If you are transferring or selling US/Canadian securities such as stocks or bonds, you will naturally want to take all measures to ensure your transaction is concluded smoothly and safely; mistakes can be regretful and costly. A Medallion Signature Guarantee (MSG) is a type of certification which ensures that the signature authorising the transfer/sale is genuine and the signatory has legal authority to sign, offering peace of mind to all parties within a transaction.MSGs are issued by members of a Medallion Signature Guarantee programme for example banks (only those within the USA and Canada), trust companies and brokers.
Fraser and Fraser is a certified Medallion guarantor; we hold our own Medallion Signature Guarantee stamp for transactions of up to US$1,000,000.
We have produced this quick guide to help you understand the essentials of Medallion Signature Guarantees.
What is a Medallion Signature Guarantee?
If you are arranging the transfer, sale or transmittal (due to a company takeover) of securities, or a change of name of the holder, an MSG provides assurance that the signature on the transaction is genuine and by the appropriate person; this is mandated by the financial institutions handling transactions of this type.
The need for a Medallion Signature Guarantee can arise when an investor or their representative is dealing with holdings with companies that were previously UK-owned but have since been taken over by a North American firm. Examples include:
- Cadbury, which was taken over by Kraft in 2010
- UK Vodafone, which sold its 45% stake in Verizon Wireless to US telecoms group Verizon Communications for £130bn in 2013
When dealing with securities, a Medallion Signature Guarantee protects all participants involved, removing the possibility that someone might steal shares and cash them in. In addition, the transfer agent benefits from reduced liability in the event that the securities are misappropriated or forged, and the purchaser knows that they are buying legitimate securities from someone who has the legal right to transfer them.
Where do I get a Medallion Signature Guarantee from?
Only members of a Medallion Signature Guarantee programme can provide a signature guarantee. The best source of a Medallion Guarantee if you are based in North America is a bank, savings and loan association, brokerage firm, or credit union with which you already do business.
Can I obtain a Medallion Signature Guarantee if I am not based in North America?
Yes. Fraser and Fraser can provide the Medallion Signature Guarantee service to investors (or their legal representatives) who reside in the UK, Europe, Australia, New Zealand and other countries depending on the individual circumstances of the case. We are one of the few firms in the UK that has a Medallion Signature Guarantee stamp.
Is there a difference between a Medallion Signature Guarantee and a notarised document?
A Medallion Signature Guarantee and a notarised document can both used to verify the identity of parties involved and people agreeing to the documents in question. Only a Notary Public can provide a notarised document.
Another difference between a Medallion Signature Guarantee and a notarised document concerns liability. An organisation that issues a Medallion Signature Guarantee will be liable if your signature is forged.
If you are transferring securities, it is important to remember that notarised documents do not provide a suitable legal alternative to an MSG.
How can we help?
With a depth of experience dealing with a variety of holdings, we understand that each case is different. Fraser and Fraser offer a service tailored to your needs. With our ability to arrange Medallion Signature Guarantees in relation to stock and shares paperwork as well as the transfer and sale of US, Canadian and other international shareholdings, Fraser and Fraser are ready to help you.
Each application is assessed on a case by case basis and we will advise you of the necessary documentation required in response to individual enquiries. To protect our interests and that of our clients, ID checks must be performed before we can issue a Medallion Signature Guarantee.
Cost: from £195 per line of stock
If you require a Medallion Signature Guarantee, please contact our office on +44 (0) 20 7832 1400, email: msg@fraserandfraser.co.uk or visit our dedicated website for more information.
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