Medallion Signature Guarantee What It Is and Where to Get One
Medallion Signature Guarantee: What It Is and Where to Get One
What Is a Medallion Signature Guarantee?
A medallion signature guarantee is a special certification stamp that guarantees an authorized signature for the transfer of securities. It is required when an owner wants to sell or transfer securities held in physical certificate form. If an owner holds securities through a broker, a signature guarantee is not necessary.
Key Takeaways
– A medallion signature guarantee authenticates the transfer of securities.
– To provide a medallion signature guarantee, an institution must be a member of a specific program.
– Usually, you can get a medallion signature guarantee at your existing financial institution.
– This guarantee is typically required for securities held in physical certificate form, which is becoming less common for individual investors.
How Medallion Signature Guarantees Work
To provide a medallion signature guarantee, an institution must be a member of one of three specific programs: the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), or the New York Stock Exchange Medallion Signature Program (MSP).
You can usually obtain a medallion signature guarantee at your financial institution. There may be a small fee for this service, depending on your relationship with the institution and the value of your assets. The process can take between two and five business days for review.
Common Reasons for Needing a Medallion Signature Guarantee
Medallion signature guarantees are commonly used when securities are gifted, moved from one account to another, or when the owner passes away.
Medallion Signature Guarantee and Share Certificate
A medallion signature guarantee often corresponds with a share certificate, which serves as proof of ownership of a specific number of a company’s shares. Share certificates provide key information such as the certificate number, company name and registration number, shareholder name and address, number of shares owned, class of shares, and more.
Shares may have separate classes with different rights. If a share certificate is damaged, lost, or stolen, a replacement certificate can be issued. Today, electronic records are more commonly used for share ownership.
Which Banks Offer Medallion Signature Guarantee?
Many U.S. banks offer medallion signature guarantee, but not all branches provide the service. Large institutions like Bank of America, Chase, and Capital One typically offer this guarantee. If a branch doesn’t have an on-site reviewer, the documents must be sent for review.
How Long Is a Medallion Stamp Good for?
A medallion stamp is valid on the day it is signed.
How Much Does It Cost to Get a Medallion Signature?
The cost of a medallion signature guarantee varies depending on the institution and the value of the assets. Some institutions may waive the fee for established customers.
Why Is a Medallion Signature Guarantee So Hard to Get?
Medallion signature guarantees involve financial risks and liabilities, so institutions are cautious about issuing them. They are usually provided to well-established customers for a nominal fee.
The Bottom Line
A medallion signature guarantee is necessary for authorizing the transfer of securities. Financial institutions must be members of specific programs to provide this service due to the associated risks. This guarantee is commonly required for securities gifting, transfers upon the owner’s death, and moving assets between accounts.
