Automated Customer Account Transfer Service (ACATS)

What Is the Automated Customer Account Transfer Service (ACATS)?

The Automated Customer Account Transfer Service (ACATS) is a system that works with the transfer of securities starting with one trading account then onto the next at an alternate brokerage firm or bank. The National Securities Clearing Corporation (NSCC) developed the ACATS system, supplanting the previous manual asset transfer system with this completely automated and normalized one.

How the Automated Customer Account Transfer Service (ACATS) Works

The ACATS system is initiated when the new getting firm has the client sign the suitable transfer documents. When the document is received neat and tidy, the getting firm presents a request utilizing the client's account number and sends it to the conveying firm. Assuming that the information matches between both the conveying firm and the getting firm, the ACATS interaction can start. The cycle takes as a rule takes three to six business days to complete.

The ACATS improves on the method involved with moving starting with one brokerage firm then onto the next. The conveying firm transfers the specific holdings to the getting firm. For instance, assuming the client had 100 shares of Stock XYZ at the conveying firm, then the getting firm gets a similar amount, with a similar purchase price. This makes it more helpful for clients as they don't have to liquidate their positions and afterward repurchase them with the new firm. Another benefit is that clients don't have to let their previous brokerage firm or advisor know ahead of time. On the off chance that they are discontent with their current broker, they can basically go to another one and begin the transfer interaction.

Eligible Securities for ACATS

Clients can transfer all publicly traded stocks, exchange-traded funds (ETFs), cash, bonds, and most mutual funds through the ACATS system. ACATS can likewise transfer certificates of deposit (CDs) from banking institutions through the ACATS system, for however long it is a member of the NSCC. ACATS likewise chips away at a wide range of accounts, for example, taxable accounts, individual retirement accounts (IRAs), trusts, and brokerage 401(k)s.

Ineligible Securities for ACATS

There are several types of securities that can't go through the ACATS system. Annuities can't transfer through the system, as those funds are held with an insurance company. To transfer the agent of record on an annuity, the client must finish up the right form to roll out the improvement and start the cycle.

Other ineligible securities rely upon the regulations of the getting brokerage firm or bank. Numerous institutions have proprietary investments, for example, mutual funds and alternative investments that might should be liquidated and which may not be accessible for repurchase through the new broker. Likewise, a few firms may not transfer unlisted shares or financial products that trade over the counter (OTC).

Features

• The Automated Customer Account Transfer Service can be utilized to transfer stocks, bonds, cash, unit trusts, mutual funds, options, and other investment products.
• The system might be required when an investor needs to move their account from Broker Company A to Broker Company B.
• Just NSCC-eligible members and Depository Trust Company member banks can utilize the ACATS system.