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

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

The ACATS was designed and developed by The National Securities Clearing Corporation (NSCC) to replace a previous manual asset transfer system.

In order to use the ACATS, firms must be members of the National Securities Clearing Corporation (NSCC), and for banks to use the system 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.”

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

Options, stocks, cash, trusts, bonds, and other investment products are all capable of being exchanged using the ACATS system.

The system reduces the costs associated with transaction settlements and provides a standardized procedure that can process settlements quickly.

ACATS is linked with the NSCC’s Fund/SERV system, which processes and settles mutual fund transactions. It helps speed up the re-registration of fund positions when a customer account is transferred between firms.

ACATS is linked with the NSCC’s Insurance Processing Service (IPS) allowing insurance carriers to have the necessary information to register insurance assets that have been exchanged between two brokerage firms.

The benefits of ACATS

  • 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.
  • It can handle multiple processing cycles.
  • It accelerates settlements.
  • It can help save costs.

According to the US Securitied and Echange Commission (SEC):

“Most account transfers between brokerage firms are made using the Automated Customer Account Transfer Service (or “ACATS”) system. The National Securities Clearing Corporation operates ACATS, and both the New York Stock Exchange and the National Association of Securities Dealers, Inc. require their member firms to use ACATS.”

“These rules require firms to complete various stages of the transfer process within a limited period of time. 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.”