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The Future of a Real Time Transactional ACATS System

Michele Hillery, DTCC Executive Director, Equity Clearing Services | June 25, 2018

Turning User Feedback Into Improved Market Insights

I’m happy to share the news that DTCC, in partnership with the SIFMA Customer Account Transfer Section, has issued a new concept paper, “A Vision for the Future of ACATS,” to explore with our clients and the industry what a modernized, streamlined and transformed Automated Customer Account Transfer Service (ACATS) might potentially look like.

ACATS, offered by our National Securities Clearing Corporation (NSCC) subsidiary, was a crucial industry development in 1985 that enabled firms to significantly reduce the time required to transfer client accounts – from what used to take 30 days to process a full account transfer, in the beginning years – to its current state of between four or five days. Today, we are looking at possible future enhancements to further shorten that window – and in this new concept paper, even posing the bold question if a same-day ACATS transfer and settlement scenario is possible.

In fact, the industry has proposed transforming the transfer process by introducing a real-time transactional ACATS system that introduces the concept of same day settlement and next day settlement scenarios. The paper reviews how the industry could work towards allowing for all pre-settlement activities to occur in just one day, reducing the time the investor is not able to trade assets and bringing ACATS more in line with other industry financial transaction processing activities.

Overcoming Technology Limitations

As an ongoing effort we’ve been working to transition processes – including ACATS – from legacy technology to a cloud-based/application interface. Moving ACATS to cloud-based/application interface will eliminate constraints faced today, which limits firms to batch processing allow ACATS to and will enable ACATS to interact with DTCC in real-time. We believe that modernizing our current ACATS system prepares the industry for the enhancements that will create a better client experience and reduce client risk.

Today, clients expect financial activities to be completed easier and faster, which includes moving their account from one firm to another. And our efforts have not been done in a vacuum. We’ve collaborated extensively with clients in working groups, with the Customer Account Transfer Group of SIFMA and in meetings with the industry to look the myriad challenges faced in the account transfer space and rationale for changing. The resulting concept paper — intended as a starting point in moving ACATS forward — is an opportunity for dialogue and engagement from both transfers areas and other areas within firms that interact with ACATS.

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To download the paper, click here. Questions and comments can be directed to the SIFMA Customer Account Transfer Section ([email protected]) or to DTCC Relationship Managers.