By Jon Stevenson
The Medallion Signature Guarantee is used to verify the identity of an owner when selling or transferring traded assets such as stocks or bonds.This reduces the risk of the company processing the transfer by sharing the liability with the institution that provided the guarantee stamp. It serves as protection for the owner by limiting the likelihood of an unauthorized transfer and the transfer company by reducing losses if a signature is forged.
The Medallion Signature Guarantee is not the same as a notary stamp and they cannot be used interchangeably. The Medallion Signature is provided by financial institutions such as banks and credit unions because they are able to take financial responsibility. Notary Publics are government officials that certify signatures for legal documents but do not take on financial responsibility.
It is also important to note that different companies are able to provide different amounts of coverage for the transfer. If you are planning on transferring or selling an asset that requires the Medallion Signature Guarantee you will want to make sure they can cover the full amount of the asset or your request may be rejected. For more information about surety limits: https://alliancebernstein.custhelp.com/app/answers/detail/a_id/1343/~/what-are-the-surety-limits-associated-with-medallion-signature-guarantee%3F.