Medallion Signature Guarantee: What It Is and How It Works

What is a Medallion signature guarantee?

A Medallion signature guarantee is a certification used when transferring ownership of securities (for example, physical stock or bond certificates). The guarantee verifies that a signature authorizing the transaction is genuine and that the signer is entitled to transfer the securities. Because the guaranteeing institution assumes financial liability for the transfer, only authorized financial institutions can issue Medallion guarantees.

How it works

• Only institutions that participate in one of three programs can issue Medallion guarantees:
• Securities Transfer Agents Medallion Program (STAMP)
• Stock Exchanges Medallion Program (SEMP)
• New York Stock Exchange Medallion Signature Program (MSP)
• You generally obtain the guarantee at a financial institution where you have an established relationship.
• If the branch has an on-site reviewer and stamp, the guarantee can often be provided same day if documentation is complete. Otherwise, documents may be sent to a central office for review (typically 2–5 business days).
• The stamp is valid for the date it is signed; there is no extended “valid period” beyond that signature date.

Who can provide a Medallion guarantee

Many banks, credit unions, and brokerage firms participate, but not every branch can issue a stamp. Common providers include large U.S. banks and credit unions such as Chase, Citi, Bank of America (Merrill Lynch), Capital One, Navy Federal, and regional credit unions. If a local branch lacks an on-site reviewer, it may forward documents to a processing center.

When you need a Medallion signature guarantee

Medallion guarantees are typically required for transfers involving physical securities, including when:
– Securities are gifted
– Securities are moved from one account to another (including transfers to new owners)
– The owner of the securities dies and assets are being transferred to beneficiaries
– A broker or transfer agent requests one for any exchange of physical certificates

Medallion guarantees are usually not required for securities held electronically through a broker or transfer agent.

Medallion guarantees and share certificates

• A share certificate (stock certificate) is a physical document representing ownership of a number of company shares.
• Typical certificate details: certificate number, company name, shareholder name and address, number and class of shares, issue date, and amount paid.
• Share classes (e.g., Class A vs. Class B) can carry different voting rights and dividend entitlements.
• Certificates may be registered (registered to a specific owner) or bearer form (possession equals ownership).
• If a certificate is lost, stolen, or damaged, the issuing company can usually reissue a replacement once required procedures (and sometimes indemnity) are satisfied.
• Today, most retail investors hold securities electronically rather than in physical certificate form.

Cost and timing

• Many institutions waive fees for long-standing customers. When charged, fees commonly range from about $50 to $100 or more, depending on the institution and the value of the assets being guaranteed.
• If the branch can process the request on-site and documentation is complete, you may receive the guarantee the same day; otherwise expect a few business days for review.

Why Medallion guarantees are difficult to obtain

Issuing a Medallion guarantee exposes the provider to financial risk if a transfer proves fraudulent. For that reason, institutions restrict the service to customers they know and trust and apply conservative verification standards. They may refuse guarantees for unfamiliar or high-risk requests.

Key takeaways

• A Medallion signature guarantee authenticates signatures on transfers of physical securities and is issued only by authorized financial institutions.
• It is primarily required for transfers of physical stock or bond certificates (gifts, account transfers, estate transfers).
• Institutions must belong to a recognized Medallion program (STAMP, SEMP, or MSP) to issue the stamp.
• Fees are often waived for established customers; when charged, they typically range from about $50–$100+, and processing can be same day or take a few days depending on the branch and completeness of documents.
• Because the certifying institution takes on liability, guarantees are issued cautiously and usually only for known customers.

Bottom line

A Medallion signature guarantee is a security measure used to prevent unauthorized transfers of physical securities. If you need to transfer, gift, replace, or otherwise change ownership of physical stock or bond certificates, contact your bank, credit union, or broker to confirm whether they provide Medallion guarantees and what documentation, fees, and processing times apply.