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.
FINRA's Office of General Counsel (OGC) staff provides broker-dealers, attorneys, registered representatives, investors and other interested parties with interpretative guidance relating to FINRA’s rules. Please see Interpreting the Rules for more information.
- SEC Approval and Effective Date for New Consolidated FINRA Rules on the Transfer of Customer Accounts, Recommendations to Customers in OTC Equity Securities and Anti-Intimidation/Coordination
- SEC Approves Amendments to NASD Rule 11870 and NYSE Rule 412 to Conform with NSCC's ACATS Transfer Cycle Time Frames
- Impermissible Use of Negative Response Letters for the Transfer of Mutual Funds and Variable Annuities (Changes in Broker-Dealer of Record)
- SEC Grants Accelerated Approval of Rule Change Relating to Transfers of Specifically Designated Customer Account Assets through the Automated Customer Account Transfer Service (ACATS) (This version was updated on 8/19/04)
- Members' Obligations with Respect to the Transfer of Cost Basis Information
- Use of Negative Response Letters for the Bulk Transfer of Customer Accounts
- NASD Regulation Adopts Interpretive Material Prohibiting Interference With The Transfer Of Customer Accounts In The Context Of Employment Disputes
- NASD Regulation, Inc. Requests Comment On Proposed Interpretive Material IM-2110-7 Regarding Actions That Interfere With The Transfer Of Customer Accounts
- Interpretive LetterThe buy-in requirements under FINRA Rules 11810 and 11870 do not apply for the specified time period to securities identified on the DTC Master List of Inaccessible Certificates, provided that the member firm maintains a detailed record indicating the fail to deliver items related to the physical certificates identified on the DTC Master List of Inaccessible Certificates.December 21, 2012
- Report / StudyIn response to numerous customer complaints and industry frustration about delays in the transfer of securities accounts from one brokerage firm to another, NASD established the Customer Account Transfer Task Force (Task Force) to consider ways to improve the process of inter-firm customer account transfers. This Report presents the results of the Task Force's deliberations.May 14, 2006
- Interpretive LetterMember ceasing to offer retail brokerage services may use negative response letters to accomplish the bulk transfer of its retail brokerage accounts to an affiliated broker-dealer.February 03, 2005
- Interpretive LetterThe use of negative response letters to change the broker-dealer of record on a mutual fund or variable insurance product account held directly at the issuer.November 08, 2004
- Interpretive LetterNegative response letters may be used for a bulk transfer of customer accounts to a broker-dealer that will provide certain trading services that have been discontinued by member, provided the letters contain the disclosures described in Notice to Members 02-57.May 01, 2003
- Interpretive LetterInterpretive Letter to Marion A. Kashan, London Pacific Securities, Inc. (Use of Negative Response Letters)The use of negative response letters to transfer customers from one introducing broker/dealer to another may conflict with a member's obligation to observe high standards of commercial honor and just and equitable principles of trade.February 03, 2003
- Interpretive LetterIntra-firm account transfers must be conducted in a manner consistent with a member's obligation to observe high standards of commercial honor and just and equitable principles of trade.March 18, 2001
- Interpretive LetterInterpretive Letter to Justine Rusin, Merit Capital Associates, Inc. (Use of Negative Response Letters)The use of negative response letters to transfer customers from one introducing broker to another may conflict with a member's obligation to observe high standards of commercial honor and just and equitable principles of trade.October 16, 2000
- Interpretive LetterUniform Practice Code Rule 11870 requires a member to adopt specific measures to facilitate the portability of all transferable securities, including mutual fund shares.February 21, 1997