Securities Industry Essentials (SIE) ExamUnderstanding Trading, Customer Accounts, and Prohibited ActivitiesMedium
A client wants to transfer their account from one broker-dealer to another. Which document initiates the Automated Customer Account Transfer Service (ACATS) process?
- APower of Attorney
- BNew Account Form
- CCustomer Account Transfer Form (TIF)
- DLetter of Authorization
Show answer & explanationAnswer & explanation
Correct answer: C. Customer Account Transfer Form (TIF)
The Customer Account Transfer Form (TIF), sometimes called the ACATS form, is the standardized document used to initiate the transfer of a customer's account from one broker-dealer to another via the ACATS system.
Why the other options are wrong
- A. A Power of Attorney grants trading authority or other legal powers, not an account transfer.
- B. A New Account Form is used to open an account, not transfer an existing one.
- D. A Letter of Authorization might grant specific permissions, but not initiate a full account transfer through ACATS.
ACATS Transfer
Automated Customer Account Transfer Service (ACATS) is a system that automates and standardizes the transfer of customer accounts between broker-dealers.
- Facilitated by the National Securities Clearing Corporation (NSCC).
- Initiated by the Customer Account Transfer Form (TIF).
- Designed to make account transfers efficient and reliable.
Memory trick: ACATS: 'All Customers Account Transfer Smoothly'