors in tracing such investments.
The regulator on Tuesday came out with a draft circular to this effect. It has asked the general public to send in their comments and suggestions on this circular by Jan 7.
MITRA would be able to assist investors to locate forgotten MF investments, ensure current KYC compliance, and implement protective measures against fraudulent withdrawals. This would help reduce unclaimed mutual fund accounts and enhance transparency in the financial system, Sebi said.
At times, MF investors lose track of their investments, particularly those made physically with minimal KYC information over the years. In open-ended schemes with growth options, investments can remain indefinitely until the investor, nominee, or a legal heir contacts the fund house for withdrawal or transfer. These MF accounts might not appear in the unitholder’s consolidated account statement due to missing PAN, email ID, or a valid address, Sebi observed.
Inactivity in such accounts might result from investors forgetting their investments or due to their demise, making these accounts vulnerable to fraudulent claims. Sebi aims to bring down such risks and also make it easier for people or legal heirs to claim such investments smoothly.
Sebi proposed that MITRA would be able to provide investors with a searchable database of inactive and/or unclaimed Mf folios at an industry level. While CAMS and KFintech would jointly manage the platform, it would be accessible via websites of the two RTAs, MF Central, AMCs, AMFI, and Sebi. “The (RTAs) would share responsibility for regulatory compliance, including system and cybersecurity audits,” Sebi said.
