Medallion signature guarantee
A bank's stamp guaranteeing a signature on a securities transfer. It is not a notarization.
What it means
A notary confirms that the person who signed is who they said they were. A medallion signature guarantee goes further: the institution that applies it warrants the signature is genuine and that the signer had the authority to sign, and it accepts financial liability if that turns out to be wrong.
Transfer agents require one before moving securities out of a dead person's name, precisely because of that liability. The stamp carries a surety coverage limit, shown as a letter, and the limit has to cover the value being transferred.
Because the institution is taking on the risk, it will generally only guarantee a signature for an existing customer, and often only one with an established relationship. This is the part that surprises families: the guarantee cannot simply be bought at any bank, and the executor may have to open a relationship, or use the deceased's own institution, to get one.
It is also given in person. The signature is witnessed at a branch, which is a real constraint on an executor who lives in another state from the bank that will provide it, and it is worth establishing which branch can do it before traveling to one that cannot.
Why it matters
It is a frequent reason a securities transfer is returned unprocessed, and each round trip costs weeks.
It cannot be substituted with a notarization, however many notaries are willing to try, and a transfer agent will not accept one in its place.
When you are likely to meet it
- When transferring shares or a bond held directly with a transfer agent.
- When a brokerage will not retitle an inherited account without one.
- When the branch that holds the account turns out not to be one that provides the stamp.
- When the letter on the stamp turns out to cap the value it can cover.
Notarization and a medallion guarantee
They look similar on a page and do different jobs. Only one of them will move shares.
| What is being compared | Notarization | Medallion signature guarantee |
|---|---|---|
| What it confirms | That the signer is who they say they are | That the signature is genuine and the signer had authority |
| Who is liable if it is wrong | Nobody, in practice | The institution that stamped it |
| Where to get one | Widely — banks, shipping shops, libraries | Only from a participating institution, usually your own |
| Cost | A small fixed fee, sometimes free | Usually free to an existing customer, otherwise not available |
| Value limit | None | Set by the letter on the stamp |
| Accepted by a transfer agent | No | Yes |
If a transfer agent's letter asks for a medallion guarantee, a notary cannot substitute for it. Start with the institution where an account already exists.