What is a Medallion Signature Guarantee?
A Medallion Signature Guarantee is different than a notary stamp because it guarantees and protects transfer agents and corporate stock issuers against fraudulent transactions. Financial institutions that provide Medallion Signature Guarantees must subscribe to this program and be issued a Medallion Guarantee Stamp. Some financial institutions that provide Medallion Signature Guarantees are stock brokerage firms, banks, and credit unions. A stock transfer agent cannot accept a stock certificate for transfer without a Medallion Signature Guarantee unless the certificate is being transferred into exactly the same name.
This is required to guarantee the signature of the registered shareholder whenever the shareholder decides to transfer registered shares of stock. The institution processing the transfer must have some guarantee that the shareholder is authorized to transfer the shares of stock. The application of a Medallion Signature Guarantee provides the authentication of the guarantor that the endorser of the stock certificate is the registered owner and has the legal authority to sign the certificate. Most major banks and brokerage firms are members of this program and serve as guarantors. This protects the shareholder, any buyer of the shares, the issuing company, and any transfer agent for the issuing company.
The medallion signature guarantee is not a notarization. It is a statement (stamp and signature) given by a financial institution that is a member of the Securities Transfer Association Medallion Program, NY Stock Exchange Program, or Stock Exchange Medallion Program, such as a bank, credit union, brokerage firm, etc. 11.
A program developed by the Securities Transfer Association to meet the requirements of a rule set forth by the Securities and Exchange Commission which broadened the number and type of financial institutions eligible to guarantee signatures. By medallion guaranteeing the stock to be sold, assigned and transferred, the guarantor is taking financial responsibility if the transfer is completed fraudulently.
A Medallion Signature Guarantee is a stamp provided by a financial institution to verify that a signature is valid. It allows ShareBuilder Securities Corporation to ensure that the signature(s) are legitimate prior to taking any action with your account. It also lets you know that the financial institution is registered as a member of the Securities Transfer Agents Medallion Program. Note: You can obtain a Medallion Signature Guarantee at a commercial bank, credit union, brokerage firm, savings association, or any financial institution who is an approved member of the program.
