Medalion Signature Guarantee | 5-minute read
Estate Accounting| Estate Asset Transfer | Estate Fiduciary
A Medallion Signature Guarantee is a specialized certification used to authenticate the signature of a person transferring securities, such as stocks or bonds. Unlike a notarization, it goes further by confirming that the signature is genuine, the person signing is authorized to make the transfer, and the financial institution providing the guarantee accepts liability if the signature proves to be fraudulent.
A Medallion Signature Guarantee is typically required when:
- Transferring physical stock or bond certificates.
- Changing the ownership of securities (e.g., due to death, inheritance, or a name change).
- Redeeming certain types of investment accounts.
- Rolling over retirement accounts with securities.
Main Link: Medallion Signature Guarantee: What It Is and Where to Get One
“A medallion signature guarantee is one of several special certification stamps that guarantees a signature that authorizes a transfer of securities is authentic. Parties will generally require a medallion signature guarantee when an owner wants to sell or transfer securities—such as stocks or bonds—held in physical certificate form. If an owner holds securities through a broker, they will not need to obtain a signature guarantee to sell or transfer the securities.”
Investopedia
Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities
If you hold securities in physical certificate form and want to transfer or sell them, you will need to sign the certificates and securities powers–a legal document, separate from a securities certificate that investors use to transfer or assign ownership to another person or entity. You will need to get your signature guaranteed on all documents before a transfer agent will accept the transaction instructions. The Medallion Signature Guarantee Program protects you by making it harder for people to steal your securities by forging your signature on your securities certificates and related documents. Transfer agents insist on medallion signature guarantees because they limit their liability and losses if a signature turns out to be forged.
Investor.gov – Securities and Exchange Commission
Only financial institutions that are members of a Medallion program can provide this guarantee. These include:
- Banks
- Credit unions
- Broker-dealers
- Trust companies
Requirements vary by institution, but typically include:
- Proof of identity (e.g., government-issued ID)
- Documentation proving your authority (e.g., court-issued Letters Testamentary if you’re an executor)
- The actual securities or forms being transferred
- Possibly an account with the institution
Summary
References
- Chen, James (December 24, 2022). “Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities”. Investopedia. Retrieved 1 June 2023.
- “Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities”. Investor.gov – U.S. Securities and Exchange Commission; Office of Investor Education and Advocacy (Washington, DC). Retrieved 1 June 2023.