Medallion Signature Guarantee
Medallion signature guarantees are required when transferring securities between financial institutions or brokerage firms, typically completed in person with a representative from a bank or institution that provides this service.
Institutions will likely limit this service to existing members due to the liability it poses.
What is a Medallion Signature Guarantee?
Medallion Signature Guarantees (MSGs) are used by financial institutions to verify the authenticity of securities transfers. A requirement when trading on the New York Stock Exchange, they help prevent unauthorized transfers that could lead to potential investor losses. Banks and credit unions participating in Medallion program may issue MSGs that can be applied by bank officers directly onto transfer forms with a coded prefix that specifies how much value the MSG guarantees.
Banks typically limit MSG distributions to individuals who have been their customer or member for at least several months, as such transactions could expose the bank to significant financial liability if used inappropriately. To reduce risk and to ensure they only provide MSGs to individuals with legal authorization to make transfers. Therefore, banks usually require several forms of verification documents to establish your identity and legal standing for transfer transactions.
Why is it so hard to get a Medallion Signature Guarantee?
Medallion Signature Guarantees (MSGs) are special stamps and signatures used to identify the owner of a security certificate or securities power, required by the Uniform Commercial Code for any transfer of securities or investments. In order to issue MSGs, banks, credit unions and broker dealers must belong to one of three Medallion programs (Securities Transfer Agents Medallion Program, Stock Exchanges Medallion Program or New York Stock Exchange Medallion Signature Guarantees).
Financial institutions differ from notaries public in that their liability for transactions they guarantee is much greater, necessitating caution when issuing guarantees.
As MSGs expose guarantors to significant financial liabilities, they tend to only grant them after having held accounts at the institution for some time. Furthermore, since MSGs require endorsement from specific people or institutions.
How do I get a Medallion Signature Guarantee?
A medallion signature guarantee from a financial institution serves to validate the signature used to transfer securities, typically used by stock owners when selling their stocks or bonds. This type of stamp differs from notary public stamps which serve to authenticate someone signing various documents by verifying identity through notarization processes.
Medallion Signature Guarantees are offered by banks, credit unions and other financial institutions that belong to one of three specified Medallion Signature Guarantee programs in order to provide this service.
Financial institutions providing guarantees must possess sufficient assets to substantiate any accusations of signature forgery; the amount depending upon what kind of transfer and value of assets being transferred.
What banks offer Medallion Signature Guarantees?
Medallion Signature Guarantees can be acquired from banks, credit unions, and brokerage firms; however, many will only provide this service if you are already a customer – for example a reader on Quora reported Wells Fargo and HSBC branches were unwilling to offer one since they did not know him or his account number – while Bank of America offered it without restrictions and would provide it.
Acquisition of a Medallion stamp can be an arduous and time-consuming process, but with careful planning and preparation it can become less daunting. By filing all paperwork accurately in accordance with relevant protocols, navigating the sometimes complex bureaucracy associated with getting this stamp may become far less daunting – with help from an experienced medical writer this process may even become manageable and streamline so you can focus on running your business instead!