Signature Guarantee: Definition, Types, and Requirements
Understand signature guarantees: Your protection against securities fraud and unauthorized transfers.
What Is a Signature Guarantee?
A signature guarantee is a formal certification provided by an eligible financial institution that authenticates and verifies the legitimacy of a person’s signature on important financial documents. This certification serves as a guarantee that the signing individual is who they claim to be and that they are authorizing the transaction or action documented. The institution providing the signature guarantee pledges its financial backing to support the authenticity of the signature, making it a powerful deterrent against fraud and unauthorized transactions.
Signature guarantees are particularly important in the securities industry, where they are required for transferring or selling physical securities certificates. When you hold securities in physical certificate form and want to transfer or sell them, you must have your signature guaranteed on all relevant documents before a transfer agent will accept the transaction instructions. This process protects both investors and financial institutions by ensuring that only authorized individuals can execute transfers.
Unlike a notarization, which is provided by a notary public and simply verifies the identity of the signer, a signature guarantee carries the financial backing of a regulated financial institution. This distinction is crucial because signature guarantees involve institutional liability, making them more secure and valuable for protecting against securities fraud.
The Purpose and Importance of Signature Guarantees
The primary purpose of signature guarantees is to prevent unauthorized transfers of securities and protect investors from fraud. Transfer agents—companies that manage the transfer of securities on behalf of issuers—insist on signature guarantees because they significantly limit institutional liability and potential losses if a signature turns out to be forged. Without this protective measure, the transfer agent could be held responsible for fraudulent transactions, creating substantial financial risk.
Signature guarantees also serve a broader protective function in the financial system. By requiring verification from reputable financial institutions, the system creates multiple layers of authentication that make it extremely difficult for criminals to forge signatures and steal securities. This is especially important given that physical securities certificates can be valuable and are vulnerable to theft if proper safeguards are not in place.
For investors, signature guarantees provide peace of mind that their securities transactions are secure and that only they can authorize transfers of their assets. This protection is essential, particularly for individuals with significant investments in physical securities.
Types of Signature Guarantees
There are several types of signature guarantee programs, each with specific institutions that participate and provide these services:
Medallion Signature Guarantees
Medallion signature guarantees are insurance-backed signature guarantees that must contain the signature of an authorized representative of the guarantor institution. The Medallion Signature Guarantee Program protects investors by making it significantly harder for people to steal securities by forging signatures on securities certificates and related documents. There are three primary Medallion Signature Guarantee Programs:
Securities Transfer Agents Medallion Program (STAMP)
The STAMP program includes more than 7,000 U.S. and Canadian financial institutions as participants. This is the most widely available medallion program and is often the most accessible option for individual investors seeking signature guarantees.
Stock Exchanges Medallion Program (SEMP)
The SEMP program includes regional stock exchange member firms, clearing companies, and trust companies as participants. This program is typically utilized by more sophisticated investors and institutions involved in securities trading.
New York Stock Exchange Medallion Signature Program (MSP)
The MSP program has participants that include NYSE member firms. This program is specifically tied to the New York Stock Exchange and its member institutions.
When You Need a Signature Guarantee
Signature guarantees are required in several specific situations involving securities and account management:
Securities Transfers and Sales
If you hold securities in physical certificate form and want to transfer or sell them, you will need to sign the certificates and securities powers—a legal document separate from the securities certificate that investors use to transfer or assign ownership to another person or entity. Your signature must be guaranteed on all these documents before a transfer agent will accept the transaction instructions.
Bank Account Linking
When linking a bank account to an investment account and the bank account registration does not include the names of all account owners, the bank account owners’ signatures must be guaranteed. In such cases, a signature guarantee form must be completed for each bank account owner and returned by mail.
Account Withdrawals
A signature guarantee may be required if a withdrawal is requested and certain conditions apply to your account. Similarly, when a change of account registration is requested, a signature guarantee is required under specific circumstances, such as when the change affects account ownership or registration status.
Who Can Provide Signature Guarantees
Not all financial institutions can provide signature guarantees. An investor can obtain a medallion signature guarantee only from a financial institution that participates in one of the Medallion Signature Guarantee Programs. The following types of institutions generally can provide signature guarantees:
- Commercial banks
- Savings banks and savings and loan associations
- Credit unions
- Broker-dealers and brokerage firms
- Trust companies
- Stock exchange member firms
However, there are important limitations. If a financial institution is not a member of a recognized Medallion Signature Guarantee Program, it will not be able to provide medallion signature guarantees. Additionally, if you are not a customer of a participating financial institution, it is unlikely that the institution will guarantee your signature, even if it participates in a medallion program. Therefore, the best source of a signature guarantee is a bank, savings and loan association, brokerage firm, or credit union with which you already do business.
How to Obtain a Signature Guarantee
Obtaining a signature guarantee is a straightforward process, but it requires working with an eligible financial institution:
Step-by-Step Process
- Contact your financial institution: Reach out to the bank, credit union, or brokerage firm where you maintain an account and ask about their signature guarantee services.
- Verify participation: Confirm that the institution participates in one of the three Medallion Signature Guarantee Programs (STAMP, SEMP, or MSP).
- Gather required documents: Prepare all documents that require signature guarantees, such as securities powers or transfer forms.
- Visit in person: You will typically need to visit the financial institution in person to have your signature guaranteed by an authorized representative.
- Provide identification: Bring valid identification to verify your identity.
- Complete the process: The authorized representative will witness your signature and provide the formal guarantee stamp and signature on the documents.
International Considerations
For overseas investors, signature guarantees may still be available through international channels. You may be able to obtain a medallion signature guarantee from an overseas branch of a U.S. or Canadian bank, broker, or credit union with whom you do business. However, availability may be limited depending on the country and institution. If you have been unable to obtain a medallion guarantee, you should contact the transfer agent or issuer corporation requiring the medallion signature guarantee for assistance and guidance on alternative solutions.
Signature Guarantees vs. Notarization
It is important to understand the difference between a signature guarantee and notarization, as they are not interchangeable. A notarization is provided by a notary public and simply verifies the identity of the person signing a document. In contrast, a signature guarantee is provided by a regulated financial institution and carries that institution’s financial backing. Many financial institutions specifically do not accept notarization from a notary public in lieu of a signature guarantee for certain transactions. For securities transfers and other sensitive financial transactions, a signature guarantee is the required authentication method, not a notarization.
Common Situations Requiring Signature Guarantees
| Situation | Description | Why Required |
|---|---|---|
| Securities Transfer | Transferring ownership of physical securities certificates | Prevents forged transfers and protects transfer agents from liability |
| Securities Sale | Selling physical securities certificates | Ensures only authorized individuals can execute sales |
| Bank Account Linking | Linking a bank account with mismatched ownership names | Verifies consent of all account owners for the transfer |
| Account Registration Change | Changing how an investment account is registered | Confirms authorization for ownership structure changes |
| Large Withdrawals | Withdrawing significant funds under certain conditions | Verifies the request is legitimate and authorized |
Frequently Asked Questions About Signature Guarantees
Q: What is the difference between a signature guarantee and a medallion signature guarantee?
A: A signature guarantee is a general certification of a signature’s authenticity provided by an eligible financial institution. A medallion signature guarantee is a specific type of signature guarantee that is insurance-backed and must contain the signature of an authorized representative of the guarantor institution. All medallion signature guarantees are signature guarantees, but not all signature guarantees are medallion signature guarantees.
Q: Can a notary public provide a signature guarantee?
A: No. While a notary public can provide a notarization that verifies identity, this is not the same as a signature guarantee and is not accepted in place of a signature guarantee for securities transfers and other financial transactions requiring signature guarantees.
Q: How much does a signature guarantee cost?
A: Costs vary by institution and are typically free or minimal for customers of the financial institution providing the guarantee. Non-customers may be charged a fee. It is best to contact your financial institution directly for pricing information.
Q: Can I obtain a signature guarantee if I am not a customer of the financial institution?
A: Most financial institutions will not provide signature guarantees to non-customers, even if they participate in a medallion program. The best source for a signature guarantee is a financial institution where you already maintain an account.
Q: How long does a signature guarantee last?
A: Signature guarantees typically do not expire, but they must be recent and from a reputable institution. Transfer agents may have specific requirements about how recently the guarantee was issued.
Q: What should I do if I cannot find a financial institution to provide a signature guarantee?
A: Contact the transfer agent for the securities issuer or the issuer itself for assistance. In some cases, the issuer acts as its own transfer agent. The transfer agent can provide guidance on obtaining a guarantee or may offer alternative solutions for executing your transaction.
Q: Are signature guarantees required for all securities transfers?
A: Signature guarantees are required when transferring or selling physical securities certificates. However, if your securities are held in book-entry form or through a brokerage account, signature guarantees may not be necessary because the transfer process is different.
Q: Can I get a signature guarantee at any branch of a participating bank?
A: Not necessarily. While a bank may participate in a medallion program, not all branches may have authorized representatives who can provide signature guarantees. Contact your specific branch to inquire about availability and scheduling.
References
- Signature Guarantee — Capital Group. Accessed 2025-11-29. https://www.capitalgroup.com/individual/service-and-support/account-updates/signature-guarantee.html
- Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities — U.S. Securities and Exchange Commission. Accessed 2025-11-29. https://www.investor.gov/introduction-investing/investing-basics/glossary/medallion-signature-guarantees-preventing
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