What Is a Signature Guarantee?
A signature guarantee is a form of authentication, issued by a bank or other financial institution, which verifies the legitimacy of a signature and the signatory's overall request. This type of guarantee is often used in situations where financial instruments, such as securities, are being transferred.
In most cases, the guarantor, generally a bank or other financial institution, accepts all consequences in the event that the signature is fraudulent.
Key Takeaways
- A signature guarantee is required when an individual investor wants to sell or transfer securities held in physical certificate form.
- Using a signature guarantee service is a great way to prevent others from stealing your identity.
- The three Medallion signature guarantee programs include STAMP (the Securities Transfer Agents Medallion Program), SEMP (the Stock Exchange Medallion Program), and MSP (the New York Stock Exchange Medallion Signature Program).
- An investor can obtain a signature guarantee from a financial institution that is a member of one of these programs.
How a Signature Guarantee Works
With the number of crimes related to identity theft rising each year, using a signature guarantee service is a great way to prevent others from stealing your identity. A signature guarantee is required when an individual investor wants to sell or transfer securities, such as stocks or bonds, held in physical certificate form. If an owner holds securities through a broker, they will not need to obtain a signature guarantee to sell or transfer the securities.
An investor can obtain a signature guarantee from a financial institution. However, this institution must be a member of a recognized securities guarantee program, such as Medallion.
The three Medallion programs include STAMP (the Securities Transfer Agents Medallion Program), SEMP (the Stock Exchange Medallion Program), and MSP (the New York Stock Exchange Medallion Signature Program). STAMP participants include more than 7,000 U.S. and Canadian financial institutions; SEMP consists of regional stock exchange member firms and clearing and trust companies; NYSE member firms belong to MSP.
Membership with the Medallion program ensures that transfer agents will immediately accept certificates for processing.
Example of Using a Signature Guarantee
Imagine an investor, Alex, wants to sell their shares of ABC Company. Alex did not purchase these shares through a broker, and instead holds a share certificate, which is a written document that serves as legal proof of ownership of a set number of a company’s shares. Alex must sign this certificate in order to sell them, however, before the transfer agent accepts the certificates, the agent requires a signature guarantee to ensure Alex's identity and intention.
At this point, Alex must reach out to their financial institution in order to obtain a signature guarantee. While some banks may charge a small fee for this service, others, such as Bank of America, provide guarantees free of charge, as long as you have been a BofA client for at least six months.
Signature guarantees transfer the liabilities of losses to the transfer agent and away from the individual investor. One means of avoiding a signature guarantee is to have securities held in street name. This means that the securities are held in the name of a brokerage firm (instead of an individual’s name).
$56 Billion
The amount of money lost by consumers to identity fraud in the year 2020, according to a study by Javelin Strategy & Research.
Signature Guarantees and Other Forms of Identity Theft Protection
While increasingly widespread, identity theft can still be prevented. Regularly checking personal accounts and quickly correcting discrepancies can help mitigate the effects of a breach. Choosing multi-factor authentication when logging into sensitive apps is also helpful. Multi-factor authentication relies on something more than simply a password to access an account. For example, the Google Authenticator requests the use of a time-sensitive six-digit code. This is sent to a user’s phone. Using a password manager for online banking accounts can also add another layer of protection.
Sponsored Results
“Efficient” - according to 2 users
“I gave this branch 5 stars 5 years ago and I still feel the same. This review is for Schools First in general (I just had to share) but I'm leaving my comment here since I opened my…” more
See business for more info
“Efficient” - according to 1 user
“I opened an account on Friday and waited to leave a review to see if all the bad reviews are true about the fees. They are all false! Didn't take long to open my account. I even…” more
See website for more info
“Professional” - according to 7 users
“A drunk driver hit and run my vehicle, my engine and transmission started to break down. It was time to get a new car and I really didn't even know how or where to start. Derek was…” more
See business for more info
-
“Professional” - according to 1 user
“Life saver!! Got a call to say that somebody had somehow stold my mail and tried to cash a check that I supposedly had written!! Thank God for fast thinking Nancy a Navy Fed employee…” more
See business for more info
-
All "medallion signature guarantee" Results in Riverside, CA
“The same is true of medallion signature guarantees, which are difficult to get; and good-looking” more
See business for more info
“I needed a medallion signature guarantee placed on some basic financial documents. Unfortunately” more
See business for more info
“manager that I have to deal with in order to get anything done. What I need is a signature guarantee/medallion signature” more
See business for more info
“a medallion signature guarantee stamp. We had just waited an hour at the Pasadena B of A where they said” more
See business for more info
“The 57 Fwy South was a hassle getting to this place but it was worth it. The young lady, Callie, who helped me at the front desk was very pleasant and efficient. My mother had died…” more
See business for more info
“HORRIBLE EXPERIENCE. I needed to put several accounts into a trust and get a medallion signature guarantee” more
See business for more info
“A bit slow on the teller side. 6 people waiting with only one teller working That's 30m waiting time. Use the ATM machines instead” more
See business for more info
“the Superior Court of California, completing their 10 page form to obtain my money and a medallion signature guarantee would” more
See business for more info
“Giving this branch a 5/5 because of CESAR. My husband and I needed something very important and tedious however Cesar was beyond helpful. He made sure we were comfortable and…” more
See business for more info
“I had such a great experience opening my account here, Veronica was amazing very knowledgeable and explained everything very thoroughly she made me feel comfortable! I definitely…” more
See business for more info
Can't find the business?
Adding a business to Yelp is always free.
Add business
Related Searches in Riverside, CA
Search medallion signature guarantee in popular locations
Nearby citiesMoreRelated Cost Guides
Related Cost Guides
Frequently Asked Questions and Answers
What are some popular services for investing?
Some popular services for investing include:
Virtual Consultations
What are people saying about investing services in Riverside, CA?
This is a review for a investing business in Riverside, CA:
"I needed a medallion signature guarantee placed on some basic financial documents. Unfortunately the management had no clue how to handle the transaction which I could have forgiven however their arrogance I could not. The Bank of America across from the airport handled it."
See more reviews for this business.