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February 17, 2009

Automated Customer Account Transfer Service (ACATS)

Your Guide



A system that facilitates the automated movement of account balances between financial institutions.

Typically, the entire account balance must be moved in order for the movement to occur through the ACAT system.

Firms must be a qualified National Securities Clearing Corporation (NSCC) settling member or Depository Trust Company (DTC) member bank in order to use the ACAT system.

ACATS transfers are subject to Rule 412 of the NYSE’s Rules (“Customer Account Transfer Contracts”) . Rule 412 prescribes procedures for member organizations to transfer customer accounts. It requires use of the Automated Customer Account Transfer Service (“ACATS”), an electronic system administered by the National Securities Clearing Corporation (“NSCC”) to facilitate the transfer of customer account assets from one broker-dealer or bank to another broker-dealer or bank, where both the carrying and receiving broker-dealers are members of NSCC. Since ACATS inception in 1985, numerous enhancements to it and to Rule 412 have allowed for faster and more efficient transfers of customer accounts. For example, the most recent amendments to the Interpretation of Rule 412 provided for the expedited transfer of accounts containing third party or proprietary products (e.g., mutual funds) Cite: SEC Release No. 34-49415; File No. SR-NYSE-2003-29

Typically, an ACATS transfer is initiated by the receiving financial institution. The receiving financial institution inputs the transfer request into the ACATS system, and the request is transmitted to the delivering financial institution.

For firms that are not qualified NSCC settling members or DTC member banks, the Non-ACATS procedure must be used. The Non-ACATS procedure is also used for qualified NSCC settling members or DTC member banks if less than the entire account balance is being transferred.

The Non-ACATS transfer procedure is not automated (it is a manual process) and can take much longer than the ACATS procedure. The Non-ACATs procedures are not subject to the stringent time limitations to which ACATS transfers are subject. These stringent time limitations ensure that clients’ accounts are transferred on a timely basis.

Referring Cite,SEC Release No. 34-49415; File No. SR-NYSE-2003-29

Additional Helpful Information

  • Detailed definition from DTC: The Automated Customer Account Transfer Service.
    This includes information about :

      • Overview
      • Who Can Use the Service
      • Benefits
      • How the Service Works

ACATS Process Flow
ACATS for Banks
ACATS Schematic

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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