How to Transfer the Ownership of Stocks, Shares, and Investment Securities from the U.S. and Canada
handshake – MSG guide banner15012021
It is a statutory requirement to obtain a Medallion Signature Guarantee when transferring securities, stocks, or shares from the United States or Canada. This guarantee serves as a safeguard, protecting accounts from illegal or fraudulent transfers and potential losses for investors. However, it’s crucial to understand the endorsement guarantee vs signature guarantee distinction, and to recognize whether a Medallion Signature Guarantee is the same as a notary.
This guide answers common questions such as:
- What is a Medallion Signature Guarantee?
- Who Requires a Medallion Signature Guarantee?
- Why Do You Need a Medallion Signature Guarantee?
- Medallion Signature Guarantee Requirements
- Endorsement Guarantee vs Signature Guarantee
- Is a Medallion Signature Guarantee the Same as a Notary?
- How Can Share Data Help?
By the end of this guide, you will have a clearer understanding of Medallion Signature Guarantees and the specific requirements to obtain one. If you have further questions, please contact Share Data’s team of experts.
What is a Medallion Signature Guarantee?
A Medallion Signature Guarantee is an authentication stamp used in the U.S. and Canada to verify the authenticity of signatures when transferring securities. It was introduced in the 1990s to combat rising levels of identity theft and fraud. The stamp, which contains a barcode and is produced with specialized ink, confirms that the signer is authorized to execute the transaction.
Endorsement Guarantee vs Signature Guarantee
Understanding the endorsement guarantee vs signature guarantee distinction is essential when dealing with financial documents. An endorsement guarantee ensures that the signature on a document is valid, while a signature guarantee, like the Medallion Signature Guarantee, provides additional assurance that the endorser has the authority to sign and transfer the asset. Financial institutions and transfer agents will often require specific types of guarantees depending on the nature of the transaction.
Is a Medallion Signature Guarantee the Same as a Notary?
A frequently asked question is whether a Medallion Signature Guarantee is the same as a notary. The answer is no. A Medallion Signature Guarantee protects the transfer of securities and minimizes the liability of financial institutions, whereas a notary public primarily witnesses signatures on legal documents. This distinction is crucial when handling asset transfers in North America, as the Medallion Signature Guarantee offers a higher level of financial risk management.
Medallion Signature Guarantee Requirements
Meeting Medallion Signature Guarantee requirements is necessary before obtaining the stamp. The U.S. Securities & Exchange Commission (SEC) mandates that the Medallion Signature Guarantee can only be provided by members of approved programs such as:
- Securities Transfer Agents Medallion Program (STAMP)
Covers over 7,000 U.S. and Canadian financial institutions, as well as select companies in the United Kingdom. - Stock Exchange Medallion Program (SEMP)
Includes regional stock exchange member companies and clearing trust companies. - New York Stock Exchange Medallion Signature Program (MSP)
Encompasses companies from the NYSE.
To obtain a Medallion Signature Guarantee, financial institutions often require documentation such as stock transfer forms, proof of identity, and evidence of ownership. These Medallion Signature Guarantee requirements ensure that the transfer process is secure and that only authorized individuals can complete the transaction.
Who Requires a Medallion Signature Guarantee?
Typically, solicitors, stockbrokers, accountants, and anyone owning shares, stocks, or assets in the U.S. or Canada will need to obtain a Medallion Signature Guarantee when selling or transferring securities. The stamp is required by financial institutions and transfer agents to authenticate identity and confirm ownership of assets.
Why Do You Need a Medallion Signature Guarantee?
A Medallion Signature Guarantee is necessary for several reasons:
- Identity Verification: It confirms the identity of the person selling or transferring securities.
- Proof of Ownership: The stamp verifies that the seller or transferor is legally authorized to act on the securities.
- Fraud Prevention: The guarantee protects against fraudulent activity by ensuring only authorized parties can initiate transfers.
When dealing with North American securities, a Medallion Signature Guarantee provides a critical layer of protection for all parties involved:
- Transfer Agents: Reduces their liability in the event of fraudulent transfers.
- Buyers: Guarantees the legitimacy of the transaction and that the seller is authorized.
- Shareholders: Prevents unauthorized parties from selling or transferring shares.
How to Obtain a Medallion Signature Guarantee
Most banks, brokerage firms, credit unions, and savings and loan associations in North America will offer Medallion Signature Guarantee stamps, but only to account holders who are U.S. or Canadian citizens.
If you are based overseas and need a Medallion Signature Guarantee, you will need to contact a STAMP member institution that offers these guarantees. Be sure to verify that you meet the Medallion Signature Guarantee requirements before proceeding.
How Can Share Data Help?
Share Data is one of the few companies in the United Kingdom certified to administer a Medallion Signature Guarantee stamp. Since 2014, Share Data has been a member of the Securities Transfer Agents Medallion Program (STAMP), providing services to clients with assets in North America.
To obtain a Medallion Signature Guarantee through Share Data, the following documents are required:
- Stock Transfer Form
- Certified Copy of the Client’s Passport
For deceased estates: The executor’s passport and Grant of Probate (or a copy of the Will and death certificate if a Grant of Probate has not been issued). - Certified Copy of a Utility Bill (dated within the last 3 months)
For deceased estates: The executor’s utility bill. - Copy of DRS or Dividend Statements
Evidence of ownership of the shares. - Payment to Share Data Limited
Transfer and Sale of North American Assets
Share Data can assist with the transfer or sale of North American assets without needing to act under a Power of Attorney, thanks to the authority provided by the Medallion Signature Guarantee stamp. Our services also extend to transferring or selling assets in other developed markets. Deposited assets are securely held by our agent’s overseas custodian, Bank of New York Mellon, allowing for client funds to be received in all major world currencies.
For more information or assistance with Medallion Signature Guarantees, contact Share Data’s team today.
How to transfer the ownership of stocks or shares and investment securities from the U.S. and Canada
It is a statutory requirement to obtain a Medallion Signature Guarantee when managing the movement of securities, stocks or shares from the United States of America or Canada.
The Medallion Signature Guarantee guide aims to answer common questions such as what is a Medallion Signature Guarantee, how to obtain one, who and why you need a Medallion Signature Guarantee. By the end of the guide, you will have gained a better understanding of Medallion Signature Guarantees.
+44 1403 271170
sales@sharedata.co.uk
