Medallion Signature Guarantee that an authorized signature to transfer securities is authentic. To provide a Medallion signature guarantee, an institution must be a member of one of three Medallion Signature Guarantee Programs. Each program has its own requirements as to what signatures must be on the transfer documents, who must complete them and from where the documents are obtained.An authorized signature to transfer securities is the official eye-print of a bank or broker, a unique physical method of identification that allows for the timely execution of securities transactions. A perfect market for Medallion signature guarantees is the secondary capital market as it enables investors to identify entities that have been tested by industry experts, evaluated and judged through rigorous processes, will not cause systemic risk to the financial system and are compliant with applicable laws and regulations.A guarantee, or Medallion signature guarantee, from a third party is a way for a network of banks to prove the authenticity of an electronic signature to transfer securities. All three types of Medallion signature guarantee programs were created with the same purpose in mind: authenticating those who are providing transfers of stocks and bonds.
