ACATS Transformation is Underway

Two eagerly anticipated innovations of DTCC’s multi-year Transformation program are enhancements to the Automated Customer Account Transfer Service (ACATS). Starting in October, the ACATS settlement cycle will be shortened by one day. By October 2026, client interfaces will be modernized for greater flexibility and faster business expansion.

“As we bolster our core capabilities and applications, DTCC will fortify its strategic resiliency, ensuring our systems are adaptable and innovative. The ACATS enhancements are a significant part of this transformation, and our clients will benefit from the shortened settlement cycle and platform improvements,” said Val Wotton, DTCC Managing Director and Global Head of Equities Solutions.

ACATS, established in 1985 by National Securities Clearing Corporation (NSCC), facilitates the smooth and electronic transfer of assets, like stocks, bonds, and cash, from one brokerage firm or bank to another.

Removing a Day from the ACATS Settlement Cycle

Since its inception – and subsequent evolutions within the service offering – ACATS has enabled the industry to significantly reduce the time, cost and risk to transfer client accounts. Where it once took weeks or months with manual processes and paperwork, it now takes between just four and five business days for a standard (full) ACATS transfer to settle.

With this next planned enhancement, which was made available for clients in DTCC’s PSE test environment in July and will be in full production in October, one day from the ACATS transfer cycle will now be eliminated, allowing for a full transfer to be processed between just 3-4 business days. It will also eliminate the extra day required to process mutual funds and options which will now synchronize with all other securities from a settlement perspective.

This enhancement was made possible by the industry’s monumental shift to T+1 settlement in May 2024. With the implementation of T+1, any concerns regarding sufficient timing to engage in settlement activities (for example, processing CNS exemptions before the night cycle) were addressed, and certain activities previously done during a specific day called “Settle Prep” can now be done the day before settlement within the final review day.

Shortening the trade lifecycle was a major shift for the industry in May 2024. “Leveraging those changes allowed DTCC to further expediate processes within our core systems allowing us to shorten the transfer timeframe in ACATS,” said Bill Kapogiannis, Executive Director, DTCC CC&S.

ACATS is often one of the first transactions processed by a firm for a new client.

“Reducing processing times for client transfers creates a better experience that is starting to align with today’s world of quick, real-time transactions. Giving clients timely access to assets, increases their confidence in the reliability of our services,” said Kathy Metcalfe, Sr Manager, Project Management, Charles Schwab and Co., Inc.

New Messaging Capabilities, New Interfaces

Part of DTCC’s Modernization strategy is to provide modernized client interfaces for all of its services. Upgrades to the ACATS message formats and communication protocols are currently in production, and firms are migrating to the new interfaces at an increasing rate in preparation for the October 2026 decommission of the legacy file formats.

The new client interfaces deliver a more efficient workflow process, stronger resiliency of services, and enhancement flexibility by providing extensible formats. All new features to ACATS will be added only to the new formats. This started back in 2024 with the introduction of 529 plan data that allows for the account transfer of 529 college plan accounts through the ACATS system. Once firms move to the new client interfaces, they have the option to adopt this new feature.

“The ACATS client interface modernization is a foundational step in iterative approach to modernizing the ACATS application. The new messaging will improve our time to market for enhancements and open the doors for further asset expansion, workflow improvements and real-time processing. The industry collaboration has been so critical as we progress through this multi-year migration,” said Craig Gurien, Director, DTCC ACATS Product Manager.

Replacing legacy file transmissions for ACATS and introducing new message capabilities will allow firms to submit and receive ACATS transactions using JSON (JavaScript Object Notation) or MQ (for inbound submissions to ACATS and/or outbound from ACATS to firms).

"The industry’s ACATS transformation and the shift to a shortened settlement cycle have been pivotal in advancing our system modernization journey. These initiatives not only enabled scalable, efficient solutions aligned with our strategic platform renovations, but also empowered us to deliver meaningful user enhancements, close long-standing operational gaps, and enable real-time messaging and transparency across upstream and downstream systems,” said Melanie Guyan (Miller), Vice President, Morgan Stanley.

For more information on ACATS and the above initiatives, visit DTCC Learning.