The difference between ACAT and non-ACAT transfers comes down to whether your investments move electronically through a shared clearing network or by hand between two firms. An ACAT transfer runs through the Automated Customer Account Transfer Service, finishes in roughly four to six business days under FINRA’s rules, and moves most standard holdings in-kind. A non-ACAT transfer is the manual alternative used when one of the firms isn’t on the network or an asset can’t ride the electronic rails, and it typically takes several weeks and more paperwork.
How an ACAT Transfer Works
The Automated Customer Account Transfer Service is the electronic pipeline that broker-dealers use to move securities and cash between firms. It’s operated by the National Securities Clearing Corporation, a subsidiary of the Depository Trust and Clearing Corporation, and most broker-dealers registered with FINRA participate in it, along with banks that belong to the clearing corporation.1FINRA. Customer Account Transfers
Nothing physical changes hands. Both firms connect to a central hub that coordinates the exchange of account data, verifies holdings, and moves positions from one side to the other through electronic ledger entries. The receiving firm initiates the request, the delivering firm confirms the holdings match, and the system transfers everything in a structured sequence. That structure is what eliminates most of the errors that come from manual data entry.
ACATS can move equities, corporate and municipal bonds, unit investment trusts, mutual funds, options, annuities, and cash.2DTCC. Automated Customer Account Transfer Service (ACATS) That covers most of what a typical investor holds.
The timeline is set by FINRA Rule 11870. Once the receiving firm submits the transfer instruction, the delivering firm has one business day to validate the request or flag a problem, and after validation must complete the transfer within three business days.3FINRA. FINRA Rule 11870 – Customer Account Transfer Contracts The regulated window works out to roughly four business days, though the SEC notes the full process including initial paperwork often takes two to three weeks end to end.4U.S. Securities and Exchange Commission. Transferring Your Brokerage Account – Tips on Avoiding Delays
When a Non-ACAT Transfer Is Used
A non-ACAT transfer is what happens when the electronic path isn’t available. That’s the case when one of the firms involved doesn’t participate in the ACATS network, which is common with smaller credit unions, certain insurance companies, and niche investment firms that haven’t built the infrastructure for electronic settlement. It’s also the case when a particular asset can’t move through the system even if both firms are members.
Without the central hub coordinating things, the receiving firm has to contact the delivering institution directly and verify every holding before anything moves. Manual transfers typically rely on physical paperwork, and you’ll often need to mail original documents with a medallion signature guarantee, a special stamp from a participating bank or brokerage that verifies your identity, your legal authority to authorize the transfer, and the authenticity of your signature.5U.S. Securities and Exchange Commission. Medallion Signature Guarantees – Preventing the Unauthorized Transfer of Securities A standard notary seal won’t work. Notaries confirm identity; a medallion guarantee goes further by making the guaranteeing institution financially liable if the signature turns out to be fraudulent.
Because both firms have to coordinate manually, each step requires human review. The whole process can take several weeks instead of days.
Partial transfers outside of ACATS are also possible, where you instruct the delivering firm directly to send specific assets, but those fall outside Rule 11870’s strict timelines. The firms still have an obligation to move things promptly, but there’s no hard four-day deadline.3FINRA. FINRA Rule 11870 – Customer Account Transfer Contracts
What Actually Differs for You
The two paths diverge on the things that matter to a customer moving an account.
Speed. ACAT runs on a regulated four-business-day clock after submission, usually two to three weeks total including paperwork. Non-ACAT transfers have no equivalent deadline and commonly run several weeks.
Process. ACAT is initiated by filing a Transfer Initiation Form (TIF) with your new firm, and the electronic system handles verification and settlement from there. Non-ACAT transfers rely on physical paperwork, direct communication between firms, and often a medallion signature guarantee.
Freeze and rejections. During an ACAT transfer, your old account is frozen. Open orders are cancelled and no new trades can be placed, which catches people off guard when active limit orders or stop-losses vanish without executing. ACATS also has a defined rejection process: a soft reject keeps the instruction active for 24 hours while a deficiency is corrected, and a hard reject cancels it, forcing a new submission. An uncorrected soft reject automatically becomes a hard reject. FINRA has noted that some firms overuse hard reject codes even for minor deficiencies like typos.6FINRA. Report of the Customer Account Transfer Task Force Non-ACAT transfers have no comparable structured rejection system; problems get resolved through direct back-and-forth between the firms.
Fees. Most brokerages charge an outgoing ACAT transfer fee. Merrill Edge charges $49.95 for a full account transfer.7Merrill A Bank of America Company. Pricing Other major firms charge anywhere from $50 to $100, depending on the account type and current fee schedule. Incoming transfers are almost always free at the receiving firm, and many receiving brokerages will reimburse your outgoing fee if you ask, particularly for larger accounts.
Tax treatment. ACAT transfers move investments in-kind, so no positions are sold and no taxable event is generated. Cost basis, purchase dates, and holding periods carry over. When a non-ACAT process forces liquidation of any asset, the sale produces capital gains or losses in that year.
Holdings That Force a Manual Process
Even when both firms are on the ACATS network, certain assets won’t transfer electronically. Knowing which ones ahead of time saves you from surprises mid-transfer.
- Proprietary mutual funds created and sold exclusively by one brokerage often can’t be held at a different institution. You’ll likely need to sell these positions first, and the proceeds move as cash.
- Fractional shares cannot transfer between brokerages. The delivering firm will automatically liquidate them, and the cash proceeds transfer instead.
- Most cryptocurrency holdings require specialized custody arrangements and won’t move through ACATS. They typically must stay at the original firm or be moved through that platform’s own crypto transfer process.
- Certain limited partnerships have custody restrictions that prevent electronic transfer and may need to remain in place or go through manual re-registration.
- Options expiring within seven business days aren’t frozen during the transfer under FINRA Rule 11870 and may need to be handled separately.3FINRA. FINRA Rule 11870 – Customer Account Transfer Contracts
Fixed and variable annuities sit in a gray area. ACATS technically supports annuity transfers, but the underlying insurance contracts are complex enough that many firms process them manually anyway. If you hold annuities, ask both firms upfront how they’ll handle the move.
Information You Need to Start Either Type
Either transfer begins with a Transfer Initiation Form at your new firm. Getting the details right the first time is the single most important thing you can do to avoid delays, because a mismatched digit or outdated name can get the whole request rejected.
- Account titles must match exactly. The name on your old account and your new account have to be identical, and an individual account can’t become a joint account during the transfer. If you recently changed your name, update it at both firms before starting.
- Your full account number at the delivering firm, exactly as it appears on your statement.
- The DTC participant number, a four-digit number that identifies the delivering firm within the Depository Trust Company system. You’ll find it on your brokerage statement or by searching the firm’s name on DTCC’s participant list.
- A copy of your most recent account statement, so all ticker symbols and share quantities are recorded correctly on the TIF.
- Your Social Security number or taxpayer identification number, matching what the delivering firm has on file.8Interactive Brokers. ACATS Transfers – Broker Information
For full account transfers, you’ll also need to confirm that you’ve destroyed or returned any debit cards and unused checks tied to the old account.3FINRA. FINRA Rule 11870 – Customer Account Transfer Contracts If any of your holdings fall into the categories that can’t ride ACATS, decide in advance whether you want them liquidated or left behind, and confirm the plan with both firms before submitting the form.