FINRA reminded broker-dealers of their obligations when transferring customer securities account assets from one broker-dealer to another using the Automated Customer Account Transfer Service ("ACATS"). The ACATS system "automates and imposes specified duties and performance timeframes to facilitate the transfer of accounts, in whole or in part, from one firm to another."

In a Regulatory Notice, FINRA said broker-dealers transferring customer account assets have the option to utilize the "receiver delete" function in ACATS to filter out non-transferrable assets. When using the "receiver delete" function, broker-dealers must:

  • expedite customer requests to transfer securities account assets and coordinate with the receiving firm; and
  • transfer all available assets, unless an asset is determined to be non-transferable, pursuant to FINRA Rule 11870 ("Customer Account Transfer Contracts").

Additionally, if a receiving firm utilizes the receiver delete function to remove non-transferrable assets, that broker-dealer is required to provide customers with a list of the assets and request written instructions regarding their disposition prior to designating the assets as non-transferrable.