What is a Medallion Stamp and Why Do I Need One?
Medallion stamps provide assurance that the signature on a transfer document is authentic, while also accepting liability in case of forgery by financial institutions such as banks, credit unions or broker-dealers. They’re often provided by these entities.
These institutions are reluctant to provide loans without careful consideration because doing so exposes them to significant liabilities; consequently, these products are difficult to come by.
The Financial Institutions That Provide Them Are Reluctant
People selling or transferring securities will typically be asked to sign a medallion signature guarantee when selling or transferring securities, unlike when notarizing documents. This ensures that whoever signed an individual document is who they say they are with legal authorization to sign and that financial institutions accepting liability will take responsibility if forgery occurs.
Medallion signature guarantees are often utilized when dealing with physical certificated assets like stocks and bonds; however, they can also be utilized with real estate investments and annuities. Financial institutions that issue them tend to only dole out these guarantees to those with longstanding relationships with them or accounts in that institution.
Institutions typically require applicants to present various documents proving their identity and ownership of securities before accepting an application for a medallion signature guarantee. Examples of such documents may include government-issued ID, account statements and any relevant paperwork – this process can often take weeks or even months before approval can be granted.
The Documents That Need To Be Attested Are Time-Sensitive
Signature stamps issued by financial institutions guarantee that an endorser on a document is who they claim they are, legally own the shares or securities being transferred and limit transfer agent liability in the event that one or more signatures later prove false. A medallion signature guarantee can only be provided by financial institutions participating in an official medallion program.
To secure a medallion signature guarantee, it’s necessary to go through a commercial bank, savings bank, credit union or broker dealer that participates in the Medallion program and provides this service for its customers. Therefore it’s wise to inquire at local banks whether they offer this service and verify if they can indeed provide medallion signature guarantees in accordance with your transaction amount.
Due to advancements in digital banking and financial services, getting a medallion signature guarantee has become considerably simpler than before. You can now quickly verify your identity online with notary service providers that belong to an established medallion program before having your document attested in mere minutes.
The Documents That Need To Be Attested Are Expensive
Documents that need to be attested can be quite expensive. For instance, investors who must sign a security power or stock certificate require a Medallion Signature Guarantee Stamp (MSG), a bright green stamp that certifies signature authenticity while attesting that any institution offering this stamp accepts liability in case of forgeries.
To obtain an MSG, investors should visit one of the many banks, credit unions or broker dealers participating in the Medallion program and pay their respective fee for this service. When signing their document they must also present government identification as well as two forms of contact info in addition to receiving the stamp on it.
Because these documents expose financial institutions to significant risks and liabilities, they don’t issue them casually or to just anyone. Instead, they prefer providing them to long-term customers who can verify their identities before providing these documents with Medallion ink instead of regular green ink – making it harder for forgers to steal your assets without your knowledge. Hence the need to leave enough time and double check when selling or transferring securities so as to acquire MSGs in order to safeguard investments. The process may seem complex but its worth the time invested to protect investments!
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