Account Transfer

Clients from time to time will wish to have their accounts transferred from one brokerage firm to another. This is usually accomplished through an Automated Client Account Transfer, or an ACAT. The ACAT provides transfer and delivery instructions to the firm, which will be required to deliver the account to the client’s new firm. Once transfer instructions are received, no new orders may be accepted and all open orders must be canceled, except for open orders for options that expire within seven days. The firm that receives the transfer instructions is required to validate the instructions or take exception to them within one business day. Upon validation, the transfer instructions must be sent back to the receiving firm with a list of the positions to be transferred. Once the instructions have been validated, the firm has another three business days to complete the account transfer.  A firm may only take exception to the instructions for the following reasons:

  • The customer’s signature is missing or invalid
  • The account title does not match the carrying firm’s account title 
  • The social security number does not match 
  • The account number is wrong

A difference in securities positions and free credit balances is not a reason to take exception to the transfer instructions. From time to time, certain investment positions will not be able to be transferred from the old firm to the new firm. The customer must be informed of this fact in writing and the customer is required to give specific instructions as to what should be done with that investment.

The customer may elect to:

  • Leave the investment at the old firm
  • Have it liquidated
  • Have it shipped to them

If the position is liquidated, the proceeds must be forwarded to the customer within five business days. If the customer is transferring an account that has a checking account, debit, or credit card connected to the account, the customer must return or destroy the checks and the card. Broker dealers that engage in partial account transfers from one broker dealer to another use the DTC to settle the transfers. If the old firm fails to deliver a position to the new firm, the old firm has a fail to deliver and the new firm has a fail to receive.


Related Articles
  1. Personal Finance

    8 Low-Cost Ways To Transfer Money

    If cost is your primary concern, there are several cheap(er) ways to move funds.
  2. Investing

    5 Money Transfer Tips For Foreign Workers

    If you are working in the U.S. as a foreign worker, here are some tips for sending money back home.
  3. Small Business

    Moneygram vs. PayPal vs. Xoom: Who Has the Lowest Fees?

    Learn about the different fees associated with leading transfer services PayPal, MoneyGram, and Xoom and the types of services that each company provides.
  4. Personal Finance

    What to Know About Transferable Points Programs

    Transferable points programs give credit card users a more extensive way to use credit card points for travel.
  5. Personal Finance

    Credit Card Review: Chase Slate

    Take a closer look at one of the most popular balance-transfer credit cards on the market: the Chase Slate card with a 0% balance transfer fee.
  6. Personal Finance

    Handling High-Yield Savings Accounts

    Is a high-yield savings account right for you? Read on to find out what they have to offer.
  7. Personal Finance

    Sending Money: MoneyGram vs. Western Union (WU, MGI)

    Comparing the differences between the services – and the fees.
  8. Retirement

    What is the Great Wealth Transfer?

    As Baby Boomers age, it's inevitable that their assets will get passed on. Over the next 20 years, there will be a transfer of wealth that surpasses $30 trillion.
  9. Trading

    Basics of the Mechanics Behind Electronic Trading

    Once associated with shouting traders and wild hand gestures, now statistics and programmers rule.
  10. Personal Finance

    How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
Trading Center