What is a Medallion Guarantee?
In the United States, a Medallion Guarantee is a special signature guarantee for the transfer of securities. It is a guarantee by a financial institution that the signature is genuine and the financial institution accepts liability for forgery. Signature guarantees protect stockholders by preventing unauthorized transfers and possible investor losses. A Notary Public certification is not the same and is not acceptable for this purpose. This guarantee is normally obtained from selected banks or other financial institution such as a broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents’ Medallion Program (“STAMP”). Different institutions have different policies as to what type of identification they require to provide the guarantee and whether they charge a fee for such service. Most institutions would not guarantee a signature of someone who has not already been their customer.
A Medallion Guarantee takes the form of a stamp and signature on a stock certificate or stock power and confirms that the signature on a certificate or stock power is genuine. A Medallion Guarantee is obtained from an eligible institution, such as a commercial bank, broker, trust company, etc. Only institutions participating in an officially recognized Medallion Guarantee program may provide this Medallion Guarantee.
A Medallion Guarantee takes the form of a stamp and signature on a stock certificate or stock power. A Medallion Guarantee is obtained from an eligible institution, such as a commercial bank, broker, trust company, etc. It provides transfer agents assurance that the person signing a stock certificate or stock power is the authorized individual. Only institutions participating in an officially recognized Medallion Guarantee program may provide this Medallion Guarantee. The three officially recognized signature guarantee programs are Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), and NYSE, Inc. Medallion Signature Program (MSP).
A signature guarantee is a warranty by the signature guarantor that the endorser of a stock certificate or stock power form is an appropriate person to endorse and thus transfer the security. Signatures on a stock certificate or stock power must have the Medallion Guarantee. A Medallion Guarantee is also used to validate the genuineness of a document. It is backed by a bond and protects the issuer of the security and their transfer agent from fraudulently transferred securities. A Medallion Guarantee may be obtained from most major banks, brokerage firms or credit unions.
