Notary Public Underwriters Blog
Medallion Signature Guarantees Explained
- Details
- Published: April 22, 2024
Contrary to popular belief, issuance of a medallion signature guarantee is not a standard duty of America’s notaries public. Instead, this service is performed only by certain banking and financial institutions. Understanding what a medallion signature guarantee is and how to obtain one can help both notaries and persons in need of this service.
What Is a Medallion Signature Guarantee?
A medallion signature guarantee is a special certification provided by authorized financial institutions, typically a bank, credit union, or broker dealer, that participate in one of the medallion signature guarantee programs (Securities Transfer Agents Medallion Program, Stock Exchange Medallion Program, or New York Stock Exchange Medallion Signature Program).
Why Is A Medallion Signature Guarantee Needed?
A medallion signature guarantee is required for the sale, assignment, transfer, or redemption of securities such as stocks, bonds, and mutual funds. A medallion signature guarantee signifies that a particular individual has legal authority and capacity to sign for these purposes, that the individual’s signature is genuine, and that the financial institution accepts liability for any potential forgery.
Why Is There Confusion, and What Should a Notary Do When Asked for a Medallion Signature Guarantee?
The mistaken assumption that a medallion signature guarantee is a standard notarial power occurs because notaries are numerous within banking and financial institutions and, the formalities of both functions seem similar (involving identifying a signer and ceremonial steps performed with a stamp and an official signature).
When asked to perform a “medallion stamp,” “medallion signature,” “medallion notarization” or similar, a notary public must decline and explain that this function can only be performed by certain individuals at authorized financial institutions. The requester may contact any local bank and ask if the bank can issue a medallion signature guarantee and, if so, what the procedure is to obtain one.
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