Overview of the Transfer Process
At a high level, a standard or full transfer follows these steps.
- Receiver initiates a transfer by submitting a transfer input (TI) record that is sourced from the transfer initiation form (TIF) completed by the account owner.
- ACATS assigns a control number to the transfer and distributes the output to both parties. Exception: system rejects are reported only to the submitting firm.
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Deliverer responds within one business day by either adding assets to the transfer or by rejecting the transfer. If the deliverer does not respond, ACATS adds the transfer to its self-regulatory organization (SRO) reporting.
Note SRO reporting does not apply when at least one side of the transfer is a bank.
- Both the receiver and deliverer review the assets that were added to the account. The 200–Review status can last the remainder of the day that the deliverer added assets and through the next business day provided that the receiver does not accelerate the transfer.
- Deliverer can add, delete, or modify an asset or assets in the transfer provided that the transfer is not in a 230‑Review Accelerate or 240–Review Adjust Receiver Accelerate status. After a transfer accelerates to the 230‑Review Accelerate or 240–Review Adjust Receiver Accelerate status, the deliverer cannot make any updates to the transfer in subsequent cycles. If the transfer has not been accelerated and the deliverer takes any of these actions, ACATS updates the transfer to the 210–Review Adjust Deliverer status and adds an additional day onto the transfer.
- Receiver submits the mutual fund and insurance registration instructions, if the transfer contains these asset types. For mutual funds registrations, accelerating the transfer allows the fund registration to go to the fund company earlier in the day. The receiver can delete a mutual fund, annuity, or alternative investment asset after acceleration. For information about input deadlines for mutual fund registration transactions, see Timing of the Fund/SERV Statistics File.
- ACATS stages the transfer for settlement after the review period is complete and the receiver has added registration instructions, if applicable. At this point, the receiver and deliverer cannot process any updates to the transfer. The 300–Settle Prep status lasts for one business day.
- ACATS issues a settlement report to both the deliverer and receiver to inform them of the assets settling in the transfer. ACATS also sends the settling assets to their eligible settlement interfaces, such as CNS, DTC, or Fund/SERV. Both parties to the transfer update their systems and prepare for the settlement of assets.
- The transfer settles. The transfer is now in the 310–Settle Close status, which begins the settlement of the assets.
For most non-CNS eligible securities on broker to broker transfers, the deliverer of the asset is debited the market value of the asset and the receiver is credited the market value of the asset through NSCC money settlement. These charges incentive the deliverer to deliver the asset and allow the receiver to record the customer on its books on ACATS settlement date, insulating the firm from the settlement process. Cash assets in broker-to-broker transfers are debited and credited through NSCC money settlement and netted with incentive charges described above. Cash assets in transfers with a bank settle through a security payment order (SPO) charge at DTC.