what is Medallion Stamp Guarantee

A Medallion Signature Guarantee (MSG) is a specialized stamp or signature guarantee used in the United States to authenticate the transfer of securities, confirming the genuineness of the signature, the signer's legal capacity, and authority to execute the transaction. Here's a detailed breakdown of the MSG: 1. **Purpose**: The primary purpose of a Medallion Signature Guarantee is to provide assurance to financial institutions and other parties involved in the transaction that the signature on the securities transfer document is authentic and legally valid. 2. **Obtaining a Medallion Guarantee**: MSG can be obtained from various sources, including banks, credit unions, brokers, and other financial firms. Additionally, programs like the Securities Transfer Agents Medallion Program (STAMP), Stock Exchange Medallion Program (SEMP), and New York Stock Exchange Medallion Signature Program (MSP) provide authorized channels for obtaining the guarantee. 3. **Coverage Limitations**: Each Medallion Guarantee has a specific coverage limit, identified by an alpha prefix on the stamp. If the transaction value exceeds this limit, the guarantee will be rejected. Financial institutions accepting the MSG will typically accept liability for forgery-related losses up to the coverage limit associated with the stamp. 4. **Legal and Financial Institution Liability**: In the event of forgery, the financial institution providing the Medallion Guarantee will typically cover the loss up to the coverage limit. This ensures that the parties involved in the transaction have a certain level of protection against fraudulent activities. 5. **Eligibility and Fees**: Individuals seeking a Medallion Guarantee may need to meet certain eligibility criteria and may be charged fees for the service. It is advisable to contact the provider directly to determine the specific requirements and associated costs. In summary, a Medallion Signature Guarantee is a critical component in the secure transfer of securities in the United States, providing a legal and financial safeguard against fraudulent activities. Its implementation ensures the authenticity of signatures and the legitimacy of transactions, thereby protecting all parties involved.