A Medallion signature guarantee is needed when you are selling or transferring securities (such as stocks, bonds, mutual funds) and you have a physical certificate to sign.
A notary does not provide a Medallion Signature Guarantee. A notary is a public official and witness. A signature guarantee is not an authorized notary act.
Banks, credit unions and brokerage firms that choose to join the program can provide the Medallion Signature Guarantee. They must pay an annual membership fee and use a special Medallion stamp with special ink for added security.
If you do not have an existing account, you may need to open a new account and wait for 60 days or more to establish an ongoing customer relationship before you can get a signature guarantee.
The purpose of the signature guarantee is to prevent forgery and fraud. When you sell or transfer a security, the transfer agent keeps a record or ledger of the transfer of ownership. To help to ensure that the transfer is authentic, the transfer agent will require a signature guarantee.
When you open an account at a bank or brokerage firm, you sign an application form and maybe a signature card. A copy of your signature is kept on file. If you need a signature guarantee, the best place to go is to a bank or brokerage firm where you have an account. They can compare your signature on the certificate you are transferring against the signature they have on file. Then they can add the Medallion signature guarantee stamp. They can be held liable if the signature is a forgery.
Medallion Signature Guarantee Programs
There are several Medallion guarantee programs. They are administered by Kemark Financial Services, Inc. at kemark.com. The Securities Transfer Agents Medallion Program (STAMP) includes more than 7,000 U.S. and Canadian financial institutions.
If a financial institution is not a member of a recognized Medallion Signature Guarantee program, it would not be able to provide a signature guarantee. If you are not a customer of a participating financial institution, it is likely the financial institution will not guarantee your signature.
You can avoid having to get a signature guarantee by having your securities held in street name, meaning that your securities are held in the name of your brokerage firm, on your behalf, instead of in your name.
Medallion Surety Bond Limits
A medallion signature guarantee must cover the full amount of the security that is being transferred. There are different surety bond coverage levels available. Make sure that the guarantee coverage amount is equal to or greater than the transaction amount.
If the value of the security is near a coverage limit and rising, you may need to use a higher surety limit to maintain full coverage while the transfer is being completed.
An alpha prefix (letter) in the medallion signature guarantee stamp indicates the maximum coverage amount of the surety bond carried by the guarantor as follows:
Alpha Prefix A: $1,000,000
Alpha Prefix B: $750,000
Alpha Prefix C: $500,000
Alpha Prefix D: $250,000
Alpha Prefix E: $100,000
Alpha Prefix F: $100,000 (credit unions, per transaction)
Alpha Prefix X: $2,000,000
Alpha Prefix Y: $5,000,000
Alpha Prefix Z: $10,000,000
Notice the example stamp impression at the top of the page shows Alpha Prefix X.
Find a Local Medallion Program Member
To find a participating member of the Medallion program in your city, you can do a lookup by city or zip code for a nearby financial institution at Medallion Signature Guarantee search.
You can also view a list of Medallion Members in Colorado Springs.
[Last-Modified Date 2020-04-24] added surety bond limits