Quick Answer
Customer account transfers move whole accounts or designated assets from one broker-dealer to another. The receiving member obtains authorized instructions and uses the Automated Customer Account Transfer Service when applicable. The carrying member has one business day to validate or take an allowed exception, then three business days to complete a validated transfer.
Account transfers begin with the customer's authorized instruction to the receiving member. The method depends on whether the automated transfer process applies.
Transfer Methods and Instructions
| Transfer type | Processing approach |
|---|---|
| Automated Customer Account Transfer Service (ACATS) | Automated broker-to-broker account-transfer process. |
| Non-ACATS transfer | Transfer outside ACATS using authorized alternate instructions or another permissible process. |
- Whole transfer: Moves all account assets.
- Partial transfer: Moves specifically designated assets.
- Authorized instructions: The customer provides them to the receiving member for the requested transfer.
Exam Tip: Gotchas
- ACATS is not synonymous with every account transfer. A partial transfer may be processed outside ACATS using authorized alternate instructions.
Responsibilities and Timing
| Participant or step | Requirement |
|---|---|
| Receiving member | Promptly submits an authorized broker-to-broker transfer instruction through ACATS when the process applies. |
| Carrying member | Validates the instruction or takes an allowed exception within one business day. |
| Validated transfer | Completed by the carrying member within three business days. |
| Both members | Expedite and coordinate authorized asset transfers, including transfers outside ACATS. |
Authorized instruction -> receiving member submits -> carrying member validates or takes an allowed exception within one business day -> carrying member completes a validated transfer within three business days.
Exam Tip: Gotchas
- The one-business-day period is for validation or an allowed exception. The three-business-day period is for completing a validated transfer.
- A transfer outside ACATS still requires the carrying and receiving members to expedite and coordinate the authorized transfer.
Residual Processing
- Residual credit: Cash or securities that accrue after an account transfer has been completed.
- Residual credit processing: Transfers residual cash and securities from the carrying member to the receiving member when the automated facility can perform that function.
Exam Tip: Gotchas
- A completed account transfer can still produce a residual credit. Residual processing moves later-accruing cash or securities when the automated facility can do so.