What is a Medallion Signature Guarantee?

When I wrote about how I made $652 for free off of Travelzoo stock I mentioned briefly that I had to get a medallion signature guarantee stamp on my stock shares.

The SEC has a page discussing the medallion guarantee.   They explain that the stamps are used to protect the transfer of stock shares.  The Medallion Signature Guarantee is a special stamp given to witness and guarantee the authenticity of a signature on the transfer of stock shares.

The company Kemark administers the signature program.   The stamps are required as part of SEC rules:
"SEC Rule 17ad-15 requires that Transfer Agents adopt an equitable methodology for acceptance of signature guarantees from eligible Guarantor institutions. To comply with the SEC Rule, Transfer Agents approved three Medallion Signature Guarantee Programs, STAMP, SEMP, and MSP (Medallion Signature Program)."

The stamp looks like the image below.

Source : Wikipedia

Over 7000 banks and credit unions participate in the medallion signature guarantee program.   That would include most of the banks in the country.      The SEC site says that if you are not a customer of a participating financial institution then it is likely that they will not guarantee your signature.    Therefore they say "the best source of a Medallion Guarantee would be a bank, savings and loan association, brokerage firm, or credit union with which you do business."

The Wikipedia article on the topic adds to that : "Different institutions have different 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.) Most institutions will not guarantee a signature of someone who has not already been their customer."

The SEC also says that you can get guarantee signatures from "Stock Exchanges Medallion Program (SEMP) whose participants include the regional stock exchange member firms, and clearing and trust companies."  or from  "New York Stock Exchange Medallion Signature Program (MSP) whose participants include NYSE member firms. "   So you may be able to get a guarantee via one of these firms.  


If your bank doesn't offer the service and other stock exchange firms are not available to you then you might try asking around other banks and credit unions.   They may do the signature if you sign up for a free account or they might do it for non customers. 

When I got my TZOO stock shares guaranteed we went to our bank branch in our grocery store.    We are customers of the bank we went to.   We had to wait for the manager to actually do the stamp.    The bank didn't happen to charge us a fee for the service.

Bottom Line:   Medallion signature guarantees are special stamps to certify a signature on a transfer of stock.   Best place to try and get one is your local bank branch.