What is a Medallion Signature Guarantee?
A medallion signature guarantee is a verification stamp provided by financial institutions such as banks, credit unions, or broker-dealers to guarantee the legitimacy of documents they sign. These institutions must be members of the Medallion Program to offer this service.
Financial industry regulators must approve these documents. While MSGs do not expire, they only remain valid during transactions for which they support.
Medallions are a form of security
Medallion Signature Guarantee (MSG) stamps provide assurance of authenticity of signatures on important documents, often those related to financial transactions and legal agreements involving high-value assets like stocks. Issued by an approved institution such as a bank or credit union, MSGs embed security features that prevent forgery while also taking on liability in case any fraudulent activities take place.
Stamps are typically required when transferring securities or selling stocks, and often provided by financial institutions that belong to medallion programs such as STAMP or SEMP. This enables transfer agents to continue with transactions.
To obtain a medallion signature, individuals will need to visit their bank or credit union with valid identification. They will also need to submit documentation such as recent account statements and proof of securities ownership; not all banks and credit unions provide this service so it is wise to inquire early.
They are issued by financial institutions
Numerous financial institutions – banks, credit unions and investment brokers alike – provide medallion signature guarantees as an aid in verifying whether parties signing securities transfers are legitimately authorized to do so and thus helping prevent fraudulent activities.
Acquiring a medallion signature guarantee can be complex, and may take several days from a bank or institution. But you can speed up this process by asking questions and gathering paperwork in advance.
While online options exist, it can often be more convenient and expeditious to visit a physical branch of a bank offering medallion signature guarantees. An officer of the bank usually applies the stamp directly onto documents for you; fees vary based on transaction size (ranging from $50-100+), due to its increased liability exposure – so make sure that you understand this amount prior to requesting one!
They are a legal document
As an estate administrator with shares listed on US or Canadian stock exchanges, it’s likely you will require a Medallion Signature Guarantee (MSG) stamp in order to transfer or sell them. An MSG guarantees the signature authorizing transfer is genuine while also accepting responsibility in case any forgery takes place.
To obtain a medallion signature guarantee, visit a financial institution offering this service and bring with you two forms of identification as well as a signed document showing both your signature and that of the company whose securities you’re transferring. Generally this process can take up to five days; therefore it is wise to plan ahead.
A medallion signature guarantee stamp is a green stamp that certifies that a signature on an endorsed stock certificate is genuine, accepting responsibility for any possible forgeries by financial institutions affixing it. Similar to notary stamps but designed specifically for use within the securities industry and with high-security green ink.
They are a good investment
The medallion signature guarantee stamp is designed to reduce transfer agent liability when accepting documents endorsed by investors or brokers that contain endorsements that bear their signatures. It consists of an imprint featuring a code which indicates its maximum monetary guarantee as well as dates of issue and serial numbers – typically investors or brokers must contact an institution approved by The Medallion Signature Guarantee Program (STAMP) before requesting one for themselves.
Medallion signature guarantees not only verify a signer’s identity and signature, but also their legal authority to transfer securities. They can be essential when moving securities between accounts, giving as gifts or administering an estate of an deceased individual.
As opposed to notary stamps, medallion signature guarantees are backed by assets owned by financial institutions and require extensive verification and screening before becoming available to established clients of banks or credit unions – for instance Bank of America will only offer it after being an active client for six months or more.
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