The NSCC cut a day from its transfer service settlement process and will add modern client interfaces.
Grygo is the chief content officer for FTF & FTF News.
Self-regulatory organization FINRA recently reminded securities firms that the National Securities Clearing Corp. (NSCC) has modified the transfer process for its Automated Customer Account Transfer Service (ACATS), established in 1985 to facilitate “the smooth and electronic transfer of assets, like stocks, bonds, and cash, from one brokerage firm or bank to another,” according to the Depository Trust & Clearing Corp., (DTCC), which oversees the NSCC.
In particular, the electronic transfer activity is governed by FINRA Rule 11870 (Customer Account Transfer Contracts), which requires FINRA members “to use automated clearing agency customer account transfer services when both members are participants in the clearing agency” and to “expedite and coordinate activities with respect to the transfer.”
For years, NSCC has been working with industry members to “streamline the ACATS process and shorten the time to complete a customer account transfer through ACATS,” officials say. “Where it once took weeks or months with manual processes and paperwork, it now takes between just four and five business days for a standard (full) ACATS transfer to settle,” according to the DTCC.
Ultimately, the NSCC removed the settlement preparation stage (or the Settle Prep Day) from the ACATS transfer process, and that became effective on Oct. 17, 2025. Full transfers are now processed in “just 3-4 business days. It will also eliminate the extra day required to process mutual funds and options, which will now synchronize with all other securities from a settlement perspective.”
Of course, being an intrepid nuts-and-bolts journalist, I reached out to get more information so that our readers could get a fuller view of the situation. I initially reached out to FINRA officials, who referred me to the DTCC. Bill Kapogiannis, executive director, head of equities clearing products at DTCC, took time out of his busy schedule to answer my wonky inquiries. I asked him how the removal of one day from the settle prep stage can improve operations.
“The removal of one day from the settle prep stage marks a step forward in operational efficiency for the ACATS process. By shortening the full transfer cycle, DTCC is helping firms deliver faster access to assets for their clients, which can enhance the investor experience,” Kapogiannis says.
“Streamlining the ACATS process also expedites processes in line with the industry’s continued focus on increasing efficiencies and reducing risk, such as the recent U.S. move to T+1 in 2024. This enhancement also reflects DTCC’s commitment to modernizing post-trade infrastructure and supporting a more resilient and responsive financial ecosystem, and was delivered with industry support,” he adds.
I also wanted to know what firms should be doing to their operations to make the most from this change.
“All firms accommodated this enhancement, which was launched last month, by coordinating efforts between transfer operations and settlement operations to ensure readiness and the ability to support next-day settling assets,” Kapogiannis says.
So, what should firms do if they encounter problems related to this change to the ACATS system?
“The enhancement is in production, after being successfully deployed on October 17. DTCC remains committed to supporting market participants in enhancing efficiencies and reducing risk for the financial services industry,” Kapogiannis says
I subsequently saw that this past September, DTCC officials noted the shortening by one day and that “by October 2026, client interfaces will be modernized for greater flexibility and faster business expansion” in a DTCC Connection article on the system’s transformation. The interfaces to come will “offer more efficient workflows, stronger resiliency, and extensibility for new features like 529 plan data transfers.”
In addition, the transformation includes enhanced messaging capabilities such as replacing legacy file transmissions with modern messaging options such as JSON [JavaScript Object Notation] and MQ, enabling real-time processing and improved transparency across systems,” according to the DTCC.
“Upgrades to the ACATS message formats and communication protocols are currently in production, and firms are migrating to the new interfaces at an increasing rate in preparation for the October 2026 decommission of the legacy file formats,” DTCC officials say.
The new client interfaces are intended to deliver “a more efficient workflow process, stronger resiliency of services, and enhancement flexibility by providing extensible formats,” according to DTCC officials. “All new features to ACATS will be added only to the new formats.”
“The industry’s ACATS transformation and the shift to a shortened settlement cycle have been pivotal in advancing our system modernization journey,” says Melanie Guyan (Miller), vice president at Morgan Stanley, in a prepared statement. “These initiatives not only enabled scalable, efficient solutions aligned with our strategic platform renovations, but also empowered us to deliver meaningful user enhancements, close long-standing operational gaps, and enable real-time messaging and transparency across upstream and downstream systems.”
More information the transformation is available at: https://shorturl.at/lSPPx
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