Why was my account transfer rejected?
Transferring brokerage accounts through the Automated Customer Account Transfer Service
(ACATS) can sometimes lead to rejections. Understanding the common causes and processes
involved can help mitigate issues. Here’s some information regarding ACAT rejections.
What is ACATs?:
The Automated Customer Account Transfer Service (ACATS) is a system designed to facilitate
the transfer of securities from one brokerage account to another, ensuring a streamlined process
for investors looking to change firms.
Common Causes of ACAT Rejections
- Documentation Issues
- Missing or Incorrect Documentation: If additional documentation is required (e.g., legal documents for account changes), the transfer may be rejected until these are provided.
- Transfer Instruction Errors: Errors in the Transfer Initiation Form (TIF) can lead to rejections. Ensure all information matches exactly with the delivering firm's records.
- Account Status
- Flat Accounts: If the account has no transferable assets, it will be rejected.
- Insufficient funds to cover the transfer fee from your other brokerage.
3. Account Information Mismatches
- Social Security Number/Tax ID Mismatch: The tax identification number must match between the two firms.
- Account Title or Type Mismatch: The title and type of account must correspond with what is on record at the delivering firm.
4. Credit and Compliance Issues
- Credit Policy Violations: If transferring the account would violate the receiving firm’s credit policies, it may be rejected.
5. Duplicate Requests
- If a transfer request has already been submitted for the same account, any subsequent requests will be considered duplicates and rejected.
6. Customer Actions
- Customer Rescinded Request: If the customer cancels their transfer request in writing, it will not proceed.
- Assets Taken Possession: If assets have been transferred directly to the customer instead of through the brokerage, this will also cause a rejection.
What happens after a rejection?
Upon rejection, the delivering firm must provide an explanation for the denial. This allows customers to correct any issues before resubmitting their request.
How can I avoid rejections?
- Verify Information: Ensure that all personal information and account details are accurate and match exactly between both firms.
- Consult Both Firms: Before initiating a transfer, check with both your old and new firms regarding their requirements and any potential issues that could arise.
- Prepare Documentation: Have all necessary documentation ready in case it is needed during the transfer process.
If your account transfer is rejected, you will see a prompt to submit a new account transfer. Please contact our team at help@composer.trade for any questions and we can assist you.