medallion signature guarantee vs notary

In the world of legal documents and financial transactions, there are two terms that are often used interchangeably, but they are not the same thing: Medallion Signature Guarantee and Notary. While both of these terms are used to verify the identity of the signer and ensure the authenticity of the signature, they are used in different contexts and have different levels of authority.

What is a Medallion Signature Guarantee?

A Medallion Signature Guarantee is a special type of signature guarantee that is typically used for financial transactions such as the transfer or sale of securities. This guarantee is provided by a financial institution that is a member of a Medallion Signature Guarantee program, such as the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), or the New York Stock Exchange Medallion Signature Program (MSP).

To obtain a medallion stamp, the signatory must have an account with the financial institution providing the guarantee, and the transaction must be related to that account. The signatory must provide proof of identity and ownership of the securities being transferred, and the financial institution will verify that the signature matches the one on file and that the transaction is valid.

Original Medallion Signature Guarantees are often required by financial institutions when transferring or selling securities, as they provide a high level of assurance that the transaction is legitimate.

This medallion signature guarantee is a unique stamp that commonly used in estate planning and other legal transactions where securities are involved. It verifies the authenticity of the signature authorising the transfer as well as the signer’s capacity and authorization to sign the document.

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What is a Notary?

A Notary, on the other hand, is a public official who is authorized to witness and certify signatures on legal documents. Notaries are typically appointed by the state government and are responsible for verifying the identity of the signatory and ensuring that the document is being signed voluntarily and without coercion.

Notaries can certify a wide range of legal documents, including wills, deeds, contracts, and powers of attorney. They are often used in real estate transactions, legal disputes, and other situations where a signature needs to be verified and certified by a neutral third party.

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Signature Guarantee vs Notary – What is the Difference Between a Notary and a Medallion Signature?

Medallion signature guarantee stamps are backed by bank assets and must go through a rigorous screening process that includes document verification. A notary stamp simply certifies the identity of the signer and is backed by a surety bond that protects the public rather than the notary. While both Medallion Signature Guarantees and Notaries are used to verify signatures and ensure the authenticity of legal documents, there are several key differences between the two.

Difference 1

First, Medallion Signature Guarantees are typically only used for financial transactions involving securities, while Notaries can certify a wide range of legal documents.

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Difference 2

Second, Medallion Signature Guarantees are provided by financial institutions that are members of a Medallion Signature Guarantee program, while Notaries are public officials who are appointed by the state government.

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Difference 3

Third, the level of authority provided by a Medallion Signature Guarantee is typically higher than that provided by a Notary. This is because Medallion Signature Guarantees are backed by the financial institution providing the guarantee, which assumes liability for any fraud or unauthorized transactions. Notaries, on the other hand, do not assume any liability for the accuracy or legality of the documents they certify.

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Difference 4

Fourth, the medallion signature guarantee requirements are often more stringent than those for obtaining a Notary. To obtain a Medallion Signature Guarantee, the signatory must have an account with the financial institution providing the guarantee, and the transaction must be related to that account. The signatory must also provide proof of identity and ownership of the securities being transferred. Notaries, on the other hand, typically require proof of identity but may not require proof of ownership or other documentation.

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Difference 5

Finally, Medallion Signature Guarantees are typically more expensive than Notary services. This is because the financial institution providing the guarantee assumes liability for the transaction and must have insurance to cover any losses. Notaries, on the other hand, do not assume any liability and are generally less expensive.

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How much does a Medallion Signature Guarantee Cost?

The cost for a medallion signature guarantee starts at $50 for a $100,000 guarantee from a credit union and goes up to $75 from a bank. If you are transferring $200,000 in stocks, bonds or other securities, for instance, you should expect to pay around $100 for the medallion signature guarantee cost. Due to the complex nature of the paperwork and liabilities involved in the transaction, this charge is required.

Conclusion

In summary, while both Medallion Signature Guarantees vs Notaries are used to verify signatures and ensure the authenticity of legal documents, they are used in different contexts and have different levels of authority. Medallion Signature Guarantees are typically used for financial transactions involving securities and are provided by financial institutions that are members of a Medallion Signature Guarantee program. Notaries, on the other hand, are public officials who are appointed by the state government and can certify a wide range of legal documents.

The level of authority provided by a Medallion Signature Guarantee is typically higher than that provided by a Notary because Medallion Signature Guarantees are backed by the financial institution providing the guarantee, which assumes liability for any fraud or unauthorized transactions. The requirements for obtaining a Medallion Signature Guarantee are often more stringent than those for obtaining a Notary, and Medallion Signature Guarantees are typically more expensive than Notary services.

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In conclusion, while both Medallion Signature Guarantees vs Notaries play a crucial role in verifying signatures and ensuring the authenticity of legal documents, it is important to understand the differences between the two and when each should be used. It is also important to work with reputable financial institutions and Notaries who follow best practices and adhere to state and federal laws and regulations to ensure the accuracy and legality of all transactions and certified documents.

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FAQs on Medallion Signature Guarantee vs Notary Stamp

What do I need to get a medallion stamp for signature guarantee?

To get a medallion stamp for signature guarantee, you need to have an account with a financial institution that participates in a medallion signature guarantee program, provide proof of identity, and have the transaction be related to that account.

What types of financial transactions require a medallion signature guarantee?

Financial transactions such as the transfer or sale of securities, including stocks, bonds, and mutual funds, typically require a medallion signature guarantee. It is used to ensure the authenticity of the signature and that the transaction is legitimate.

Is there an alternative to Medallion Signature Guarantee?

While there is no direct alternative to a Medallion Signature Guarantee, some financial institutions may accept a notarized signature as an alternative for certain transactions. However, this varies depending on the institution and the type of transaction.

When do I need a medallion signature guarantee instead of a notary?

A medallion signature guarantee is typically needed for financial transactions involving securities, such as the transfer or sale of stocks, bonds, or mutual funds. A notary is typically used for other types of legal documents such as affidavits or power of attorney.

How is a medallion signature guarantee different from a notary's seal and signature?

A Medallion Signature Guarantee is different from a notary's seal and signature in that it is typically used for financial transactions involving securities and is backed by a financial institution, while a notary's seal and signature is used for a wider range of legal documents.

Can a notary in USA provide medallion signature guarantee?

No, a notary in the USA cannot provide a medallion signature guarantee. Only financial institutions that are members of a medallion signature guarantee program can provide this type of guarantee for financial transactions involving securities.

How much does a medallion signature guarantee cost compared to a notary?

A Medallion Signature Guarantee is typically more expensive than a Notary because of the higher level of liability and requirements involved. The cost for a Medallion Signature Guarantee can range from $10 to $100, while a Notary service typically costs around $5 to $15.

How long does it take to obtain a medallion signature guarantee compared to a notarization?

The time it takes to obtain a Medallion Signature Guarantee compared to a notarization can vary depending on the financial institution and the type of transaction. Medallion Signature Guarantees typically require more documentation and may take longer to obtain than a Notarization.

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