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.


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