Medallion Signature Guarantee
A medallion signature guarantee is one of several special certification stamps that guarantees a signature that authorizes a transfer of securities is authentic. In order to provide a Medallion signature guarantee, an institution must be a member of one of three Medallion signature guarantee programs: the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program, and the New York Stock Exchange Medallion Signature Program. To provide a Medallion signature guarantee, an institution must be a member of one of three Medallion signature guarantee programs. Key information on a share certificate generally includes the following: Certificate number Company name and registration number Shareholder name and address Number of shares owned Class of shares Issue date of shares Amount paid (or treated as paid) on the shares 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.
What Is a Medallion Signature Guarantee?
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.
How Medallion Signature Guarantees Work
In order to provide a Medallion signature guarantee, an institution must be a member of one of three Medallion signature guarantee programs: the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program, and the New York Stock Exchange Medallion Signature Program.
Normally, you can obtain a Medallion signature guarantee at a financial institution where you are already a customer. The bank may assess a small charge for this service.
Special Considerations
A medallion signature guarantee often corresponds with a share certificate. A share certificate (or stock certificate) is a written document that serves as legal proof of ownership of a set number of a company’s shares.
This is in contrast with owning a bond, a form of debt instrument, in which a separate party loans money to a company or the government. Key information on a share certificate generally includes the following:
Shares may be issued in separate classes. For example, Berkshire Hathaway offers stockholders Class A (BRK.A) and Class B (BRK.B) shares. A number of other well-known companies have dual-class structures, such as Ford (F), Facebook (FB), and Groupon (GRPN). Meanwhile, some companies have multiple share classes — where Google parent company Alphabet (GOOG) has three classes of shares.
Each class offers different rights to the stockholder with regard to dividends and voting options. At times the owner of a stock certificate can give a proxy to another person to allow them to vote with said shares on matters of company policy.
If a share certificate is damaged, lost, or stolen, the company may issue a replacement certificate. In such a case, the shareholder must return the damaged document. Share certificates may either be registered or in bearer form. A bearer share certificate entitles the holder to exercise all legal rights associated with the stock.
Today individual investors rarely have physical possession of their share certificates, preferring electronic records instead.
Related terms:
Bear Market : Phases & Examples
A bear market occurs when prices in the market fall by 20% or more. read more
Bond : Understanding What a Bond Is
A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. read more
Broker and Example
A broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. read more
Check
A check is a written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee. read more
Class of Shares
Class of shares is an individual category of stock that may have different voting rights and dividends than other classes that a company may issue. read more
Deposit/Withdrawal At Custodian (DWAC)
Deposit/Withdrawal at Custodian (DWAC) is an automated system for deposits and withdrawals of securities at the Depository Trust Company (DTC). read more
Share Certificate
A share certificate is a written document verifying a stockholder owns shares of a company; this paper stock certificate has largely been phased out in the digital age. read more
Signature Guarantee
A signature guarantee is a form of authentication issued by a bank or other financial institution verifying the legitimacy of a signature and request. read more
Securities Transfer Agents Medallion Program
Securities Transfer Agents Medallion Program is a verification system for guaranteeing individual signatures applied to securities requiring transfers. read more
Stock Power
Stock power is a legal power of attorney form that transfers ownership of certain shares of stock to a new owner. read more