The Automated Customer Account Transfer Service (ACATS) is a system that automates and standardizes procedures for the transfer of assets in a customer account from one brokerage firm and/or bank to another.

Overview

The Automated Customer Account Transfer Service (ACATS) is a system that automates and standardizes procedures for the transfer of assets in a customer account from one brokerage firm and/or bank to another.

ACATS can expedite account transfers by permitting transfers to be accomplished in an automated environment. NSCC developed ACATS in conjunction with the NYSE, its Rule 412 Task Force Committee and the NASD to address the industry's need to reduce delays and inconsistencies associated with manual processing.Instruments handled by the system include equities, corporate and municipal bonds, unit investment trusts, mutual funds, options, annuities, cash and other investment products.

Who Can Use the Service

All eligible and qualified NSCC settling members and DTC member banks are eligible for this service. Additionally, Mutual Fund Companies are eligible to use the service but only as the contra-party to a transfer initiated by a firm (bank or broker) for the purpose of re-registering a mutual fund position to or from them directly.

Benefits

ACATS facilitates accurate and timely transfer of a customer's account, with the following operational advantages to users:

• Uniform time frames, standardized reporting and automated control functions.
• The service debits delivering brokers the full market value of customers' securities, promoting the timely transfer of assets. For account transfers where a bank or a Fund Company is the contra-side, the assets are delivered free.
• ACATS provides an automated transfer initiation procedure that incorporates the industry's effort to immobilize paper documents, such as Transfer Initiation Forms (TIFs).
• Automated residual credit processing allows credits that accumulate after a transfer is completed, such as stock or cash dividends, to be transferred electronically from the delivering firm to the receiving firm through ACATS.
• Through the ACATS-Fund/SERV link, users can easily re-register customers' mutual fund assets.
• Through the ACATS/IPS link, users can easily re-register customers' annuity assets.
• Automated functionality to process partial transfers, fail clean-ups and position reclaims.

How the Service Works

Firm-to-Firm Transfers

Customers initiate account transfers by submitting completed TIFs to their new broker or bank (in the case of residual credits and other non-standard transfers, the delivering firm initiates the transfer). The TIF data is forwarded to NSCC, which assigns control numbers and sends control reports to both delivering and receiving brokers/banks.

Delivering brokers/banks must submit asset details or reject the transfer. Assets that are submitted are reported to the delivering and receiving firms. Receiving firms have one business day to reject the account, or request that the delivering firm make adjustments. During this one-day period, the delivering firm can add, delete or change an item. Receivers can also delete mutual funds or annuities where they don't have a selling agreement with the fund or insurance carrier.

Securities eligible for the Continuous Net Settlement (CNS) System are automatically routed into CNS, unless the delivering firm indicates otherwise. Other securities are transferred through ACATS receive-and-deliver instructions or sent to DTC, if non-CNS, DTC-eligible. Eligible mutual fund assets can be transferred through the automated ACATS-Fund/SERV interface. Eligible annuities can be transferred through the ACATS-IPS interface. Options are routed to the Options Clearing Corporation, where transfers in customer-options positions take place.

On settlement date, for non-CNS─ eligible securities, NSCC automatically debits the delivering broker with the value of the assets being transferred through ACATS and credits the receiving broker with the same amount. For assets that are delivered through NSCC's physical delivery systems, NSCC will credit the delivering broker with the value of those assets and debit a corresponding amount to the receiving broker.

Standard (Full) Transfer Process

Step	Taken By	Action	Result
1	Firm expecting to receive a customer's account	Submits Transfer Initiation Form data.	Begins transfer process.
2	NSCC	Generates ACATS Transfer Transaction.	Confirms input receipt to receiving firm. System-rejected requests are reported to the receiving (submitting) firm. Delivering Firm notified of transfer request.
3	Delivering Firm	Submits Asset Input Or Customer Account Transfer Reject NOTE: Responses should be submitted within one business day to prevent account from entering a Request-Past status.	NSCC generates Asset Transaction Report listing assets. Deliverer reviews for accuracy. NSCC generates Transfer Transaction Report with rejects.
4	Receiving Firm	If the account was rejected with a 24-hour Reject Code, the receiver should correct by submitting an adjusted TIF. NOTE: TIFs not corrected within the 24-hour period will cause the account to reject.	NSCC generates Transfer Transaction Report with TIF adjustments.
5	Receiving Firm	Reviews Asset Transaction Report within one business day. Either Accepts the account (does nothing) and submits re-registration instructions for ACATS Fund/SERV-eligible assets and IPS-eligible assets. Or Accepts the account and accelerates settlement.     Or Requests adjustments.     Or Submits Asset Delete for mutual fund(s) or annuities and accelerates settlement. Rejects account.	Transfer settles three business days later.   Transfer settles two business days later.   Delivering firm submits Asset Input or Adjustment and NSCC indicates pending adjustment on Transfer Transaction Report and generates Asset Transaction Report with adjustments highlighted.   Transfer settles two business days later.   NSCC generates Transfer Transaction Report with reject.
6	NSCC	Generates Settlement Report and Option Transfer Report	Lists all assets scheduled to settle on designated settlement date. Lists all option assets scheduled to move through OCC's Option Transfer Service on settlement date.
7	NSCC	Reports assets settling on CNS Projection Report and/or generates Receive and Deliver Instruction and/or a Deliver Order file to DTC for Depository-eligible securities and/or generates a file of mutual fund and annuity re-registration instructions for eligible Fund/SERV and IPS assets and a file to OCC of options that are being transferred.	Book-entry delivery via NSCC's CNS System. Delivery is made outside of CNS.     Fund/SERV and IPS are sent re-registration instructions and OCC is sent options-transfer instructions.

 

For More Information

Please call Relationship Management at (800) 422-0582.