Avoiding Mistakes When Looking for a US Stock Medallion Guarantee

A specialised stamp known as the Medallion Signature Guarantee (MSG) is needed to approve the sale or transfer of securities (stocks, bonds, and mutual funds) in the United States and Canada. It is an assurance from a financial organisation (the Guarantor) that the signer is legally capable, the signature is genuine, and the Guarantor accepts responsibility for any fraudulent activity.

For a step-by-step guide on US stock transfers, see our guide to US stocks and shares.

Despite being necessary for security, getting an MSG can be a complex procedure, particularly for complicated transactions or non-US citizens. Here are some common mistakes to avoid.

Confusing the MSG with a Notary Public

This is a common mistake. A Medallion Guarantee is not a notarisation and they are not interchangeable. A Notary Public verifies the identity of the signer and that the signature is voluntary, whereas a Medallion Signature Guarantee verifies identity, legal authority, and capacity to sign documents for securities transfer. A notary public has minimal liability, whereas an MSG guarantor has liability up to the stamp’s limit.

Transaction Value Above the Stamp Limit

Not all medallion stamps are created equal. Each has a coded prefix that establishes the highest amount of money for which the Guarantor is responsible. The transfer agent will reject the paperwork if the value of the securities being transferred exceeds the stamp’s limit.

For official guidance on US securities regulations, see the US Securities and Exchange Commission, Investor Guidance.

Not Being a Current Client

Many large US banks and broking firms will only offer an MSG to current clients who have a long-standing, established relationship with the institution because of the substantial financial obligation they take on. They might even have criteria for tenure or a minimum account size.

See our full list of Medallion Guarantee banks that provide MSG services.

Living Outside of the United States

This is perhaps the biggest obstacle. The majority of financial institutions in the United States are hesitant to assume the risk of ensuring the signature of a non-customer, particularly one who does not reside in the United States.

International investors should also review IRS guidance on international taxpayers for compliance.

Inaccurate or Missing Documentation

The document is given to a strict transfer agent. An expired document, a single missing initial, or a name difference can all result in rejection and require you to start the application procedure over. Make sure that all forms are completed but not signed, and that all supporting paperwork, such as ID and proof of ownership, are ready. Also note that the US date format differs from the UK, so MM/DD/YY as opposed to DD/MM/YY.

Contact Medallion Guarantee on 020 3985 9551