Given that the US stock market accounts for more than half of global market value and that foreign investors are subject to additional regulations when selling shares on the US market, investing in securities can be challenging. Transferring ownership of shares may require a Medallion Signature Guarantee for investors outside North America. Additionally, there may be IRS requirements that must be fulfilled. This blog examines the demand for Medallion Signature Guarantees in the UK.
Before applying for your Medallion Stamp, it’s important to understand exactly what the process involves, our detailed overview of the Medallion Guarantee explains how it works, who needs one, and how to obtain approval in the UK.
What is a Medallion Signature Guarantee?
The Medallion Signature Guarantee, often known as the Medallion Stamp, guarantees the authenticity of an investor’s signature. While the current program structure and rules introduced by the Securities and Exchange Commission (SEC) became effective on February 24, 1992, this rule formalised and made mandatory an existing practice. Medallion signature guarantee programs existed before 1992. For a deep dive into the mechanics and purpose of an MSG, check out this blog about, Understanding Medallion Signature Guarantees.
The Medallion Signature Guarantee Program protects shareholders by making it harder to forge signatures for illegal, fraudulent transfers. It also lessens the liability of the transfer agency that receives the certificates by providing a guarantee regarding the legality of the stocks and shares to be sold or transferred. Because so few companies outside North America are authorised to offer Medallion Signature Guarantees, obtaining one in the UK may be challenging. However, everything will be taken care of if you engage the appropriate experts, such as Medallion Guarantee. For a straightforward explanation of when you might need a medallion guarantee, take a look at What is a Medallion Signature Guarantee?
Can You Get a Medallion Signature Guarantee Outside the US?
The demand for Medallion Signature Guarantees in the UK is significant, often driven by historic takeovers of UK companies (such as Cadbury or Vodafone) by US firms, leaving UK shareholders with North American securities. Furthermore, a substantial number of UK investors hold US-listed shares directly, necessitating a guarantee for sale or transfer. Because major UK high-street banks typically do not offer this service, the required stamp must be obtained from one of the few UK-based professional firms, such as Share Data or Fraser and Fraser, who are authorised members of the STAMP (Securities Transfer Agents Medallion Program)
Medallions Waivers
Not all investors need to get Medallion Signature Guarantees. Investors can opt for a Medallion Waiver rather than sell or transfer shares valued at less than $10,000. Medallion Waivers are not a part of any official programs and are not available from all Transfer Agents due to the possibility of irreversible losses. Unlike the Medallion Signature Guarantee Program, Medallion Waivers offer no security and instead expose the Transfer Agent to the dangers of fraudulent transfers.
If you’d like a deeper breakdown, our page What is a Medallion Guarantee? explains the mechanics and legal basis of the stamp.
Contact Medallion Guarantee on 0203 985 9551.