Account Closure Procedures
Chapters in this video
- 0:00 Meet Carla and Riley: the closure roadmap
- 1:04 Voluntary closure and the ACATS 3-business-day rule
- 2:52 Firm-initiated closure, CIP/AML, and 6-year records
- 3:59 Margin account wind-down and forced liquidation
- 4:59 Death of the account holder: cancel orders, then freeze
- 6:28 JTWROS vs TIC and the probate split
- 6:36 Escheatment, dormancy, and dividends as activity
- 7:46 Rapid-fire exam recap
What this video covers
- Why a customer can close at any time, why written instructions matter, and why the firm cannot block a transfer
- How the Automated Customer Account Transfer Service (ACATS) works: 3 business days (not calendar days), and why the receiving firm initiates the transfer
- When a firm can fire a customer, including Customer Identification Program (CIP) and Anti-Money Laundering (AML) failures, plus the 6-year record retention rule for closed accounts
- How margin account closures differ from cash: debit balances settled, short positions covered, and forced liquidation if the customer does not pay
- The exact procedural order on death of an account holder: cancel open orders first, then freeze the account, then await the certified death certificate and letters testamentary
- Why Joint Tenants With Rights of Survivorship (JTWROS) bypasses probate while Tenants in Common (TIC) shares pass to the estate
- How escheatment works under state law, the typical 3 to 5 year dormancy window, and why dividend and interest payments count as account activity
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. When you're ready to drill the topic, the full Series 7 course adds adaptive practice questions and spaced-repetition flashcards.