Transfer Switch

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If it's a service rated ATS, then it doesn't matter, the breaker in the ATS will protect it. If it's not service rated, then an OCPD ahead of it is required that is properly rated. In this case, 200 amps. If you are using fuses as the OCPD, then I think that a sign on the disconnect such as "maximum safe fuse size is 200 amps" would be sufficient.
 
There is also a physical size difference between 400 and 200 amp fuses.
 
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