# Understanding Medallion Signature Guarantees: Essential for Securities Transfer

![Medallion Signature Guarantee](https://www.investopedia.com/thmb/CIivpq0pN3gIaTzT-5lIldEmHJ8=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/medallionsignatureguarantee.asp-final-176cd7245eba44b4b47b85baff9668a4.png)

*— Investopedia / Ryan Oakley*

## What Is a Medallion Signature Guarantee?

A medallion signature guarantee provides a critical layer of security when transferring ownership of securities. Typically required when selling or transferring stocks or bonds in physical form, this certification stamp verifies the authenticity of the signature authorizing the transaction. For those managing their securities through a broker, this guarantee is unnecessary.

### Key Takeaways

*   A Medallion signature guarantee is needed for the authentic transfer of physical securities and is provided by financial institutions that belong to specific Medallion guarantee programs. 
*   These guarantees are primarily necessary for actions like selling or transferring stocks and bonds if held in physical form, not if they're managed through a broker.
*   Financial institutions usually require you to be an established customer to provide a Medallion signature guarantee, sometimes at no cost, but fees may apply if the value of the assets is high.
*   Obtaining a Medallion signature guarantee can be challenging due to the associated risks for banks, and it is mainly provided to well-known customers. 
*   Major U.S. banks like Bank of America, Chase, and Capital One offer this guarantee, although not every branch can provide it, possibly requiring documents to be sent for review.

## Understanding the Medallion Signature Guarantee Process

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 (STAMP), the Stock Exchanges Medallion Program (SEMP), and the New York Stock Exchange Medallion Signature Program (MSP). 

Normally, you can obtain a Medallion signature guarantee at a financial institution where you are a customer. The bank may assess a small charge for this service; fees can range from $0 for customers with solid, established relationships to up to $100 for $200,000 in assets.

For financial institutions with on-site stamps, the stamp guarantee can be provided on the same day, provided there are no outstanding requirements or errors. Otherwise, it could take between two and five business days for a review.

Because the guaranteeing institution's assets back the certification, a guarantee stamp is not easy to obtain. Banks, credit unions, and other financial institutions that offer Medallion Signature Guarantee are:

*   Chase
*   Citi
*   Capital One
*   Merrill Lynch (Bank of America)
*   Navy Federal Credit Union
*   Northeast Credit Union

### Top Situations Requiring a Medallion Signature Guarantee

Medallion signature guarantees can be used for many purposes, but the most common reasons are when:

1.  Securities are gifted
2.  [Securities are moved from one account to another](https://www.investopedia.com/terms/s/stock-power.asp)
3.  The owner of the security passes away  
    

## The Role of Medallion Signature Guarantees in Share Certificate Transactions

A medallion signature guarantee is often related to a [share certificate](https://www.investopedia.com/terms/s/share-certificate.asp), which is a document proving you own a certain number of a company's shares.

Owning a bond differs because it is a debt instrument where you loan money to a company or the government. A share certificate typically contains key information such as:

*   Certificate number
*   Company name and registration number
*   [Shareholder](https://www.investopedia.com/terms/s/shareholder.asp) name and address
*   Number of shares owned
*   [Class of shares](https://www.investopedia.com/terms/c/class.asp)
*   Issue date of shares
*   Amount paid (or treated as paid) on the shares

Companies can issue shares in different classes. For instance, Berkshire Hathaway has Class A ([BRK.A](https://www.investopedia.com/markets/quote?tvwidgetsymbol=BRK.A)) and Class B ([BRK.B](https://www.investopedia.com/markets/quote?tvwidgetsymbol=BRK.B)) shares. Meanwhile, companies like Ford ([F](https://www.investopedia.com/markets/quote?tvwidgetsymbol=F)), Meta ([META](https://www.investopedia.com/markets/quote?tvwidgetsymbol=META)), and Alphabet ([GOOG](https://www.investopedia.com/markets/quote?tvwidgetsymbol=GOOG), [GOOGL](https://www.investopedia.com/markets/quote?tvwidgetsymbol=GOOGL)) also provide multiple share classes.

Each share class provides various rights related to [dividends](https://www.investopedia.com/terms/d/dividend.asp) and voting. Sometimes, the owner of a stock certificate can give a proxy to another person to vote on matters of company policy.

 If a share certificate is damaged, lost, or stolen, the company can issue a replacement, provided the damaged document is returned. Share certificates can be registered or bearer form. A bearer share certificate entitles the holder to exercise all legal rights associated with the stock.

Today, individual investors usually opt for electronic records instead of holding physical share certificates.

## Which Banks Offer Medallion Signature Guarantee?

Many U.S. banks offer Medallion signature guarantee, but not every branch of a participating bank can provide the service. Most large financial institutions, such as Bank of America, Chase, and Capital One, provide the Medallion signature guarantee. If one of their branches does not have an on-site reviewer, the documents must be sent for review.

## How Long Is a Medallion Stamp Good for?

The Medallion stamp is valid for the date it is signed.

## How Much Does It Cost to Get a Medallion Signature?

Medallion signature guarantees are obtained from institutions that have the authority to issue them. For some institutions, particularly large banks, If the customer has an established relationship, they may not be subject to fees or charges. However, if fees apply, they can range from as little as $50 to $100 or more, depending on the value of the assets.

## Why Is a Medallion Signature Guarantee So Hard to Get?

Medallion signature guarantees expose financial institutions to risks and liabilities; therefore, they do not issue them readily or to just anyone. Typically, they are provided for well-established customers for a nominal fee.

## The Bottom Line

The Medallion signature guarantee validates the identity and signature of a party transferring securities or investments. Banks, credit unions, and other financial institutions must belong to one of three select Medallion signature guarantee programs to provide this service. Because of increased financial risks, financial institutions tend to react conservatively when issuing them. Most often, Medallion signature guarantee stamps are needed for the gifting of securities, to transfer assets upon the death of the original owner, and when the security or investment holder moves the assets from an account.  

> **Article Sources**
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