Medallion Signature Guarantee Stamp Frequently Asked Questions (FAQ)
We routinely get questions concerning the Medallion Signature Guarantee Stamp program. As a result, we have decided to provide some common questions and answers. Welcome to our Medallion Signature Guarantee Stamp Frequently Asked Questions (FAQ).
What is a Medallion Signature Guarantee ?
A medallion signature guarantee is a unique stamp by a signature guarantor that guarantees the authenticity of a signature to properly transfer securities.
Why was the Medallion Signature Guarantee Program created ?
The Medallion Signature Guarantee program was created as a result of the Securities and Exchange Commission (SEC) adopt Rule 17Ad-15 in January of 1992.This rule was adopted in order to improve the efficiency of transferring securities.
How does the Medallion Guarantee protect investors ?
The Medallion Guarantee protects investors by curbing the forgery of signatures on stock certificates, stock powers, or account transfer documents.
Who can provide a Medallion Signature Guarantee Stamp?
A signature guarantee stamp can only be provided by an institution that is a member of the Medallion program.
Why is it getting harder to get a Medallion Signature Guarantee?
Banks, brokerage firms, and other financial institutions have been the traditional providers of Medallion Signature Guarantee Stamps to the investing public. It has become increasingly harder for investors to get a medallion stamp from these institutions for a couple of very basic reasons. The 1st being that banks have been reducing the number of branches for years as more banking services have moved online. Additionally, larger banks tend to see a higher turnover in branch personnel, combine this with the fact that each individual authorized to issue a stamp must undergo special training and certification by the administrator of the medallion program. This has greatly reduced the number of people available to issue a medallion stamp.
Additionally, the banks that own brokerage firms have figured out that providing medallion signature guarantee stamps was a way of driving the growth of their brokerage firms. They do this by only providing medallion signature guarantee stamps for securities being deposited into their own broker/dealers.
What are the signature guarantee limits?
All Medallion Signature Guarantee Stamps contain a special alpha prefix which designates the dollar limit of the guarantee. A transfer of securities in excess of the dollar limit guarantee by a guarantor should not be processed by a transfer agent or financial institution. It is important that an investor know what the limits of a medallion signature guarantee stamp is when they are seeking a stamp.
The guarantee limit per alpha prefix are as follows:
F $100,000 (Credit Unions)
How does a transfer agent verify a Medallion Signature Guarantee Stamp ?
A transfer agent, or financial institution will log into a site created by the administrator of the medallion program and enter the information contained within the medallion stamp. The site will then provide a verification or rejection of the stamp.
What happens if the value of the securities exceeds the signature guarantee limit?
A medallion guarantee is only valid up to the limit the guarantor is authorized to provide a medallion signature for. To put it a little more clearly, if an institution is authorized to provide guarantees up to $1 million USD, and the value of the securities is $2 million USD, the medallion signature guarantee stamp is invalid.
We are constantly updating our Medallion Signature Guarantee Stamp Frequently Asked Questions (FAQ) page in an effort to provide investors and shareholders the most complete resource on this topic. Please feel free to check back on a regular basis.
If you need a Medallion Signature Guarantee Stamp
If you are in need of a Medallion Signature Guarantee Stamp, please feel free to visit our Medallion Signature Guarantee Stamp services page, or submit an online request. Additionally, please free to give us a call at 404-816-8240 with any questions you may have.