Customer Account Transfers
Most transfers of customer accounts from one brokerage firm (the "carrying firm") to another (the "receiving firm") occur through the Automated Customer Account Transfer Service (ACATS), an electronic transfer system developed by the National Securities Clearing Corporation (NSCC) to automate and standardize the transfer of accounts. When it is not possible to use ACATS, either because the assets in the account are not transferable through ACATS, or because one or both of the parties to the transfer do not participate in ACATS, customer account transfers are handled manually. Manual transfers follow similar procedures, but can take longer than those occurring electronically.
In either case, a customer account transfer begins when a customer completes and submits a Transfer Initiation Form (TIF) to the receiving firm. If the transfer is via ACATS, the receiving firm electronically enters specified data from the TIF, including the customer's name, social security number and account number, into ACATS. If the submitted data meets ACATS minimum requirements, then the ACATS system electronically informs the carrying firm of the transfer instruction. If the data submitted does not meet ACATS's minimum requirements, the system automatically rejects the transfer instruction. Upon receiving a transfer instruction via ACATS, the carrying firm must either validate or take exception to the instruction within three business days. FINRA Rule 11870 governs the customer account transfer process.
While there may be legitimate reasons why some transfers take longer than others, including the fact that some transfers cannot occur via ACATS, customers have the right to move their accounts freely, and should generally be able to expect that to happen quickly and efficiently. The fast and efficient transfer of customer accounts is of critical importance to both the industry and investors. Investors have the right to decide the best business location for meeting their investment services needs, and both they and the industry as a whole suffer when that right is impeded for any reason.