A Medallion Signature Guarantee is a special certification used in financial transactions to verify the authenticity of a signature and confirm that the person signing has the legal authority to do so. It is commonly required in the United States but may also affect international investors or account holders with financial ties to American institutions.

What Is a Medallion Signature Guarantee?

The Medallion Signature Guarantee is a stamp provided by authorised financial institutions such as banks, credit unions, or brokerage firms. It serves as a form of security against forgery in cases where ownership of securities—such as stocks, bonds, or mutual funds—is being transferred. Unlike a notary stamp, which merely verifies the identity of the signer, the Medallion Guarantee confirms both identity and legal capacity related to financial assets.

This system is governed by a set of rules enforced by financial industry groups in North America, ensuring that transfers of valuable securities are conducted safely and without fraud.

Procedure for Obtaining a Medallion Signature Guarantee

Getting a Medallion Signature Guarantee is not a simple walk-in process. It usually involves the following steps:

Contact the Institution

Not all financial institutions offer this service, and even those that do may restrict it to their clients. The first step is to confirm availability and eligibility requirements.

Prepare Your Documents

You will need to provide valid, government-issued photo identification and the documents involved in the transaction. These could include stock certificates, transfer forms, or letters of authorisation.

Demonstrate Legal Authority

If you are acting as a representative (such as an executor of an estate or a power of attorney), you must present documents that establish your authority to act on behalf of another individual or entity.

In-Person Verification

The institution will typically require an in-person appointment to witness your signature and verify your documents. Some institutions may charge a small fee.

Issuance of the Guarantee

Once approved, the institution will place the Medallion stamp near your signature on the relevant document. This stamp includes a unique barcode and ink colour that indicates the transaction value it covers.

When Is a Medallion Signature Guarantee Required?

This guarantee is required when transferring physical securities, changing the ownership of investment accounts, or making certain transactions involving financial instruments. Common scenarios include:

• Transferring stock certificates to another person or into a trust
• Selling or gifting physical securities
• Claiming shares of a deceased relative
• Changing the name on an investment account due to marriage or divorce
• Merging accounts under different names

Without a Medallion Signature Guarantee, these transactions cannot be processed, as financial institutions will not accept the risk of fraud or unauthorised activity.

Summary: The Medallion Signature Guarantee plays a critical role in the financial system by reducing the risk of identity theft and unauthorised asset transfers. It protects both the asset holder and the receiving party by ensuring that all signatures are legitimate and backed by a trusted third party.