The following is not meant to be legal advice.
ACAT form is discussed under NASD Rule 11870. A customer may sign an ACAT form to do transfers in a mutual fund account. It is okay to use negative response letters for accounts held directly by a mutual fund, not a broker-dealer? Usually mutual fund accounts are held at the mutual fund, not the broker-dealer. Mutual fund accounts are not moving from the mutual fund. There is simply a change of name on the broker-dealer, on the mutual fund account statements as to who is the designated broker-dealer to receive commissions.
Accounts held at an old broker-dealer will be transferred to the other broker-dealer through ACAT. Use the negative response letter to inform customers whether there is a problem on changing the broker-dealer designated to receive commissions.
When just making an announcement on a name change, bank stationary may be used. For a negative response letter, it should be an investment services program name stationary and signed by someone who is a NASD registered.
The custom time is 30 days between the time the letter goes out and the accounts are transferred.
Comment Preview