Medalion Signature Guarantee | 5-minute read
Estate Accounting| Estate Asset Transfer | Estate Fiduciary

A Medallion Signature Guarantee is a special certification used to authenticate signatures on securities transactions — for example, transfers of stocks, bonds, or mutual fund shares. It is stronger than a standard notarization because the guaranteeing financial institution verifies the signer’s identity and legal authority to make the transfer and assumes contractual liability if the signature later proves fraudulent.

Medallion guarantees are issued by participating banks, credit unions, and broker-dealers that belong to official signature-guarantee programs; different medallion stamps reflect varying levels of the guarantor’s financial liability, and some transfers require a specific stamp level. To obtain one you typically present a photo ID, relevant account or ownership paperwork, and any required physical certificates; the institution will verify identity, witness the signature, and affix the medallion stamp. Not all institutions offer this service and some charge a fee or require an account, so call ahead.

A Medallion Signature Guarantee is typically required when:

• Transferring physical stock or bond certificates
• Changing ownership of securities (for example, after a death, inheritance, or name change)
• Redeeming certain investment accounts
• Rolling over retirement accounts that include securities

In short: a Medallion Signature Guarantee protects the parties and the market by combining identity verification, proof of authority, and the guarantor’s financial responsibility.

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

Summary

References

1. Chen, James (December 24, 2022). “Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities”. Investopedia.  Retrieved 1 June 2023.
2. “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.