Account Registration Changes and Internal Transfers

With your understanding of account types, registration, and wealth events complete, you can now learn the rules governing changes to existing accounts: name changes, transfers between firms, and re-registration.

Who Can Change an Account's Name or Designation?

• No change in account name(s) or designation(s) may be made unless authorized by a qualified and registered principal
• The principal must be personally informed of the essential facts before granting approval
• Approval must be indicated in writing on the order or similar record
• The essential facts relied upon must be documented in writing and preserved under the broker-dealer recordkeeping rules

When Must the Documentation Be Completed?

• For changes made before trade execution: documentation must be completed prior to execution
• This ensures no trades occur under incorrect account designations

Exam Tip: Gotchas

• Only a principal can approve account name/designation changes, not the registered representative (RR). The principal must be personally informed of the facts and give written approval.
• Pre-execution changes must be documented before the trade executes. If the documentation comes after, it is a violation.

How Does an ACAT Transfer Work?

ACAT is the industry system for transferring customer accounts between broker-dealers. It is operated by the National Securities Clearing Corporation (NSCC).

What Is the Transfer Timeline?

• Total timeline: Typically 4-6 business days from initiation to completion
• Both partial transfers (specific securities) and full account transfers are permitted
• Customers can also request internal transfers within the same firm (e.g., re-registration from individual to joint)
• Only transferable (ACAT-eligible) assets move through the system. Proprietary products and certain limited partnership interests are not ACAT-eligible and must be re-registered directly with the issuer or sponsor outside ACAT
• The delivering firm may only refuse to validate for specific reasons the rule allows, such as a name or account-number mismatch, a missing signature, or a Social Security/Tax ID mismatch. It may not take exception simply because it does not want to lose the account, and it may not dispute a security position or money balance instead of transferring it

Exam Tip: Gotchas

• ACAT transfers must be completed within 3 business days after validation, not 3 business days from the initial request. The delivering firm gets 1 business day to validate first, so the total minimum timeline is 1 + 3 = 4 business days from initiation.
• The receiving firm initiates the ACAT transfer, not the delivering firm. The customer signs the Transfer Initiation Form (TIF) at the new firm.
• "Customer retention" is not a valid reason to take exception. The delivering firm's list of allowed exceptions is limited to documentation, identification, and authorization problems, not a wish to keep the account.

What Is Required to Re-Register an Account?

• Moving assets between accounts at the same firm (e.g., from an individual account to a trust) requires principal approval under the account name-change rule
• Supporting documentation must be obtained:
  • Trust documents for transfer to a trust account
  • Death certificate and letters testamentary for estate transfers
  • Marriage certificate or court order for name changes
• The firm must update its records to reflect the new registration and provide the customer with an updated account record

What Documents Are Needed at Death?

The documents required depend on how the account was registered and whether there is a will:

• JTWROS or TBE: the surviving owner provides a death certificate, and the account is re-registered into the survivor's name. Letters testamentary are not needed because the assets pass by survivorship
• Individual or TIC, with a will: the executor provides a death certificate plus letters testamentary; the deceased's interest passes to the estate
• Individual or TIC, no will (intestate): the court-appointed administrator provides a death certificate plus letters of administration (the intestate equivalent of letters testamentary)

Exam Tip: Gotchas

• Re-registration at the same firm still requires principal approval under the account name-change rule, plus supporting documentation (trust documents, death certificate, court order, etc.). Moving assets between your own accounts is not a simple request.

What Should You Check on Exam Day?

• Confirm who can approve a name or designation change: a principal, never the RR alone, and only after being personally informed of the facts in writing
• Match the timeline math: 1 business day to validate + 3 business days to complete = 4 business days minimum for an ACAT transfer
• Remember the receiving firm initiates the transfer; the delivering firm can only take exception for a documentation, identification, or authorization problem, never to keep the customer
• Match each re-registration document to its trigger: death certificate alone for JTWROS/TBE survivorship, plus letters testamentary for a will, plus letters of administration when there is no will