Automated Customer Account Transfer Service (ACATS) (2024)

The Automated Customer Account Service (ACATS) is an electronic system in the U.S. that allows the smooth transfer of financial securities of a customer from the trading account of one institution to the trading account at another. The institutions are usually brokerage firms or banks.

Many different types of assets and investment products are transferred using ACATS, such as equities, bonds, unit trusts, annuities, options, mutual funds, and cash. For mutual fund transactions, ACATS is connected to the NSCC’s Fund/SERV system. The system facilitates fast re-registration of funds when account transfers take place.

Whereas, for the transfer of insurance assets, ACATS links with Insurance Processing Service (IPS) to provide information necessary for re-registration between two companies. A transfer through ACATS takes about six business days to process. However, ACATS transactions are not guaranteed and therefore, can be reversed if one of the parties in the transfer defaults.

The system was developed by the National Securities Clearing Corporation (NSCC), which went on to become a subsidiary of the Depository Trust and Clearing Corporation (DTCC). The system replaced a previous asset transfer system, which was a manual one.

DTCC is a private holding company that is owned by various banks and financial institutions that handle a majority of securities transactions in the US. Only companies that are members of the NSCC can use ACATS. Banks must be members of DTCC to use ACATS.

How Does an Automated Customer Account ServiceWork?

A standard account transfer between two broker-dealer members would follow the steps below:

1. The receiving member initiates the transfer by submitting a Transfer Information (TI) form to ACATS. The form is also known as a Transfer Initiation Form (TIF).
2. A control number is assigned by ACATS to the transfer for future reference. ACATS also informs both the delivering and the receiving member identified in the TIF. It also puts the requested transfer into the “REQUEST” status in the system. If the information submitted is incomplete or in the wrong format, ACATS rejects the request and informs the member that initiated the request.
3. The delivering member either adds the assets that are to be transferred or rejects the transfer. The member has one business day to respond to the output.
4. Once the delivering member adds the assets that are to be transferred, both parties to the transfer have the opportunity to check the assets that are selected. ACATS transfers the status to “REVIEW” and both the members have two business days to review the assets. In case the delivering member decides to add, delete, or modify the assets listed, ACATS transfers the status to “REVIEW-ADJUST-DELIVERER” and automatically provides an additional business day for both the parties to review the assets.
5. Due to the nature of mutual funds and insurance assets, the receiving member must submit the requisite mutual fund and insurance re-registration forms.
6. After the review period is complete, ACATS will move the account to “SETTLE PREP” status. The period lasts for one business day, and no party can make any further updates or changes to the transfer.
7. ACATS will then issue a report to both the parties informing them about the assets being settled in the transfer. The members will have settling interfaces, and ACATS will send the settling assets to the interfaces.
8. After the transfer, ACATS then moves the account to “SETTLE CLOSE” status in the system. Through NSCC’s money settlement, the delivering member will be debited the market value of the assets, and the receiving member will be credited with the market value of the assets.

The same procedure is followed, even if cash assets are involved. However, if one of the parties is a bank in a cash asset transfer, it settles through a Security Payment Order (SPO) at DTCC.

Benefits of ACATS

• ACATS is cost- and time-efficient.
• It complies with FINRA requirements.
• The service can easily handle multiple processing cycles.
• It accelerates settlements and is secure.

Additional Resources

CFI is the official provider of the certification program, designed to transform anyone into a world-class financial analyst.

In order to help you become a world-class financial analyst and advance your career to your fullest potential, these additional resources will be very helpful:

• Banking and Securities Industry Committee (BASIC)
• Managed Futures
• Financial Industry Regulation Authority (FINRA)
• Wire Transfer
• See all wealth management resources