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Automated customer account transfer service (ACATS) – definition and meaning

The Automated Customer Account Transfer Service or ACATS is an automated system that helps facilitate the transfer of assets from one trading account to another.

The National Securities Clearing Corporation (NSCC) designed and developed ACATS to replace a previous asset transfer system. Before this system, there was a manual one.

Only companies that are members of the National Securities Clearing Corporation (NSCC) can use ACATS. For banks, on the other hand, they must be members of the Depository Trust & Clearing Corporation (DTCC).

The DTCC defines the ACATS as:

“A system that automates and standardizes procedures for the transfer of assets in a customer account from one brokerage firm and/or bank to another.”



Automated Customer Account Transfer Service – features

ACATS offers a more streamlined and efficient transfer of securities between different firms and banks.

Traders can exchange options, stocks, cash, trusts, bonds, and other investment products using the ACATS system.

The system reduces transaction settlement costs. Additionally, ACATS provides a standardized procedure that can process settlements quickly.

ACATS links with the NSCC’s Fund/SERV system. The NSCC’s Fund/SERV system processes and settles mutual fund transactions. It helps speed up the re-registration of fund positions when a customer transfers accounts between firms.

ACATS also links with the NSCC’s Insurance Processing Service (IPS). IPS allows insurance carriers to have the necessary information to register insurance assets that two brokerage firms have exchanged.

ACATS benefits

– It provides a centralized and standardized system that automates and accelerates the transfer of customer accounts between members.

– The transfer of customer accounts for members complies with FINRA requirements.

– Not only can the service handle a single processing cycle, but also multiple ones.

– It accelerates settlements.

– It can help save costs.

Automated customer account transfer service - ACATSThe Automated Customer Account Transfer Service helps facilitate the swift transfer of assets between trading accounts.

The US Securities and Exchange Commission (SEC) says that most account transfers between brokerage firms use ACATS. NSCC operates ACATS.

Both the National Association of Securities Dealers Inc. and NYSE require members to use ACATS. NYSE stands for the New York Stock Exchange.

According to the SEC:

“These rules require firms to complete various stages of the transfer process within a limited period. If the transfer is made through ACATS, and there are no problems, the transfer should take no more than six business days to complete from the time your new firm enters your form into ACATS.”