If you have been asked to obtain a Medallion Signature Guarantee for a US share transfer, you may assume that your bank can provide one. Unfortunately, that is often not the case.
A medallion signature guarantee is frequently required when transferring or selling US or Canadian securities. For shareholders, executors and beneficiaries in the UK, obtaining one can be one of the more challenging parts of the process.
Many people understandably approach their bank, solicitor or notary public for the necessary certification. However, a Medallion Signature Guarantee is a specialist financial guarantee that most UK banks and other financial institutions are not authorised to provide.
Understanding what a Medallion Signature Guarantee is, why it may be required and where to obtain one can help prevent unnecessary delays when dealing with North American securities.
What is a Medallion Signature Guarantee?
AA medallion signature guarantee (often abbreviated to MSG) is used to verify a signature authorising the transfer of securities. You can read our detailed explanation of how Medallion Signature Guarantees work.
The guarantee helps protect transfer agents and issuing companies against losses arising from fraudulent or unauthorised transfers.
Unlike an ordinary witnessed signature or a certified identification document, an MSG carries a financial guarantee from the issuing provider. Only organisations authorised to participate in a recognised Medallion programme can provide a valid guarantee.
Why can’t most UK banks provide one?
Most UK banks do not participate in a recognised Medallion Signature Guarantee programme and therefore cannot issue the required guarantee.
A bank may be able to witness a signature or certify a copy of a document, but neither service is equivalent to a Medallion Signature Guarantee. A bank stamp or signature from a branch employee will generally not be accepted when a transfer agent has specifically requested an MSG.
Unfortunately, this distinction sometimes becomes apparent only after documents have been submitted. The transfer agent may reject the documentation and request a correctly guaranteed signature, causing further correspondence and delays.
When might a medallion signature guarantee be required?
An MSG may be requested in connection with:
- transferring ownership of US or Canadian securities;
- selling certificated shares or certain book-entry holdings;
- transferring inherited securities following a death;
- registering securities in the names of beneficiaries;
- replacing a lost share certificate; or
- changing certain shareholder registration details.
The exact requirements depend on the transfer agent, the value of the securities and the nature of the transaction. An MSG is not required for every securities transaction, so the transfer agent’s instructions should be checked before certification is arranged.
Why aren’t notarisation and other certifications accepted?
A notary public, solicitor or bank employee may be able to verify someone’s identity, witness a signature or certify a document. However, these services do not provide the financial protection attached to a A medallion signature guarantee.
Where an MSG has specifically been requested, alternatives such as notarisation, solicitor certification or ordinary signature witnessing will generally not meet the transfer agent’s requirements.
Submitting the wrong type of certification may result in the documents being rejected and replacement forms being required.
Who can issue a Medallion Signature Guarantee?
A A medallion signature guarantee can only be issued by an authorised provider participating in a recognised medallion programme.
Access outside North America is limited, which is why UK shareholders, executors and professional advisers can find it difficult to locate an appropriate provider.
Before arranging an MSG, the provider will normally need to review the transaction and supporting documentation. The documentation required will depend on factors such as the type of transaction, the ownership of the securities, the capacity in which the applicant is acting and the value being transferred.
Obtaining a Medallion Signature Guarantee through Share Data
Share Data provides A medallion signature guarantee services to private shareholders, executors, beneficiaries, solicitors and financial professionals in the UK and internationally.
We can review the circumstances of the transaction, explain the supporting documentation required and provide an authorised guarantee where the relevant requirements are met.
Share Data can provide A medallion signature guarantees for qualifying transactions involving US and Canadian securities valued up to USD $2 million.
You can also download our A medallion signature guarantee guide for further information about the process.
Before submitting your documents
A A medallion signature guarantee is fundamentally different from the signature witnessing and document-certification services available through most UK banks, solicitors and notaries.
Checking the transfer agent’s requirements and arranging the correct guarantee before submitting the documents can help avoid rejection, additional paperwork and unnecessary delays.
Need a Medallion Signature Guarantee?
Share Data can review your requirements, explain the documentation needed and provide an authorised guarantee for qualifying transactions involving US and Canadian securities.
Find out how Share Data can help with a Medallion Signature Guarantee.
