What is a Medallion Stamp and Why is it So Hard to Get One?
Medallion stamps, also known as signature guarantees, are used to verify the identity of anyone signing documents and are typically required when transferring securities. They are secured against bank assets.
Gaining access to medallion stamps may prove challenging due to banks and credit unions being wary of taking on large financial liabilities; however, there are steps you can take to increase your chances of success:
Banks Are Reluctant
Medallion signature guarantees are special stamps designed to limit financial institutions’ liabilities in case someone forges their signature. Because banks and other institutions assume so much risk when providing medallion guarantees, they typically only issue them to customers they know well and won’t allow anyone else use the special green stamp without proof of identity.
Banks, credit unions and broker dealers that participate in medallion programs can offer you medallion signature guarantees. Only these entities have access to this special bar code authenticated stamp with its own serial number – required when selling securities within US and Canada. A medallion signature guarantee provides assurance to transfer agents that you are who you say you are as well as having legal authority to act for another individual such as acting as power of attorney or executor.
It Can Be Expensive
Due to costs and liability concerns, financial institutions tend only to offer medallion stamps to their existing customers. One reader mentioned how his local branches of Citibank, Wells Fargo and HSBC only offered this service for customers with bank accounts.
A medallion signature guarantee differs from notary seals in that it verifies both your identity and that the document being signed is genuine. A notary is only responsible if any false documents have been presented for signature; with medallion signature guarantees you’re insured that it’s you transferring securities whose signatures are genuine.
Where should I obtain a medallion signature guarantee? Ideally, at your bank or brokerage firm where your investments are stored. That way, they can compare your signature on certificates being transferred with what’s on file and ensure both signatures match authentically. Some guarantor institutions may charge a small fee; typically though the fee should remain nominal.
It Can Be Time-consuming
When transferring stocks or other financial assets in physical certificate form, an authentication seal such as a medallion stamp is essential for authenticating signatures on transfer forms or securities power of attorney documents. Banks, credit unions and broker dealers that participate in medallion programs offer these services.
This green stamp symbolizes that any forgeries that occur are accepted responsibility by the institution that placed it there. Do not confuse this stamp with notary stamps which certify that document signers are who they say they are.
Medallion signature guarantees require extensive verification and authentication, unlike notarization which usually only requires that the name on a document matches that on its passport or driver’s license. Therefore, they can take quite some time to obtain and may involve numerous trips to various financial institutions in order to be completed successfully.
It Can Be Confusing
An MSG differs from a notary stamp in that its issuer pledges their assets if your signature turns out to be faked and must cover its cost. Notaries tend to focus more on you personally while MSGs put firm assets on the line to cover any possible fraudulence of signature.
Financial institutions such as banks, credit unions, savings and loan associations and broker dealers often offer MSG certification services. After verifying your identity they will stamp a document with this certification. Typically they charge a small fee; usually however the difference in costs will be minimal.
If you need an MSG, the first step should be contacting banks that you use regularly. They may be able to provide one free of charge as long as you’re an existing customer; otherwise it will likely cost significantly more. Also check with other financial institutions in your area whether or not they provide this service; some might require minimum values before stamping your MSGs; be sure to verify this before visiting!
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