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ACATS Modernization: DTCC Launches New Client Interface

By Antonia Feliz-Redman | 3 minute read | June 4, 2024

DTCC’s Automated Customer Account Transfer Service (ACATS) has launched new, advanced client interfaces that allow firms to process account transfers. The transition to new communication protocols adds flexibility and speed to market for business expansion, marking the beginning of an incremental approach to the modernization of this critical industry service.

Related: Panel discusses modernization initiatives advancing the U.S. capital market

DTCC, in partnership with the industry, has delivered the dual benefit of product expansion and technical modernization. The ACATS service can now support passing transfer information on 529 Accounts and thorough upgrades of its message formats and communication protocols, has delivered an avenue for more efficient workflow processes, stronger resiliency of services and better overall client experience from a platform and workflow perspective.

The new client interfaces use standard JavaScript Object Notation (JSON) message formats that replace current fixed and variable formats. The JSON messaging can be sent and received using either Representational State Transfer (REST) API and/or Message Queue (MQ) communication protocols replacing existing File Transfer Protocol (FTP) and Network Data Mover (NDM) protocols.

Firms are expected to move to the new client interfaces by October 2025 which is when the current ACATS legacy interfaces are targeted for decommission.

The Path Forward

“This is the start of a modernization journey in collaboration with our industry partners to upgrade the ACATS application,” said Michele Hillery, DTCC General Manager of NSCC's Equity Clearing and DTC Settlement Service. “Since its inception and subsequent evolutions within the service offering, ACATS has enabled the industry to reduce the time required to transfer client accounts.”

Takeaways from recent industry collaborations focused primarily on ways to both modernize ACATS and make the service more efficient where most opportune. Firms have communicated their priorities for the use of API’s and modernized messaging formats within DTCC processes to become better aligned with their own modernization strategies. Multiple firms have even begun testing the new interfaces with the first successful production migration by Apex Clearing in February.

“The use of API’s is growing expeditiously within the financial industry, and we see tremendous opportunity for the advancement of DTCC’s ACATS platform,” said Lucille Mayer, Chief Solutions Officer, Apex Fintech Solutions. “As one of the first movers to adopt DTCC’s new interface, we are thrilled to be at the forefront of the industry’s evolution towards the use of more advanced technology to support new standards in vital process such as ACATS.”

Supporting 529 Plans

As an added business value, ACATS was enhanced to support 529 college savings transfers exclusively within the new interfaces. Firms that transition to the new interfaces will have the ability to transfer these account types.

Prior to the launch of this new client interface, 529 positions could only be transferred by leveraging DTCC’s Mutual Fund Networking or via special request to the fund. This enhancement will remove considerable risk from existing manual process, which dramatically slows the transfer process and adds to the risk of manual processing errors.

“When we initially considered implementing changes to support the transfer of 529 accounts, a decision was made to curtail updates to legacy files and incorporate this within the modernization plan.,” said Craig Gurien, Director, DTCC. “The modernization of ACATS is something we have seen immense value in for some time now. Now, we believe this project has come at the right time as many of our industry partners are on similar transformative journeys, and their participation is necessary to ensuring the migration into the new ACATS interface is a successful one.”

To ensure smooth progression by firms, an ACATS Client Interface Industry working group is in flight. The group provides a forum for firms to hear updates, share experiences and coordinate implantation activities. For information on how to join, please contact your relationship manager for details.