ACATS: what it is and how to switch brokers

Key takeaways

• ACATS is the electronic system that standardizes account transfers between firms and banks.
• The receiving firm initiates the process with a TIF, and the delivering firm validates or challenges the request.
• If the asset or institution does not participate in ACATS, the transfer can be handled through another method and may take longer.
• Reviewing account details, positions, and restrictions before requesting the transfer helps avoid rejections and delays.

You chose a broker to invest, started building positions, and over time discovered there is a better option for investing. Not necessarily Wallbit, but very likely because of costs, the user experience, and the automated investing tools we offer.

Either way, your problem is that you do not want to go through the hassle of selling all your assets and rebuilding your portfolio with the new broker.

You do not need to do that: there is an automated way to switch brokers. It is called ACATS, and it is a regulated standard in the U.S. financial system that lets you transfer your portfolio exactly as it is to a new broker, directly.

What is ACATS?

ACATS stands for Automated Customer Account Transfer Service. It is a system developed by the National Securities Clearing Corporation (NSCC) and regulated by the Financial Industry Regulatory Authority (FINRA) that automates and standardizes the procedures for transferring assets from one broker account to another. In practice, it is designed to process asset transfers with as little friction and delay as possible.

FINRA also notes that most customer account transfers between brokers happen through ACATS, and that the process is governed by Rule 11870. That rule requires both parties to coordinate and expedite the transfer when the customer gives authorized instructions.

How does ACATS work?

The process begins when you complete and submit a Transfer Instruction Form (TIF) to the receiving firm. That firm then loads the information into ACATS, and the system notifies the firm delivering the account. This is followed by a review, validation, and exception-resolution stage, during which both parties verify that the data and positions match.

If the information is incomplete, entered incorrectly, or does not meet the system’s minimum requirements, ACATS may reject the instruction. There may also be delays or a move to a manual process when the assets are not transferable through ACATS or when one of the parties does not participate in the system.

What assets can I move from one broker to another?

DTCC states that ACATS allows the transfer of many types of assets and, where applicable, can also speed up the re-registration or reassignment of certain positions. FINRA, for its part, makes clear that not all transfers can be done through ACATS, which is why alternative methods are sometimes used.

In other words: ACATS covers much of the standard process, but it is not a universal solution for every possible case.

That is why it is worth checking, before starting the transfer, whether your account holds eligible assets, whether the destination firm participates in the system, and whether the transfer will be full or partial. That upfront review saves back-and-forth, especially when your portfolio includes multiple positions or less common structures.

When does it make sense to transfer stocks from one broker to another via ACATS?

ACATS makes sense when you want to switch firms without rebuilding your portfolio from scratch, especially if you want to centralize your investments on a new platform through an electronic, standardized process. DTCC highlights precisely that the service centralizes, standardizes, and speeds up transfers between eligible participants.

It is also useful if you value process traceability: because there is a formal sequence of initiation, review, and validation, you have more visibility and control over the status of the transfer than with a completely manual process. FINRA emphasizes that customers have the right to move their accounts freely and that the industry must facilitate that movement quickly and efficiently.

What should you consider before an ACATS transfer?

Before starting the process, it is worth confirming that your account details are identical at both brokers: name, identification, and account number. FINRA notes that the system uses this information to validate the instruction, so any mismatch can trigger rejections or exceptions. It is also important to decide whether you are moving the entire account or only part of it.

Another key point is understanding that a more complex transfer does not always mean there is a problem: sometimes it simply moves out of the ACATS workflow and into a manual flow. That does not invalidate the transfer, but it can extend timelines and increase the need for follow-up.

Conclusion

If you already know Wallbit, you probably want to move your entire portfolio to our app. We provide a free global account to receive, spend, and invest in U.S. dollars.

Our free investment account also includes access to more than 12,000 assets across the world’s most important international markets, plus an interest-bearing account that earns you U.S. dollar interest on your balance.

If you want to start your ACATS transfer today, contact our support team at support@wallbit.io and we will provide personalized guidance.

Frequently asked questions

1. Can I transfer only part of my account with ACATS?

Yes. FINRA states that partial transfers can be completed through authorized instructions and that, unless otherwise specified, the automated capability is used for partial transfers. That allows you to move only certain positions instead of emptying the entire account.

2. What happens if the system rejects the request?

It usually means information is missing, there is a formatting error, or some data does not meet the minimum requirements. In that case, the receiving firm must correct the instruction or resolve the exception with the other party before proceeding.

3. Does ACATS work for transfers between a broker and a bank?

Yes. DTCC explains that the system transfers customer account assets between a brokerage firm and/or bank to another. Even so, not all institutions participate in the same way, so it is worth checking compatibility before starting.