Medallion Stamp and Medallion Signature Guarantee
Medallion stamps are green seals used to transfer securities. They verify that signatures on stock power or bonds are genuine and will hold financial institutions affixing them responsible if there is any suspicion of forgery.
Finding and applying for a medallion stamp can seem like an daunting process, but there are ways to streamline its review and filing processes while adhering to regulatory compliance.
What banks offer medallion signature guarantee (MSG) stamps?
Medallion Signature Guarantees (MSGs) are stamped or endorsers that verify your signature on securities transfer forms. Financial institutions such as banks, credit unions and broker-dealers that participate in either the New York Stock Exchange Medallion Program or Securities Transfer Agents Medallion Program (STAMP) may provide these guarantees.
Most financial institutions will not issue an MSG to someone who isn’t an existing customer due to the liability associated with forgery; typically they charge a nominal fee for this service.
One reader in an online forum reported that his local branches of Citibank, Wells Fargo and HSBC offered MSGs but only to customers within their own banks. If banks won’t stamp your transfer forms for you, an alternative signature guarantee like notary may work; however this requires additional documentation and approval by issuer. Being aware of the process ahead of time ensures your documents are ready when required.
What documents do I need to get a MSG stamp?
To be eligible for an MSG stamp, a medallion signature guarantee from an eligible institution such as a commercial bank, trust company, credit union, security broker or dealer, or other financial institute approved by the Securities Transfer Association will be needed.
To verify the signature on a stock power and that you are legally permitted to act as the owner, proof of identity should also be presented – in this instance current, non-expired government issued identification is sufficient. Furthermore, if acting on behalf of another individual or entity such as acting as beneficiary or executor for an estate there may be additional documentation such as power of attorney documents, trust agreements, death certificates and corporate resolutions necessary.
Not all banks provide this service and those that do often charge fees for providing it; so it’s best to only apply for an MSG with banks with which you already have an established relationship.
How do I get a MSG stamp?
Stamps are typically issued by banks, credit unions and financial institutions participating in the Medallion program. This can include commercial banks, trust companies, savings associations and credit unions that adhere to the Federal Deposit Insurance Act as well as registered broker-dealers. You should check with your bank whether or not they provide this service – online directories also list banks offering medallion services.
Stamps are typically used to verify that a signature on a transfer request is genuine and that its authorisation has been legally established, such as in protecting shares traded on US stock markets from theft and fraud. Each stamp comes with its own coded prefix that specifies its guaranteed maximum number of transactions; any transactions exceeding this level are automatically rejected by the system. Stamps affix to documents similarly to notary seals do and both require identity verification such as photo ID verification.
How do I get a MSG stamp approved?
As is the case when getting documents notarized, MSG requires visiting your bank or financial institution with valid identification in order to receive their services and undergo strict verification and authentication processes for both yourself and the documents involved in a transaction between $100-175K. This process typically takes one-seven business days and costs $50-75 depending on its complexity.
A stamp with an alphanumeric signing number and the guarantor’s name and signature prevents fraudulent transfer of securities, often needed when moving physical stock certificates between accounts or after an investor dies. Kemark Financial Services administers the STAMP Program and charges members an annual membership fee as well as leasing medallion signature guarantee imprinting equipment with special ink to deter counterfeiting; otherwise your bank or credit union may charge higher rates to perform this service for you.
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