What Is an ACATS Transfer and How Does It Work?

An ACATS transfer is the standard way to move a brokerage account from one firm to another without selling your holdings first. ACATS stands for the Automated Customer Account Transfer Service, and it handles equities, bonds, mutual funds, options, annuities, and cash through a single electronic process that usually completes in about six business days.¹ You start it at the firm you’re moving to, not the one you’re leaving.²

The system is run by the National Securities Clearing Corporation, which sits between your old broker (the carrying firm) and your new one (the receiving firm) so the two never have to deal with each other directly.¹ Most brokerage-to-brokerage transfers in the United States run through it.³

What Can and Can’t Move Through ACATS

Eligible assets include equities, corporate and municipal bonds, unit investment trusts, mutual funds, options, annuities, and cash.¹ ETFs move like ordinary equities. Several categories do not transfer:

Proprietary products created by your current broker that the receiving firm doesn’t carry, such as house-brand mutual funds or money market funds.
Alternative investments including hedge funds, private equity, non-traded REITs, business development companies, and fund-of-funds structures.
Limited partnership interests held in retail accounts.
Certain foreign securities and baby bonds where proper denominations can’t be obtained.
Bankrupt issues when the carrying firm can’t deliver proper share denominations and no transfer agent is available.⁴

Cryptocurrency held at a brokerage generally cannot transfer in-kind through ACATS. If you hold digital assets at your current broker and switch firms, expect to liquidate those positions first.

How to Start the Transfer

Open the right type of account at your new broker first, then let the new broker drive the paperwork. The receiving firm generates a Transfer Initiation Form (TIF) and submits the request to the delivering firm through ACATS.² Before you sit down to complete it, gather:

Your exact account number at the delivering firm
The account registration type (individual, joint tenants with right of survivorship, IRA, trust, and so on)
The full legal name of the delivering institution

Everything on the TIF has to match your old account exactly, including your name as it appears there, down to middle initials and suffixes. A small discrepancy is enough to trigger a rejection.²

Full or Partial Transfer

A full transfer moves every eligible asset and all cash, and the delivering firm closes the account once the move is complete. A partial transfer moves only the specific positions you list, leaving the original account open with whatever remains. Partial transfers are useful when you want to keep certain holdings at your current broker or when some assets aren’t ACATS-eligible.

Registrations Have to Match

The registration type on the new account has to match the old one. An IRA can only transfer to another IRA. A joint account can only transfer to another joint account with the same owners. If the two accounts don’t line up, the carrying firm will reject the request, so open the correct account type at your new broker before submitting the TIF.

What Happens After You Submit

Once the receiving firm sends the TIF through ACATS, the carrying firm has three business days to either validate the transfer or take exception to it. Validation means confirming that the account details match and sending back a record of all positions and cash balances on its books.³ The actual movement and settlement of assets follows after that, and the full round trip usually takes about six business days. Rejections and non-transferable assets can push it longer.

Only fully settled assets are eligible to move, so trades you placed in the days before submitting the TIF may still be pending and can hold things up.

Expect your old account to be frozen for part of the transfer window. You won’t be able to buy, sell, or make other changes while the freeze is on, which keeps trades from settling while your positions are in transit.⁵ If you’re sitting on a position you might need to exit quickly, either sell it before starting the transfer or do a partial transfer that excludes it.

Why Transfers Get Rejected

Most ACATS failures trace back to the initial TIF. The carrying firm will reject the transfer if any of these apply:

The name on the TIF doesn’t match the delivering account exactly. A missing middle initial or a different suffix is enough.
The account number is wrong, including a single transposed digit.
The account has an outstanding margin call or a debit balance that exceeds the equity.
There are unsettled buy or sell orders still pending.
The receiving account’s registration doesn’t match the delivering one.

When a transfer is rejected, the carrying firm has to tell the receiving firm the reason. Fixing the issue and resubmitting restarts the clock, so getting the TIF right the first time saves real time.

Fees and Reimbursement

ACATS itself doesn’t charge you anything. The cost comes from the delivering firm, which typically charges an account transfer out fee. At major brokerages these generally fall between $50 and $75, though some firms charge up to $150. The fee usually comes out of the cash balance in your departing account.

Many receiving brokerages will reimburse the fee if you’re bringing over a large enough balance. The minimum varies by firm and by whatever promotion is running, so ask your new broker about reimbursement before you start. Getting it covered is often as simple as requesting it after the transfer completes.

Cost Basis and Taxes

Your cost basis information is supposed to follow your assets. For covered securities (generally stocks purchased after 2011 and mutual funds purchased after 2012), the delivering broker is required to send the receiving broker a transfer statement within 15 days of the transfer’s settlement date, including each security’s adjusted basis, original acquisition date, and any holding period adjustments.⁶

The receiving broker has to use that information when preparing your Form 1099-B. If the transfer statement doesn’t arrive, the receiving firm can treat the securities as noncovered, which puts cost basis tracking back on you. If a corrected statement later confirms they’re covered, the receiving broker has to file a corrected 1099-B within 30 days.⁶

Keep your own records. Download or print your cost basis reports from the delivering firm before you initiate the transfer. Cost basis data gets lost or garbled more often than it should, and having your own records makes correcting a 1099-B straightforward.

If You Have to Liquidate Non-Transferable Assets

When a full transfer includes assets ACATS can’t move, the carrying firm has to give you options for dealing with them. Under FINRA rules, that includes at least offering liquidation, with any redemption or liquidation-related fees disclosed up front. Those fees come out of your cash balance before the rest transfers. For retirement accounts, the firm also has to warn you that liquidating certain assets could trigger taxes and penalties.⁷

Selling positions inside a traditional IRA to facilitate a transfer isn’t itself a taxable event because the money stays inside the IRA. In a taxable account, forced sales are taxable. You’ll owe capital gains tax on any appreciation or can claim a loss on any depreciation. Watch the wash sale rule: if you sell at a loss and buy the same or a substantially identical security within 30 days before or after the sale, you can’t claim the loss. This comes up when people liquidate a proprietary mutual fund at the old broker and buy a near-identical fund at the new one.

After the Transfer Closes

Dividends, bond interest, and other credits sometimes arrive at your old account after the transfer has already completed. For full account transfers, the carrying firm has to keep forwarding residual credit balances for at least six months after completion, sending them within ten business days of when they post.⁷ A stray dividend or interest credit trickling through a few weeks later is normal. If something is still missing after a couple of months, contact the delivering firm directly.

Your SIPC protection follows your assets. SIPC covers up to $500,000 per customer at a member firm, including a $250,000 limit for cash, if the firm fails financially. At any point in the transfer your assets are on one firm’s books or the other’s, so the relevant firm’s SIPC coverage applies throughout. SIPC does not cover market losses, and unregistered digital asset securities are excluded even when held at a member firm.⁸

1
DTCC. Automated Customer Account Transfer Service (ACATS)
2
Investor.gov. Transferring Your Brokerage Account
3
FINRA. Customer Account Transfers
4
DTCC. ACATS Alternative Investment Receiver Delete Enhancement
5
Securities and Exchange Commission. Transferring Your Brokerage Account – Tips on Avoiding Delays
6
Internal Revenue Service. Instructions for Form 1099-B
7
FINRA. FINRA Rules 11870 – Customer Account Transfer Contracts
8
SIPC. What SIPC Protects