Customer Account Transfers

Account transfers begin with authorized customer instructions. For a whole-account or designated-asset transfer through ACATS, the customer gives the instructions to the receiving member. For a partial transfer outside ACATS, authorized alternate instructions go to the carrying member. The carrying member may also receive a partial Transfer Instruction Form directly from the customer. The method depends on whether the automated transfer process applies.

Which Transfer Method and Instructions Apply?

• Whole transfer: Covers the account in whole, subject to the customer's disposition instructions for any nontransferable assets.
• Partial transfer: Moves specifically designated assets.
• Authorized instructions: The customer provides them to the receiving member for a whole-account or designated-asset transfer through ACATS.
• Authorized alternate instructions: For a partial transfer outside ACATS, the instructions go to the carrying member.

Exam Tip: Gotchas

• ACATS does not cover every account transfer. A partial transfer may be processed outside ACATS using authorized alternate instructions transmitted to the carrying member.

Who Submits the Transfer Instruction?

The receiving member immediately establishes an authorized instruction in ACATS.

Exam Tip: Gotchas

• Transfers outside ACATS still require coordination. The carrying and receiving members must expedite and coordinate the authorized transfer.

What Rules Apply When Any Transfer Is Validated?

• Upon validation of a whole or designated-part transfer, the carrying member attaches all securities positions, safekeeping positions, and money balances to be transferred as shown on its books.
• The carrying member may not take exception to a transfer instruction because of a dispute over positions or the money balance. It must transfer what its books show.

Exam Tip: Gotchas

• A position or balance dispute does not permit an exception. This restriction applies to whole and designated-part transfers.

What Happens When a Whole-Account Transfer Is Validated?

• The carrying member freezes the account by canceling open orders and accepts no new orders.

Exam Tip: Gotchas

• The receiving member cannot cherry-pick. A permitted rejection after validation applies to the entire account.

How Are Nontransferable Assets and Transfer Fails Handled?

• For a whole-account transfer containing a nontransferable proprietary product of the carrying member, the carrying member must provide the customer with a list and make its written request for further instructions.

What Happens to Residual Credits?

• 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.
• Ex-clearing residual credit: Each member must transfer an ex-clearing credit balance after it accrues.

Exam Tip: Gotchas

• Residual credits can arise after completion. Residual processing moves later-accruing cash or securities when the automated facility can do so.

What Should You Check on Exam Day?

• For a whole-account or designated-asset transfer through ACATS, start with the customer's authorized instruction to the receiving member. For a partial transfer outside ACATS, authorized alternate instructions go to the carrying member.
• Upon validation of a whole or designated-part transfer, attach all securities positions, safekeeping positions, and money balances to be transferred as shown on the carrying member's books.
• Do not let the carrying member take exception because of a dispute over positions or the money balance.
• For a whole-account transfer containing a nontransferable proprietary product of the carrying member, have the carrying member provide the list and request further instructions in writing.
• Transfer an ex-clearing credit balance after it accrues.