Medallion Signature Guarantee

A unique stamp by a signature guarantor that guarantees the authenticity of a signature to conduct a transfer of securities

What is a Medallion Signature Guarantee?

A medallion signature guarantee is a certification stamp that lenders – such as banks and other financial institutions – provide to allow investors to transfer ownership of securities. It will generally be required by parties when the owner intends to transfer securities.


Medallion Signature Guarantee


The medallion signature guarantee protects shareholder accounts by limiting illegal transfers and potential losses by investors. However, the stamp is not required when a stock owner wants to sell or transfer stocks through a broker.



  • A medallion signature guarantee is a unique stamp by a signature guarantor that guarantees the authenticity of a signature to conduct a transfer of securities.
  • The guarantee protects investors by curbing forgery of signatures on the securities certificate.
  • An institution must be a member of the Medallion programs to offer medallion signatures guarantee.


Understanding Medallion Signature Guarantees

A medallion signature provides a guarantee that a signature’s owner is the legal owner of securities and hence, possesses the power to initiate a transfer of ownership. In the case of forgery, the financial institution will accept liability. It can be issued by a trust company, clearing agency, domestic bank, broker-dealer, or any other financial institution.

The guarantee is only valid provided that the sale or transfer of securities does not exceed the relevant surety coverage of the program. Signature guarantees from financial institutions that do not participate in either Stamp or NYSE Medallion program are not accepted.

It is worth noting that a notary public is not bound to produce a medallion signature guarantee when transferring stocks. In such a case, the officer must first verify the identity and acknowledge the signature owner before giving the nod to proceed with the sale or transfer.


Prefixes and Financial Institutions’ Policies

Medallion signature guarantees do not bear similar values. Each stamp is assigned a special coded prefix to determine the relevant surety coverage level. For example, a prefix C is needed in the medallion signature guarantee for a transaction that is worth $400,000. The prefix is suitable for up to $500,000.

A prefix D stamp will automatically be rejected in such a transaction since it is only suitable for up to $250,000. In the same vein, policies that specify the type of identification required to issue the medallion signature guarantee and where to charge a fee for the service vary by institution. Most guarantor institutions will issue a stamp for an established customer, but not for unknown persons.


How Medallion Signature Guarantee Works

An institution providing a medallion signature guarantee must be a participant in one of the three Medallion programs – i.e., the New York Stock Exchange Medallion Signature Program, Securities Transfer Agents Medallion Program, and the Stock Exchange Medallion Program.

The Securities and Exchange Commission (SEC) regulations determine eligible providers of a medallion signature guarantee. The stamp can guarantee proper endorsements in transactions involving mutual stocks, funds, bonds and savings bonds, warrants and other securities, and unit investment trusts.

The institutions offering the stamp may charge a small fee to its customers. A medallion signature guarantee stamp cannot be given to individuals outside the U.S. Some institutions may accept the U.S. embassy seal if notified of the substitutions in advance. Several endorsing institutions outside the U.S. with a correspondence relationship with a U.S. bank issue their existing customers with a medallion signature guarantee stamp.


Medallion Signature Guarantee - Programs


Special Details

Financial institutions offer holders with a security certificate a medallion signature guarantee. Institutions offer the written document to their customers to prove the ownership of different classes of a company’s shares.

The share certificate has key information that generally includes shares issue date, the name and address of the shareholder, certificate number, full amount paid on shares, classes of shares, the name and registration number of a company, and the number of shares. Institutions may issue shares in different classes.

One company that offers different classes of shares is Berkshire Hathaway. The holding company offers Class A (BRK.A) and Class B (BRK.B) shares. Other renowned companies, such as Facebook (F) or Ford Group (F), issue shares in dual-class structures. A company with dual-class stock means that it possesses more than one class of stocks, with every class having distinct features.

Multiple share classes are also offered in some companies, such as Google. The different share classes for Google’s parent company Alphabet (GOOG) are as follows:

  • Class A shares offer voting rights
  • Class C shares don’t offer voting rights
  • Class B shares give the stock owner ten voting rights


Another person can act as a proxy to the shareholder and vote on matters of company policy. The company may replace a lost, stolen, or damaged certificate. In the case of damage, the owner of the document must return it to the company.

The stock certificate can either be in a bear form or be registered. The bear form gives the owner all the legal rights that apply to the stock. Presently, electronic records are preferred over physical possession of share certificates.


Additional Resources

Thank you for reading CFI’s guide on Medallion Signature Guarantee. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional resources below:

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