What Is an ACAT Transfer and How Does It Work?

An ACAT transfer is the electronic process for moving a brokerage account, including stocks, bonds, funds, and cash, from one firm to another without having to sell your holdings first. It runs on the Automated Customer Account Transfer Service (ACATS), a system operated by the National Securities Clearing Corporation and governed by FINRA Rule 11870. Once your new broker submits the request, the formal transfer should take no more than six business days, though the full move from paperwork to final settlement often runs two to three weeks.

How ACATS Actually Works

The National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Company, runs the technical side of ACATS. It sits between the two brokers and routes transfer instructions in a standardized electronic format, so the firms never have to exchange physical paperwork.¹

FINRA Rule 11870 handles the regulatory side. It requires all FINRA member firms to use the automated system for customer account transfers and sets binding deadlines at each step.² When a delivering firm misses a deadline or improperly delays a transfer, ACATS automatically flags it for FINRA review.¹

What Can Move Through an ACAT Transfer

The system handles most of the common asset types you’d find in a brokerage account. Publicly traded stocks, government and corporate and municipal bonds, ETFs, listed options, unit investment trusts, and cash balances all move electronically without being sold. Mutual funds can transfer as long as both the delivering and receiving firm have a distribution relationship with the fund company. Annuities move through a linked system called the Insurance Processing Service, which re-registers the contract with the insurance carrier so you don’t have to surrender the policy.¹³

What Won’t Transfer

Some things can’t ride the system. Proprietary products created and managed only by your current firm are treated as nontransferable unless the receiving firm specifically agrees to accept them. Third-party mutual funds are also nontransferable when your new broker doesn’t hold a distribution agreement with the fund company. In those cases you’ll usually have to liquidate before the move.²

Fractional shares also can’t move. If you own 10.37 shares of a stock, the 10 whole shares transfer and the 0.37 is sold for cash by your old broker. When the sale proceeds hit $20 or more, that firm reports the transaction to the IRS on Form 1099-B, and you’ll pick up any gain or loss on your return.⁴

How to Start the Transfer

You start at the new broker, not the old one. The new firm gives you a Transfer Initiation Form (TIF), which is your formal instruction to move the account. Before you fill it out, pull these details from your existing account:

The exact account number at your old firm, including any leading zeros
Your Social Security or tax ID number as it appears on the old account
The account title (the name and account type) exactly as it reads on your statements
The clearing number or DTC participant number for the delivering firm — your new broker can usually look this up

The SEC recommends providing every field exactly as it appears on your old account, including a middle name or initial if one is listed.⁵ The TIF lets you specify a full transfer, where everything moves, or a partial transfer, where only certain assets do. Some firms also require a legal signature or, for larger accounts, a medallion signature guarantee — a verification stamp available at banks and brokerage offices that confirms your identity and authority.

The Timeline After You Submit

Once your new firm enters the TIF into ACATS, the clock starts on a set regulatory schedule:

Day 1: Your new firm submits the transfer instruction and ACATS notifies your old firm.
Within one business day: Your old firm must either validate the request or formally object based on one of the reasons listed in FINRA Rule 11870.
Within three business days after validation: Your old firm must deliver all eligible assets.

Both deadlines come from Rule 11870.² When nothing goes wrong, the SEC says the ACATS portion should take no more than six business days from the point of entry.⁵ In practice, expect two to three weeks once you count the initial review and final settlement.

During the transfer window, your old firm freezes the account. Open orders get canceled and no new trades can be placed, which keeps the list of securities accurate for final settlement.² When the move finishes, your new broker issues a statement showing the received securities and their cost basis.

Retirement Accounts

You can move a traditional IRA or Roth IRA through ACATS as long as the account type stays the same on both ends: traditional to traditional, Roth to Roth. These are direct trustee-to-trustee transfers, not rollovers, so they don’t count against the IRS one-rollover-per-year limit.⁶

You cannot use an ACAT transfer to convert a traditional IRA into a Roth. That’s a separate taxable event. Complete the transfer first with matching account types, then run the conversion at your new broker.

Margin Accounts and Pending Trades

Margin accounts add friction. Your new firm isn’t required to accept the transfer, and the usual reason for declining is that the account doesn’t meet its credit standards.⁷ Before you file the TIF, confirm the receiving broker will take a margin account and ask about its minimum equity requirements.

If your margin account carries a debit balance, your current firm may require you to pay it down or post additional collateral before the transfer moves. Your current broker is also permitted to lend out securities when a margin account has an outstanding debit; to stop that, you can either pay off the balance or ask the firm to move the securities into a cash account first.⁷

Pending trades matter too. Because the account freeze cancels open orders, unsettled trades should settle before you begin. If you ask for a liquidation as part of the transfer, the process shifts off the automated track and onto a manual one with no regulatory time frame, which can slow things considerably.⁵

Why Transfers Get Rejected

Your old firm can only reject a transfer for reasons listed in Rule 11870. The most common are:

The Social Security or tax ID number on the TIF doesn’t match old-firm records
The account title or account type on the TIF doesn’t match the existing account
The account number isn’t on the delivering firm’s books
The TIF is missing a required signature or custodial approval
The situation requires additional legal documents, such as a death certificate, marriage certificate, or court order
You submitted a written cancellation before the transfer completed
An identical transfer instruction was already submitted
The account’s margin or debit situation conflicts with firm credit policy
The account has no transferable assets

Those are the only permitted grounds. Your old broker cannot refuse or drag its feet simply because you’re leaving. If you think a rejection is improper, you can file a complaint with FINRA. On the other side, your new firm can decline the incoming account, but only if it fails the firm’s credit policies or minimum asset requirements.²

Transfer Fees

Most brokerages charge an outgoing transfer fee, sometimes called an ACAT fee or account termination fee. They generally run $50 to $150 per account. Some discount brokers charge nothing; full-service firms tend to charge more. Check the fee schedule at your current firm before you start.

Many receiving firms will reimburse the fee if you ask, especially on larger accounts. The reimbursement may show up as a cash credit or a promotional offer, and some brokers require you to submit proof of the charge within a set window, so ask before you initiate the transfer rather than after.

Cost Basis and Residual Credits

When your investments move, your old broker is required by federal regulation to send a transfer statement to your new broker with cost basis information for each covered security: original purchase price, acquisition date, and any adjustments. The requirement sits in Treasury Regulation § 1.6045A-1 and generally covers stocks acquired after 2011 and mutual funds acquired after 2014.⁸

Your new broker should have accurate basis records for future capital gains reporting, but save your old statements and verify the numbers came across, especially for older holdings. Securities purchased before the covered-security dates may transfer with no basis information at all, leaving you to track it yourself.

Small amounts of money can also arrive at your old firm after the account officially moves: a dividend declared before the transfer date, an interest payment, a refund. Rule 11870 requires the old broker to forward these residual credits to your new firm promptly. When both firms use the ACATS residual credit process, the forwarding happens automatically. For transfers handled outside the automated system, the old firm must keep sending residual cash and securities for at least six months after the transfer, within ten business days of each posting.² Watch both accounts for a few months so nothing slips through.

1
DTCC. Automated Customer Account Transfer Service (ACATS)
2
FINRA.org. 11870 Customer Account Transfer Contracts
3
Federal Register. Self-Regulatory Organizations National Securities Clearing Corporation Order Approving a Proposed Rule Change Concerning Enhancements to the Automated Customer Account Transfer Service
4
Internal Revenue Service. Instructions for Form 1099-B (2026)
5
U.S. Securities and Exchange Commission. Transferring Your Brokerage Account Tips on Avoiding Delays
6
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
7
FINRA.org. Brokerage Accounts
8
eCFR. 26 CFR 1.6045A-1 – Statements of Information Required in Connection With Transfers of Securities