Medallion Signature Guarantee
Finding an MSG stamp can be challenging, yet essential for the transfer of securities in the United States. You can obtain one through banks, credit unions, brokers and other financial firms.
Before going, it is advisable to contact the institution first as some may require you to open a new account and wait several months before providing services.
Banks and other financial institutions are reluctant to provide them
Medallion Signature Guarantees (MSGs) are special stamp and signature combinations that verify whether a signature authorizing securities transfer is authentic. MSGs are usually required when stocks or bonds are transferred between parties, although mutual funds and annuities can also be transferred using MSGs. Most financial institutions provide this service either free of charge or for a small fee to existing customers; valid forms of identification may be requested as proof.
As medallion signature guarantees can expose banks and financial institutions to large financial liabilities, they often limit their exposure by only offering it to customers they already know.
Notary public stamps only verify who was present when signing, while medallion signature guarantees are more comprehensive in that they identify who has authority to sign. Given today’s prevalence of identity theft, this feature can be extremely important as it makes it much harder for criminals to gain access to your assets by falsifying signatures on certificates and documentation that contain your assets.
They are expensive
Medallion signature guarantees expose financial institutions to significant risks and liabilities, so they should only be issued sparingly or to established customers with strong relationships with their bank. Unfortunately, however, their costs can be substantial.
A stamp provides assurances that the person signing is who they claim to be and owns legally the assets being transferred. Furthermore, this guarantees that institutions will accept liability in case of theft or forgery.
Process can be costly; to utilize this service you should visit a large national bank or credit union such as Citibank, Wells Fargo or HSBC. Call ahead and inquire as to their service availability; make sure they know the amount being transferred along with any forms they need verified before visiting them.
They are a liability
Due to an increase in identity theft and fraud, security measures used for medallion stamps have been tightened up significantly. They now feature barcodes with invisible security compounds that can only be read by Stamp 2000 Plus scanners used by transfer agents; additionally they feature prefixes which limit how much a bank guarantees for each transaction.
Financial institutions that provide medallion signature guarantees typically charge a fee for this service. A guarantee essentially acts as an assurance that the signature endorsed is genuine, and that its bearer is who they claim they are. Furthermore, this liability assumes by the financial institution in case of fraudulent transfer of funds occurs.
Medallion signatures may be necessary when securities such as stocks and bonds are transferred between individuals – this might occur as they change jobs, consolidate retirement accounts, or donate shares to charity.
They are a hassle
Medallion Signature Guarantee (MSG) stamps provide verification of signature on documents that is guaranteed by financial institutions, typically used when transferring securities and mutual funds. Banks or other financial institutions that provide medallion signature guarantees must meet certain standards set out by the Securities and Exchange Commission as well as have substantial assets backing their guarantee; unlike notary stamps which must be provided by officers of banks/other financial institutions.
medallion signature guarantees expose financial institutions to significant risks and liabilities; consequently they do not readily provide them to all customers; instead they only issue them to well-established customers with long histories with them. Even if you do not belong to such an established clientele yet, medallion signature guarantees may still be obtained at certain banks, savings and loan associations, credit unions, and brokerage firms where an account already exists.
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