The process of investing in securities can be complicated, especially given that the US stock market accounts for over half of the global stock market value and that overseas investors must abide by additional rules when selling shares on the US market. For investors outside of North America, a Medallion Signature Guarantee may be necessary in order to transfer ownership of shares. There can also be IRS criteria that need to be met. Here we look at the demand for Medallion Signature Guarantees in the UK.
Medallion Signature Guarantees – A Brief Overview
Securities and Exchange Commission (SEC) first launched the Medallion Signature Guarantee, sometimes referred to as the Medallion Stamp, in 1992. It ensures that an investor’s signature is genuine. By making it more difficult to fake signatures for unlawful, fraudulent transfers, the Medallion Signature Guarantee Programme protects shareholders, and by offering a guarantee on the legality of the stocks and shares to be sold or transferred, it also reduces the liability of the transfer agency receiving the certificates.
It may be challenging to obtain a Medallion Signature Guarantee in the UK because only a minimal number of firms outside of North America are licenced to provide them. However, working with the right professionals, such as Medallion Guarantee, will ensure everything is taken care of.
Medallion Signature Guarantees – The UK
Analysis from 2107 stated that 15% of all inbound foreign direct investments (FDI) in the US originated from the UK, and in 2019, foreign investors held 40% of US-listed stocks. Combining these numbers, it is estimated that 3.5% of the US-listed global stock market is owned by investors in the UK; as a result, ownership transfers may require a Medallion Signature Guarantee.
IWC Wills and Probate has been one of the few certified businesses in the UK authorised to issue Medallion Signature Guarantees since 2016. To get a Medallion Signature Guarantee stamp for the transfer or sale of US or Canadian shares, IWC need not act under a Power of Attorney.
Medallion Waivers
Medallion Signature Guarantees are not required for all investors. Instead of selling or transferring shares with a value under $10,000, investors can choose a Medallion Waiver. Due to the potential for irrevocable losses, Medallion Waivers are not offered by all Transfer Agents and are not a part of any formal programmes. Medallion Waivers, in contrast to the Medallion Signature Guarantee Programme, expose the Transfer Agent to the risks of fraudulent transfers without providing any protection.
Contact Medallion Guarantee on 0203 985 9551.