Account Transfers Between Broker-Dealers
Chapters in this video
- 0:00 Why Carla initiates the transfer at the new firm
- 2:00 The ACATS 1-3 rule and the FINRA timeline
- 2:46 Freezing the account, cherry-picking, and non-transferable assets
- 4:53 ACATS vs transfer agents: FINRA vs SEC
- 5:41 The 3-month educational communication rule for recruited reps
- 7:30 Rapid-fire exam recap
What this video covers
- Why the customer initiates a transfer at the receiving (new) firm, not the carrying (old) firm, by signing a Transfer Instruction Form (TIF)
- The 1-3 rule under the Automated Customer Account Transfer Service (ACATS): 1 business day for the carrying firm to validate, then 3 business days to deliver assets
- What the carrying firm must do upon validation (freeze the account, cancel open orders) and the valid exceptions it can raise
- Why the receiving firm must accept or reject the entire account, with no cherry-picking of positions
- How non-transferable assets are handled, including the customer's written disposition instructions and the 5-business-day window
- The identity-crisis distinction: ACATS is regulated by the Financial Industry Regulatory Authority (FINRA), transfer agents are regulated by the Securities and Exchange Commission (SEC)
- The educational communication rule for a recruited representative: required for 3 months after the rep's start date, at first individualized contact, and exempt for institutional (non-natural-person) accounts
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