Taylor Scott
Medallion Signature Guarantees (MSG) are highly regulated and are used to verify the identity and legal authority of individuals transferring financial assets like stocks or bonds. While not all banks offer this service, major U.S. banks like Bank of America, Chase, and Capital One do, although not every branch can provide it, and documents may need to be sent for review. To obtain an MSG, individuals typically need to have an account with the bank and present a valid government-issued photo ID, along with supporting documents.
| Characteristics | Values |
|---|---|
| Institutions offering Medallion Signature Guarantee | Major US banks like Bank of America, Chase, Capital One, Wells Fargo, and Colonial Stock Transfer |
| Requirements | A valid government-issued photo ID, the document(s) being stamped, and supporting documents |
| Cost | Free for account holders at some institutions; non-account holders may pay a nominal fee ranging from $10 to $100 |
| Timeframe | Typically takes 2-5 days after identity and transaction details are verified |
| Availability | Not all branches of participating banks offer this service; call in advance to confirm availability at a specific location |
| Alternatives | A financial institution may accept a notarized signature instead of an MSG, but this may depend on the type of transaction and associated risks |
| Online Options | Online options are available but may require a fee in the hundreds of dollars |
| Purpose | Used for securities transfer, ensuring the legal authority of transactions, and preventing unauthorized transfers |
| Programs | Supported by three primary programs: STAMP, SEMP, and MSP, which provide identity verification to financial institutions |
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What You'll Learn
Major US banks that offer the guarantee
A Medallion Signature Guarantee is often required when transferring financial assets like stocks or bonds. It is a special stamp that confirms your identity, signature, and legal authority to transfer securities. It is highly regulated and backed by specific programs and institutions, and not every bank branch can provide this service.
Bank of America
Bank of America provides medallion signature guarantee services for account maintenance or the transfer of securities held outside of Bank of America or Merrill accounts. The service is free for Bank of America Private Bank or Merrill Investment clients who have been with them for at least six months. For non-Merrill customers, there are ways to invest with Merrill to have the freedom to invest on your own terms. To obtain the guarantee, clients must meet with a Bank of America financial center associate to discuss their needs and bring all supporting documentation. The review process typically takes no longer than two business days, and select financial centers may be able to provide stamped documents on the same day if all required documents are provided.
Chase
Chase is another major US bank that offers the Medallion Signature Guarantee. However, not all branches may provide this service, and documents may need to be sent for review.
Capital One
Capital One also provides the Medallion Signature Guarantee, but again, not all branches may have an on-site reviewer, so documents may need to be sent for review.
It is important to note that obtaining a Medallion Signature Guarantee can be challenging due to the associated risks for banks. These guarantees are typically provided for well-known customers or those with solid, established relationships. Fees may apply, depending on the value of the assets and the customer's relationship with the bank.
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The Medallion Signature Guarantee process
A Medallion Signature Guarantee (MSG) is a type of identity verification that authenticates signatures on security transfer paperwork. It ensures that the signature authorising the transfer is genuine and that the person signing has the legal authority to do so. The process helps prevent fraud and protects both the financial institution and the individuals involved in the transaction.
To obtain an MSG, you must be a customer of the financial institution providing the guarantee. Major US banks like Bank of America, Chase, and Capital One offer this guarantee, but not all branches can provide it, and you may need to send your documents for review. Typically, you can obtain an MSG at a financial institution where you are a customer. Some institutions may offer MSGs free to account holders, while non-account holders may pay a nominal fee ranging from $10 to $100.
To initiate the MSG process, you should schedule an appointment with a financial centre associate and bring all the necessary documents to your appointment. These documents typically include a valid government-issued photo ID, the document(s) being stamped, and any supporting documents related to the transaction. It's important to note that all clients requesting the service must be present to sign.
Once your identity and transaction details have been verified, receiving the signature guarantee stamp typically takes two to five days. However, select financial centres with an on-site medallion signature guarantee stamp may provide stamped documents on the same day if all required documents are provided. After approval, your stamped document will be mailed to you via an overnight carrier.
It's worth mentioning that MSGs are highly regulated and backed by specific programs and institutions. To provide an MSG, a financial institution must be a member of one of three recognised Medallion Signature Guarantee Programs: the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), and the New York Stock Exchange Medallion Signature Program (MSP). These programs have strict rules to ensure the security and authenticity of financial transactions.
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Institutions that offer the guarantee
While not all banks offer a medallion signature guarantee, several major U.S. banks do. These include Bank of America, Chase, and Capital One. However, not all branches of these banks provide this service, and documents may need to be sent for review. Bank of America, for instance, provides medallion services free of charge for its Private Bank or Merrill Investment clients who have been with them for at least six months.
To obtain an MSG, a financial institution must be a member of a recognized Medallion program and meet strict guidelines for verifying identity and legal authority. The three primary programs are the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), and the New York Stock Exchange Medallion Signature Program (MSP). STAMP is the largest, with over 7,000 financial institutions in the U.S. and Canada.
PNC Bank is another institution that offers MSGs, and they outline the steps to obtaining one. These include gathering the required documents, such as a valid government-issued photo ID, the securities transfer form, and any supporting documents, then contacting your financial institution to schedule an appointment. The MSG stamp typically takes two to five days to be issued.
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The cost of the guarantee
The cost of obtaining a Medallion Signature Guarantee (MSG) varies depending on the financial institution and your relationship with it. Many major US banks like Bank of America, Chase, and Capital One offer this guarantee, although not every branch can provide it. Some banks offer MSGs free of charge for certain account holders, especially those with solid, established relationships. For example, Bank of America provides medallion services free of charge for Bank of America Private Bank or Merrill Investment clients who have been with them for at least 6 months. Other banks may offer MSGs at no cost to customers with checking, savings, or investment accounts.
Non-account holders or those without solid relationships with the bank may have to pay a nominal fee ranging from $10 to $100 for a $200,000 guarantee. The cost can vary depending on the amount of the transaction, with a $50 fee for a $100,000 guarantee from a credit union and $75 for the same amount from a bank. For higher amounts, the fee roughly doubles, so for a $200,000 guarantee, you may pay around $100.
It is important to note that Medallion Signature Guarantees are highly regulated and backed by specific programs and institutions, which may have their own requirements and fees. For example, the Securities Transfer Agents Medallion Program (STAMP) is the largest program, with over 7,000 financial institutions in the US and Canada. To obtain an MSG, you will need to gather the required documents, which typically include a valid government-issued photo ID, the completed securities transfer form, and any supporting documents related to the transaction. You will then need to contact your financial institution and schedule an appointment.
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Alternatives to the guarantee
While there is no direct alternative to a Medallion Signature Guarantee (MSG), some financial institutions may accept a notarized signature as an alternative for certain transactions. A notary public can verify the signer's identity and witness the document signing. However, it is important to note that a notarized signature does not carry the same level of guarantee regarding the legal authority of the signer to transfer securities. The acceptance of notarized signatures may vary depending on the institution and the type of transaction, with factors such as complexity, value, and associated risks being considered.
Another alternative is to make special arrangements with financial institutions, which may offer higher coverage limits for specific transactions. Contacting the transfer agent or the receiving institution directly can help ensure that all necessary guarantees are in place for high-value transactions. Additionally, some institutions may provide guidance and assist in ensuring that all required documentation is in order, allowing for a smoother and quicker transaction process.
For US shareholders, Computershare offers an alternative to the traditional medallion stamp. Shareholders can process their transfers without a medallion stamp by providing a copy of a government-issued identification and paying a processing fee. This service is available to shareholders with account values of $10,000 or less.
It is worth noting that Medallion Signature Guarantees are highly regulated and backed by specific programs and institutions, ensuring the security and authenticity of financial transactions. These programs include the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), and the New York Stock Exchange Medallion Signature Program (MSP).
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Frequently asked questions
A Medallion Signature Guarantee (MSG) is a stamp that verifies the identity and legal authority of the person signing a document. It is often required when transferring financial assets like stocks or bonds or changing the registration on a securities account.
Many major U.S. banks, including Bank of America, Chase, and Capital One, offer Medallion Signature Guarantees. However, not all branches of these banks provide this service, and you may need to send your documents for review. Some banks only offer this service to their account holders.
To obtain a Medallion Signature Guarantee, you will typically need to gather the required documents, including a valid government-issued photo ID, the completed securities transfer form, and any supporting documents related to the transaction. Then, contact your financial institution to schedule an appointment and verify your identity and transaction details.
Some financial institutions offer Medallion Signature Guarantees free of charge to their account holders, while non-account holders may have to pay a nominal fee, typically ranging from $10 to $100. Fees can vary depending on the relationship between the customer and the bank and the value of the assets involved in the transaction.
