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In response to events relating to the close-out of Lehman Brothers in 2008, NSCC and DTC engages with the industry to improve efficiency and reduce risks associated with transactions processed through the Automated Customer Accounts Transfer service (ACATS) system. Previous initiatives focused on CNS-eligible and mutual fund ACATS obligations.

The ACATS settlement process includes efficiency and risk reduction for ACATS transfers of CNS-eligible securities and assets that are eligible for settlement at DTC, but not in CNS (non-CNS DTC-eligible assets).

The changes address processing and risk-related concerns with respect to ACATS processing of CNS-eligible securities and non-CNS DTC-eligible assets:

  • NSCC tracks non-CNS DTC-eligible ACATS obligations on ACATS settlement date and reverse only those uncompleted transactions of the defaulting member in the event of a default. Previous initiatives focused on reversals of CNS-eligible and mutual fund ACATS obligations.
  • NSCC tracks CNS ACATS transactions in case of multiple member defaults on the ACATS settlement date.
  • Non-CNS DTC-eligible items are credited to a no lien location in the same way as CNS eligible items.

To learn more about the ACATS Settlement Process for CNS and DTC eligible assets, see ACATS Users and ACATS Best Practices sections.

CNS® ACATS and DTC Frequently Asked Questions

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