What Is an ACAT Transfer and How Does It Work?

An ACAT transfer is the standard way to move a brokerage account from one firm to another without selling anything. It runs through the Automated Customer Account Transfer Service, an electronic system that shifts your stocks, bonds, funds, and cash to a new broker while keeping your positions intact. Under FINRA Rule 11870, the electronic portion takes about six business days when nothing goes wrong, though the full move from paperwork to final settlement often stretches across two to three weeks.¹²

You start the transfer at the new firm. It sends the instruction into ACATS, your old firm receives it, and if everything matches, the assets change hands electronically. FINRA rules bind both sides to specific deadlines, and the old broker cannot simply refuse because you’re leaving.

What Moves and What Doesn’t

ACATS handles most of what sits in a typical brokerage account:

Publicly traded stocks
Government, corporate, and municipal bonds
Exchange-traded funds
Open-end mutual funds, provided both firms have a distribution relationship with the fund company
Listed options, though positions expiring within seven business days of the transfer may be excluded from the freeze
Annuities, which route through a linked system that re-registers the contract with the insurance carrier so you don’t have to surrender the policy
Unit investment trusts
Cash balances

Some things won’t move. Proprietary products created by your current firm are treated as nontransferable unless the new broker specifically agrees to accept them.¹ The same goes for third-party mutual funds when your new broker has no distribution agreement with the fund company. In either case, you’ll usually need to liquidate the holding before the transfer.

Fractional shares also can’t ride through ACATS. If you own 10.37 shares, the 10 whole shares transfer and the 0.37 gets sold for cash by your old broker. When those proceeds hit $20 or more, the sale goes on a Form 1099-B for the year.³

How to Start an ACAT Transfer

The move begins at your new broker, not your old one. The new firm gives you a Transfer Initiation Form, or TIF, which is your formal instruction to pull the assets over. Before you fill it in, pull these details from your existing account:

The exact account number at your old firm, including leading zeros
The Social Security or tax ID number on file, which must match exactly
The account title, meaning the registered name and account type
The delivering firm’s identifying number, which your new broker can generally look up

The SEC recommends entering this information exactly as it appears on your old account, down to middle names or initials.² A mismatch will kick the request back automatically.

The TIF asks whether you want a full transfer, where everything moves, or a partial transfer, where you list only certain assets. Some firms want a signature on file; higher-value accounts sometimes need a medallion signature guarantee, a special verification stamp available at banks and brokerage offices.

The Timeline From Submission to Settlement

Once you submit the TIF, the process follows the schedule set by FINRA Rule 11870:

Day one: your new firm enters the instruction into ACATS, which notifies your old firm.
Within one business day: your old firm must either validate the request or object to it on a permitted ground.
Within three business days after validation: your old firm must deliver the eligible assets.

Add it up and the electronic portion should take no more than six business days.¹² In practice, allow two to three weeks once you factor in initial paperwork and residual items.

During the transfer window, your old firm freezes the account. Open orders get canceled, and you can’t place new trades until the process completes. The freeze keeps the list of holdings stable for final settlement. When it finishes, your new broker issues a statement showing the received securities and their cost basis.

Retirement Accounts

ACATS can move IRAs, but the account type has to match on both ends. A traditional IRA transfers to a traditional IRA; a Roth IRA transfers to a Roth IRA. These are trustee-to-trustee transfers, not rollovers, so they don’t count against the IRS one-rollover-per-year limit.⁴

You cannot use an ACAT transfer to turn a traditional IRA into a Roth IRA at the new firm. That’s a Roth conversion, a separate taxable event. If you want to convert, complete the transfer first with matching account types, then start the conversion at the new broker.

Margin Accounts and Pending Trades

Margin accounts add conditions. Your new firm doesn’t have to accept one, and the usual reason for declining is that the account doesn’t meet its credit standards.⁵ Confirm ahead of time that the receiving broker accepts margin accounts and ask about minimum equity.

If there’s a debit balance, your current firm may require you to pay it down or post additional collateral before it will release the assets. To keep your current broker from lending out your securities while a debit balance sits open, you can either pay the balance off or ask the firm to move the holdings into a cash account first.⁵

Because the freeze cancels open orders, settle any pending trades 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 add serious delay.²

Why Transfers Get Rejected

Your old firm can only reject a transfer for specific reasons listed in FINRA Rule 11870.¹ The common ones:

Social Security or tax ID number doesn’t match records
Account title or account type doesn’t match
Account number isn’t on the delivering firm’s books
Signature or custodial approval is missing
Additional legal documents are needed, such as a death certificate, marriage certificate, or court order
You canceled the request in writing before it completed
A duplicate instruction was already submitted
The account’s margin or debit status conflicts with firm policy
The account has no transferable assets

Those are the only permitted grounds. An old broker cannot delay or refuse a transfer just because you’re closing the account. If you think a rejection is improper, you can file a complaint with FINRA. The receiving firm has its own narrow ground for declining, which is that the account doesn’t meet its credit policies or minimum asset requirements.¹

Cost Basis and Taxes

Federal regulation requires your old broker to send a transfer statement to your new broker with the cost basis for each covered security, meaning the purchase price, acquisition date, and any adjustments. This obligation sits in Treasury Regulation § 1.6045A-1 and applies to securities acquired after specific dates, generally 2011 for stocks and 2014 for mutual funds.⁶

For newer holdings, your new broker should have what it needs to report gains and losses when you eventually sell. Older holdings are a different story. Securities purchased before the covered-security dates may transfer without basis information, and the tracking falls to you. Save your old statements and check the received cost basis against them once the transfer settles.

The fractional share sale during transfer is a taxable event. Your old firm reports it on Form 1099-B when proceeds reach $20 or more, and you report the gain or loss on that year’s return.³

Transfer Fees

Most brokers charge an outgoing transfer fee, often called an ACAT fee or account termination fee. The typical range is $50 to $150 per account. Some discount brokers charge nothing; full-service firms tend to charge more. Look up your current firm’s fee schedule before you start.

Receiving firms will often reimburse the fee, especially on larger accounts, either as a cash credit or a promotional offer. Ask before you initiate the transfer. Some brokers require you to submit proof of the charge within a set window after the move.

Residual Credits After the Move

Small amounts of money can still land at the old firm after the account has officially moved. A dividend declared before the transfer date, an interest payment, a refund. FINRA Rule 11870 requires your old broker to forward those residual credits to the new firm promptly.¹

When both firms participate in ACATS residual credit processing, the forwarding is automatic. For transfers handled outside the automated system, the old firm has to keep forwarding residual cash and securities for at least six months, within ten business days of each posting.¹ Watch both accounts for a few months after the move so nothing slips through.

1
FINRA.org. 11870 Customer Account Transfer Contracts
2
U.S. Securities and Exchange Commission. Transferring Your Brokerage Account Tips on Avoiding Delays
3
Internal Revenue Service. Instructions for Form 1099-B (2026)
4
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
5
FINRA.org. Brokerage Accounts
6
eCFR. 26 CFR 1.6045A-1 – Statements of Information Required in Connection With Transfers of Securities