Transferring Accounts Between Brokerage Firms

In case you choose to transfer your investment accounts to some other broker, you need to follow certain procedures. It’s possible to transfer your shares, bonds and other securities without selling them. According to the Financial Industry Regulatory Authority, the ordinary account transfer takes about 10 days.

Function

Account transfers involving brokerage companies are accomplished through the Automated Customer Account Transfer Service–ACATS. The ACATS system transfers your own securities from the old broker account into the new account. The ACATS transfer is initiated with your agent after you’ve turned in the required paperwork. ACATS has been operated by the National Securities Clearing Corporation.

Identification

The accounts transfer process is initiated through your brand new brokerage account. Receive a transfer request form from the new broker. Complete the form and return it to the new broker together with an account statement in the aged broker account. The transport company will require the name of their old broker, account number, your social security number and the account name. It’s important to put your name on the transfer form exactly the same as it appears on the aged broker account.

Outcomes

Your new broker will commence the transport process through the ACATS system. When it receives the request, your old broker company will review the accounts for transferable assets and margin loans. The older brokerage company has 3 business days to determine if the securities from the accounts are transferable. In the event the securities could be transferred, the transfer will be completed within 6 business days of this request. When there’s an issue with the transfer request, the older brokerage company will reject the transfer request.

Significance

Particular forms of investments and securities can’t be transferred through the ACATS system. These securities should be liquidated or transferred before the electronic transfer can be completed. Kinds of nontransferable securities include stock shares of bankrupt businesses, private positioning limited partnerships, securities sold exclusively from the older broker, mutual funds not taken by the new broker and annuities. The old company may transfer the securities that do not belong to these kinds to obey the transfer request.

Considerations

It’s important to communicate with your new and old broker companies to check on the status of your transfer request. If nothing occurs with a request within 6 weeks, it is going to be dropped from ACATS and need to be resubmitted. Your accounts could be frozen out of trading whereas the transport request is busy. Your old brokerage company may charge a fee for the transfer. For instance, E-trade charges $25 to $60 for an outgoing transfer request.

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