In the United States, a medallion signature guarantee is a special signature guarantee for the transfer of securities. It is a guarantee by the transferring financial institution that the signature is genuine and the financial institution accepts liability for any forgery. Signature guarantees protect shareholders by preventing unauthorized transfers and possible investor losses. They also limit the liability of the transfer agent who accepts the certificates. Not all MSG stamps are of equal value. A special coded prefix is given to each stamp, and this prefix determines how much monetary value can be guaranteed. For instance if the MSG is required for $400,000 worth of value, at least a C prefix is required, which is good for up to $500,000 value. If a D prefix stamp is submitted, the transaction will be rejected, because a D stamp is only good for guarantee up to $250,000. Often ComputerShare paperwork only informs of a need for a MSG, but does not specify anything about the necessity of certain prefixes.
A medallion signature guarantee is a binding warranty, issued by an agent of the authorized guarantor institution, that: (a) the signature was genuine; (b) the signer was an appropriate person to endorse, and (c) the signer had legal capacity to sign. A medallion signature guarantee is not equivalent to an American Notarial act. One American Notarial act, called an acknowledgment, is a formal declaration made before an authorized public officer (i.e. Notary Public, Judge or Justice). It is made by a person executing an instrument who states it was his "free act and deed". The three essential components of an acknowledgment are: (a) the personal appearance before an authorized public officer; (b) positive identification; (c) the actual acknowledgment of signing. Unlike medallion signature guarantees, the person executing many legal documents does not have to sign his name in the physical presence of the issuing officer (i.e. Notary Public, Judge or Justice).
Different institutions have various policies as to what type of identification they require to provide the guarantee and whether they charge a fee for such service (usually nominal if any). Nearly every guarantor institution will not guarantee the signature of a person who is not a known, established customer.
Some banks may no longer provide this service; however, many still do as well as other financial institutions such as a savings and loan association (a thrift) and credit unions. At their sole discretion these institutions may provide the medallion signature guarantee stamp. These institutions would be able to provide clarification on their requirements for providing the stamp. Each of these institutions is different and may have different requirements for documentation necessary from one to the next.
When US citizens are abroad and unable to obtain a medallion signature guarantee stamp, with prior notice of the substitution some financial institutions may accept a United States embassy seal in its place. Financial institutions outside the United States which have a correspondence relationship with a US bank may be able to offer a medallion signature guarantee to existing customers.
Video Medallion signature guarantee
References
- Piombino, Alfred E. Notary Public Handbook: Principles, Practices & Cases, National Edition, East Coast Publishing: 2011. ISBN 978-0-9445606-9-3
- "U.S. Department of State telegram to all U.S. diplomatic and consular posts abroad concerning medallion stamp guarantees". Digest of International Law. U.S. State Department. May 21, 2001. Retrieved 2009-11-17.
- "Signature Guarantees: Preventing the Unauthorized Transfer of Securities". U.S. Securities and Exchange Commission. Retrieved 2013-11-15.
This article incorporates public domain material from websites or documents of the United States Department of State.
Source of the article : Wikipedia
0 Comments