Automated Customer Account Transfer Service (ACATS)

Automated Customer Account Transfer Service (ACATS)

ACATS is an automated system that moves securities and cash between brokerage accounts at different firms. Developed by the National Securities Clearing Corporation (NSCC), it replaces manual transfers with a standardized electronic process that reduces time, cost, and human error. In the UK and Ireland, a similar function is handled by CREST.

Key takeaways

• ACATS transfers stocks, bonds, ETFs, cash, most mutual funds, options, annuities, and eligible CDs between member firms.
• Only NSCC-eligible broker/dealer members and Depository Trust Company (DTC) member banks can use ACATS.
• Typical delivery time is three to six business days after the receiving firm submits the transfer request.
• Some brokerages charge an outbound (ACAT out) fee for transfers.
• Retirement accounts (IRAs, 401(k) rollovers) often require extra validation and can take longer.

How ACATS works — step by step

1. The investor opens an account at the receiving (new) firm and signs transfer paperwork.
2. The receiving firm submits a Transfer Information (TI) record with the customer’s account details to the delivering (old) firm via ACATS.
3. The delivering firm has one business day to accept the request, list assets to be transferred, or reject it.
4. A review period follows while both firms confirm which assets will move.
5. If accepted, the assets are electronically delivered to the receiving firm—generally within three to six business days.

If account information or tax status (especially for IRAs) must be validated, the transfer can be delayed to prevent errors that might trigger taxable events.

What can be transferred

Eligible assets commonly include:
* Publicly traded stocks and bonds
Exchange-traded funds (ETFs)
Cash balances
Most mutual funds (some exceptions; see below)
Options and annuities (subject to firm rules)
Certificates of deposit (if the bank is an NSCC member)
Account types: taxable accounts, IRAs, trusts, and many employer-sponsored plans

Always confirm with your broker whether a particular holding or account type is ACATS-eligible.

What cannot be transferred (common limitations)

Ineligibility often depends on the receiving firm’s policies. Typical examples:
* Proprietary or nontransferable mutual funds and some alternative investments that must be liquidated.
Unlisted or certain over-the-counter (OTC) securities that the receiving firm won’t accept.
Products requiring special custodial arrangements or that are not supported by the receiving firm.

If a holding is ineligible, you may need to liquidate it at the delivering firm before transfer—be mindful of potential tax consequences and transaction costs.

ACATS vs. manual (non-ACATS) transfers

• Speed: ACATS usually completes in 3–6 business days; manual transfers can take weeks or longer.
• Accuracy: Automated processing reduces typos and human errors common in manual transfers.
• Coverage: Some transfers still require manual handling when assets are ineligible or require special documentation.

Fees and practical considerations

• Some brokerages charge an ACAT out fee to discourage account closures. Not all firms charge this—check before initiating a transfer.
• Confirm whether the receiving firm will accept all holdings or whether certain positions must be sold.
• For retirement accounts, ensure account type and beneficiary designations match to avoid delays or tax issues.
• Notify parties as needed (e.g., financial advisors) if required by contract or service agreements.

Bottom line

ACATS simplifies and speeds the transfer of eligible securities between brokerage firms when both are NSCC/DTC members. It avoids the need to liquidate positions and reduces transfer errors. Before initiating a transfer, verify eligible holdings, check for outbound fees, and confirm any special requirements for retirement or proprietary assets.

Sources: FINRA; U.S. Securities and Exchange Commission; DTCC; GOV.UK (CREST).