Medallion Stamp: Required for Transferring Securities

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Medallion Stamp: Required for Transferring Securities

A medallion signature guarantee, also known as a medallion stamp, is designed to protect financial institutions and individuals from fraud when stocks, bonds or other financial assets are transferred from one account to another.

For example, if you are the executor of an estate, you may be required to obtain a medallion stamp to authorize the transfer of securities from the original owner’s account to beneficiaries.

If securities are held in a living trust, the trustee may have to obtain a medallion stamp to transfer them to the trust’s beneficiaries.

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You may also need a medallion stamp to transfer a brokerage account to another person, such as a family member, or to an account of your own with another firm.

A transfer of ownership for a certificate of deposit also typically requires a medallion stamp.

And if you’d like to give someone securities, you may need a medallion stamp to process the transfer — particularly if you’re giving physical stock certificates rather than electronic shares. In that case, you’ll be required to sign the back of the certificate and provide the medallion stamp to authorize the transfer.

If you think you need a medallion stamp, start by looking up the transfer agent, which is responsible for recording changes of ownership and other shareholder records for publicly traded companies, mutual funds and other entities. (Find the transfer agent’s name by going to the website of the company that holds the asset you’re transferring and searching the investor relations section.)

The agent will provide you with the necessary forms to make the transfer.

Then find out whether your bank or credit union is authorized to provide a medallion stamp. If it can, you may be able to get a stamp at no cost, although some will provide stamps only to customers who have had an account for a certain amount of time — say, six months.

If your bank doesn’t offer medallion stamps, you may be able to get one at another bank, typically for a fee ranging from $10 to $50, depending on the institution and the complexity of the transaction.

The Securities Transfer Association, a trade association for transfer agents, provides guidance on finding an institution that participates in the medallion signature guarantee program.

Applying for a medallion stamp

You must apply for a medallion stamp in person, so make an appointment at your financial institution or one that provides the service.

Generally, you’ll need a government-issued photo ID, the completed securities transfer form and account statements or stock certificates if you’re transferring physical securities.

For transfers involving a trust, you may need a copy of the trust agreement, power of attorney documents and/or a death certificate. Depending on the type of transaction, the institution may ask for additional paperwork, so make sure to request a list of required documents in advance.

In most cases, the review of a medallion stamp application will take two to five business days, although the time frame will vary depending on the complexity of the transaction.

Medallion stamps have no standard expiration date — transfer agents typically determine the period during which the stamp is valid. Check how long you have to complete the transfer once you’ve obtained the stamp. If there’s a delay, you may have to reapply for a medallion stamp guarantee.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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