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How ACATS is Transforming Transfers

By DTCC Connection Staff | 5 minute listen | July 11, 2023

In just 5 minutes, we’ll explore the world of post-trade financial services by way of new ideas, insight snippets, emerging trends, and thought-provoking questions. In this episode, Craig Gurien, DTCC Director, Equities Clearing, discusses the transformational forces taking place within DTCC's Automated Customer Account Transfer Service (ACATS) to improve operational efficiency and enhance the client experience.


From DTCC, you're listening to Take 5, a bite-sized post-trade financial services podcast that tackles an industry topic or trend in just five minutes. Tune in to hear a DTCC executive share their perspective on how to grow, prosper and protect the global financial markets. There's a lot to uncover in five, so let's start the clock.

Hi, my name is Craig Gurien. I’m the product manager for ACATS and I’m happy to be here today to provide some additional insight on the ACATS service.

ACATS is one of the DTCC’s flagship services established back in 1985 under NSCC. As we revisit the history of DTCC on its 50th anniversary, and why it began, we are also reminded of how manually intensive the asset services, clearance and settlement process was leading up to the paper crisis of the 1960’s and 1970’s. This was no different for the transfer brokerage accounts from one firm to another.

Prior to ACATS, the process of moving brokerage accounts was an extremely manual process as it could take up to 30 days or more to complete a transfer. That meant 30 days of an investor not having full access to their portfolio for trading. As the financial industry grew and more and more accounts were opened, the need to transfer those accounts grew accordingly. Transfers, often one of the first experiences an investor has with a firm, became a painstaking and elongated experience for the account owner and therefore needed to be addressed. A need to streamline and automate the transfer process was critical.

In response, a working group of firms collaborated with NSCC to create the ACATS system to reduce manual processes, create operational efficiency and reduce risk where needed. When ACATS was introduced in 1985, the transfer time frame was significantly reduced to 10 days. Now, the majority of transfers occur in 4 days or less. Over time, additional capabilities were introduced such as processing of residual credits, reclaims and partial transfers. The ACATS system provided the industry the portability needed for brokerage account growth and the building block to create more capabilities for the future.

Our focus for the next several years is how we modernize the application, and at the same time, provide new functionality to our ACATS users. From a functionality standpoint, we recently introduced new data fields to support the transfer of the 529 college plan account via ACATS as requested by our industry brokers/dealers. This was accomplished to support continued growth in the 529 space as the transfer of these accounts is quite the manual process. We are also focused on capabilities to help reduce the number of days to complete a transfer from five to four days, to now three or even two.

Now, with the move to T+1 in May 2024, several settlement changes have been made that will enable ACATS to reduce settlement days from the transfer cycle. Other areas of focus include mutual fund reclaims, integration of alternative investments into ACATS, better functionality support of foreign securities, and a revamp of the ACATS for insurance annuities process.

Many of our client are on similar modernization journeys. They are looking for the opportunity to move off the current mainframe and ultimately reduce their legacy footprint. Our modernization of ACATS will benefit clients by giving them the ability to upgrade by providing APIs and new messaging capabilities that will provide a stronger foundation for furthering the advancement of technology and workflow efficiencies.

Many of our firms have told us they are building out their API interfaces and the ability to interface with DTCC this way synergizes it further. API messaging provides new avenues for real-time processing, shortening the time it takes to complete a transfer, and so on.

Any opportunity to shorten the ACATS time is going to reduce risk. That is a really important component of anything we do in the transfer space at DTCC. As I stated earlier, when a transfer is pending, the investor cannot trade the asset in the account. The shorter the transfer window, the less market risk for the investor. It improves the client experience, which means less complaints and elevates the reputation of both the firm using ACATS and DTCC.

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