Reply by Stoli on 4/24/11 2:13pm
Msg #381142
Not a Notary Public
Medallion Signature Guarantee
A financial institution provides many services for its customers and members. Some, like IRA (Individual Retirement Plans), 401K plans, and cash management services can also be done by other financial corporations. There are some, though, that are unique to our industry. Medallion signature guarantee is one of them.
Purpose
The most common use for the Medallion signature guarantee is for transferring or selling securities. If you hold securities in physical certificate form and want to transfer or sell them, you will need to sign the certificates or securities powers. You'll probably need to get your signature "guaranteed" before a transfer agent will accept the transaction. This process protects the person who owns the stock or certificate by making it harder for someone to forge your signature. Transfer agents insist on signature guarantees because they limit their liability and losses if a signature turns out to be forged. That liability is on the financial institution that accepted the signature and put the Medallion stamp on the certificate.
There are now more than 7000 financial services companies that participate in the Medallion signature program. These signature guarantee programs are recognized by all major financial services associations throughout the United States and Canada, and are endorsed by the Securities Transfer Association (STA), which represents the major transfer agents in both those countries. An eligible financial services company can be a commercial bank, trust company, security broker or dealer, credit union or a savings association.
In order to be an eligible guarantor institution that is a participant in a signature guarantee program, the application must be approved by the Securities Exchange Commission (SEC), STA, and STC. This program includes: STAMP (Securities Transfer Agents Medallion Program}; SEMP (Stock Exchanges Medallion Program); or MSP (New York Stock Exchange Medallion Signature Program).
NOT a Notary Public
The Medallion Signature Guarantee should not ever be confused with a notary public. The big difference is in the liability. The organization that guarantees the authenticity of the signature is liable for the financial value of the transaction. As this could be certificates worth millions of dollars, the financial institution must be very careful to establish the identity of the person whose signature they are guaranteeing.
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