Brokerage Account Transfers

Boca Raton and West Palm Beach, FloridaSecurities Fraud and Elder Abuse Litigation and Arbitration Attorney FAQ’s Relating to Brokerage Account Transfers

Most account transfers between firms are made using the Automated Customer Account Transfer Service (ACATS). The National Securities Clearing Corporation (NSCC) operates ACATS, and both the New York Stock Exchange (NYSE) and the Financial Industry Regulatory Authority (FINRA) require their member firms to use ACATS. Transfers involving cash, equities, corporate and municipal bonds, government securities, mutual funds, and listed options are readily transferable through ACATS. If a transfer is made through ACATS, and there are no problems, the transfer should take approximately three to five business days to complete from the time the new firm enters the transfer form into ACATS.

All transfers start and end with your new firm. Customers initiate the transfer process by completing a Transfer Instruction Form (TIF) and sending it to the new firm. Most account transfer delays occur because the TIF is either incorrect or incomplete. It is critical that you use the correct form and fill it out very carefully. Be sure to provide the requested information exactly as it appears on your old account. Once the new firm receives the TIF, it begins the transfer validation process by sending the TIF to the old firm via ACATS, with a list of assets to be transferred.

The old firm has one business day to validate or reject the transfer request. If the assets in an account can be transferred through ACATS, the old firm can reject a transfer request only if the form has been completed incorrectly or there is a question about the ownership of the account or the number of shares.

Once the transfer request is validated by the old firm, the account is frozen for transfer to the new firm. The old firm will send a list of the assets to be transferred to the new firm, which can reject the transfer only if the account is not in compliance with the new firm’s credit policies or minimum asset requirements.

The old and new firms must act to complete the transfer so it is important to stay in touch with both of them. If there is a problem, ask for an explanation of how to correct it. If the old firm takes no action on the request or a problem is not resolved within two business days, the transfer request is purged (or deleted) from ACATS. If that happens, FINRA is notified and the new firm must start over by inputting the transfer request into ACATS. Once the transfer is complete and you receive your first statement from your new firm, it is a good idea to take the time to compare it with your last statement from your old firm to verify that all assets have been correctly transferred.

There are a number of questions that you should ask the new brokerage firm initiating the account transfer process. For suggestions, please follow this link.

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