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What You Should Know About Medallion Signature Guarantees

 

The Medallion Signature Guarantee is required any time a sale or change of ownership of a security occurs, whether through the issuing entity, mutual fund, securities broker or transfer agent. This special guarantee protects against securities being transferred fraudulently.

Important - a Medallion Signature Guarantee is available ONLY when a sale or ownership change of a security is involved. It does not apply to address changes, account number changes, and similar events that do not result in a sale or ownership change of a security.

Financial institutions that offer Medallion Signature Guarantees are providing a valuable service designed to protect members who are transferring securities. Unlike traditional Notary Public services, the Medallion Signature Guarantee is backed by both financial and insurance requirements.

 

First Heritage FCU Medallion Signature Guarantee Guidelines:
  • Medallion Guarantees are performed for First Heritage FCU accountholders only. There will be no charge for providing this service to our members.
  • Your proof that you are the appropriate person to sign in a capacity other than the owner (Power of Attorney, Trustee, Executor, etc.). Proof may include Power of Attorney documents, Marriage Certificate, Trust Documents, Death Certificate, Letters of Office, and Corporate Resolutions.
  • The member must bring a valid, unexpired, form of identification with them when they come to have their signature guaranteed. This form of identification should preferably have a picture.
  • If the document requires more than one signature all parties should come in together and all must have the required forms of identification.
  • Medallion Guarantees at First Heritage FCU may only be provided for securities with a total value of $100,000 or less. Your most recent account statement (no more than 6 months old) showing ownership, account number, and value of the security.
  • The member must bring the unsigned document that they wish to have signature guaranteed with them and sign it in the presence of the officer applying the medallion.

Check to see that there is a blank box in proximity to the signature(s) area designated for the Signature Guarantee. When a separate box is not provided, proof of authenticity may be affected and your document(s) could be rejected by the financial institution that requires the Medallion imprint.

Under the Medallion Signature Guarantee program, First Heritage may retain copies or documentation of all documents and forms examined and signed. First Heritage may ask for other documentation in addition to what is listed above, or consult with legal counsel if necessary.

First Heritage FCU may also decline to provide a Signature Guarantee if documentation and/or forms provided are insufficient to determine the appropriate person to sign.

 

We offer this service at 3 of our locations:
  • Painted Post, NY
  • Wellsboro, PA
  • Elmira Heights, NY

Please contact us at 800-833-3338 if you have any questions concerning the program or to schedule an appointment.

 

ANSWERS TO FREQUENTLY ASKED QUESTIONS:
Q. Is the Medallion Signature Guarantee a legal commitment from my Guarantor Firm?
A. Yes. Your Guarantor has obtained a surety bond and executed an indemnity agreement that requires them to respond to claims of loss from wrongful transactions resulting from fraudulent or unauthorized endorsements.
 
Q. What warranties are made by my Guarantor when a Medallion Signature Guarantee is provided?
A. When a Guarantor provides a Medallion Signature Guarantee, it is warranting that: (1) your endorsement is genuine, (2) you have the capacity to sign the documents, and (3) if someone is signing documents for you they have authority to do so.
 
Q. What financial risk does this involve for your Guarantor?
A. All losses resulting from a fraudulent transaction that was Medallion Signature Guaranteed by your Guarantor firm are subject to claim resolution and recoupment.
 
Q. Can my Guarantor firm refuse to provide a Medallion Signature Guarantee of my endorsement?
A. Yes. Your Guarantor should not provide a Medallion Signature Guarantee if: (1) all required documents are not in order, (2) the value of the transaction exceeds the surety bond limit, or (3) there is a determination that the transaction is irregular.
 
Q. Why must I provide evidence of ownership?
A. Identification is required to prevent fraud. A certificate, statement, cancelled check or other documents provided by the Issuer or Transfer Agent for the security provides your bank with the identities of all owners of the security.
 
Q. When there are joint owners, why must all be present to endorse documents? What if it’s not possible?
A. Having all owners present for endorsements offers greater certainty that the transaction is not fraudulent. If all owners cannot be present, the transaction can be completed using a Securities Specific Power of Attorney that your Guarantor can obtain.
 
Q. What should I do if I believe I’m involved in a fraudulent transaction?
A. If you have not been in contact with the Issuer of the security or the Transfer Agent, do so immediately. Transfer Agent contact information will be available on statements, letters, checks etc. They will respond with your account holding status. If irregularities exist, you will be required to provide the Issuer or Transfer Agent with an Affidavit of Forgery or Fraud.
 
Q. Is training required to provide a Medallion Signature Guarantee?
A. Yes, each employee who is authorized to perform a Medallion Signature Guarantee must go through a training course and pass a test to become certified.