A medallion stamp is one of many special certification stamps used to validate your signature when transferring securities or investments. Banks, credit unions and brokerage firms participating in a select group of medallion programs may provide this stamp for use when necessary.
Financial institutions recognize the significant liability exposure created by stamps, so they typically limit them to customers with existing relationships. You’ll typically need to visit in person with identification.
Banks
Banks, credit unions, transfer agents and broker-dealers that participate in the Securities Exchange Commission medallion signature guarantee program may offer this service in the United States. Such financial institutions must also carry surety bond coverage in case any fraudulent transactions take place through them.
Medallion stamps provide proof that the signer is who they claim they are, as well as legal authority to transfer shares in a company. They feature signature, name and address as well as security features such as barcodes or chemical compounds within the ink to verify who signed.
Due to expenses and liability considerations, banks may be reluctant to provide medallion services without an existing customer relationship or proven transaction record with them. One reader experienced this when trying to get his local Bank of America branch to stamp his share certificates.
Brokerage Firms
Most brokerage firms provide medallion signature guarantees to account holders, while transfer agents also typically provide this service. It is always prudent to contact a company’s corporate office in order to ascertain if this service is offered.
Stamps are typically required when selling or transferring physical certificates of securities such as stocks and bonds, proving that those signing to authorize transfers are indeed their owners and possess the legal authorization for doing so, such as through power of attorney, trust agreement, letter testamentary or corporate resolution.
Stamps issued by financial institutions typically feature dates and a coded prefix that identify which institution issued it, with documents attached using special security ink that makes replicating difficult. Medallion stamp costs vary, but are typically affordable; each medallion stamp issued is insured against fraud and mishandling by assets held by its issuing financial institution and insured against mismanagement or misuse.
Transfer Agents
When purchasing or selling stocks and shares in either the US or Canada, medallion signature guarantees (also referred to as medallion stamps) may be necessary in order to comply with regulations regarding estate management involving US or Canadian assets. They serve as proof of identity and legal authority. Providing such guarantees is often mandatory when dealing with financial transfers of any sort and estate administration involving US or Canadian assets.
To qualify for a medallion signature guarantee, it’s necessary to have an existing relationship with the institution that’s providing it, present valid ID that verifies your identity, and proof that you own the securities being transferred – after which it will be verified that their value doesn’t exceed their maximum limit on medallion surety bonds.
Notary stamps provide less comprehensive guarantees than medallion signature guarantees, which are backed by bank assets and therefore cost more.
Other Financial Institutions
Medallion signature guarantees can generally only be acquired at a financial institution in person, such as banks, credit unions or brokerage firms that participate in an official medallion guarantee program. Most banks restrict this service only to existing customers due to potential liability concerns – for instance one reader reported that his local branches of Citibank, Wells Fargo and HSBC all only offered it to account holders at their location.
Other types of financial institutions that belong to specific medallion programs may also offer medallion signature guarantee services, including savings and loan associations (a thrift) and credit unions. Certain clearing and trust companies as well as some FINRA broker dealers such as Edward Jones and Morgan Stanley also offer this service; moreover, these brokers’ listings can be found on Medallion websites, along with banks, credit unions, and other financial institutions that offer this service.
