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What is the Signature Guarantee Program? A Legal Overview
Definition & Meaning
The signature guarantee program is a system designed to protect investors by verifying the authenticity of signatures on documents related to securities transactions. This program was established in response to regulatory requirements under Rule 17 Ad-15 of the Securities Exchange Act of 1934. The U.S. Department of the Treasury recognizes specific programs as signature guarantee programs, including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchanges Medallion Program (SEMP), and the Medallion Signature Program (MSP) of the New York Stock Exchange.
Table of content
Legal Use & context
The signature guarantee program is commonly used in the context of securities transactions, where it serves as a safeguard against fraud. It is relevant in areas such as finance and investment law, particularly when transferring ownership of stocks, bonds, or other securities. Users may need to complete specific forms to obtain a signature guarantee, which can often be managed with legal templates provided by services like US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(hypothetical example) A person wishes to transfer ownership of their stock shares to a family member. To complete the transfer, they need a signature guarantee to ensure the transaction is legitimate. They visit their bank, which is authorized to provide signature guarantees, and present the necessary identification and documentation.
State-by-state differences
State
Signature Guarantee Program Variations
California
Signature guarantees are widely accepted and can be obtained from various financial institutions.
New York
Signature guarantees must be provided by institutions that are part of the Medallion Signature Program.
Texas
Signature guarantees are recognized, but specific requirements may vary by institution.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Signature Guarantee
A certification by a financial institution confirming the authenticity of a signature.
Notarization
A formal process where a notary public verifies the identity of a signer and witnesses the signing of a document.
Power of Attorney
A legal document allowing one person to act on behalf of another in legal or financial matters.
Common misunderstandings
What to do if this term applies to you
If you need a signature guarantee, first check with your bank or financial institution to see if they offer this service. Gather the necessary identification and documentation related to the transaction. If you prefer to handle the process yourself, consider exploring US Legal Forms for templates that can assist you in preparing the required forms. If your situation is complex, seeking professional legal advice may be beneficial.
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Typical fees for a signature guarantee may vary by institution.
Signature guarantees are generally accepted nationwide, but specific requirements may differ.
Failure to obtain a signature guarantee when required can delay or invalidate a transaction.
Key takeaways
Frequently asked questions
A signature guarantee is a certification by a financial institution that verifies the authenticity of a signature on a document.
Only authorized financial institutions, such as banks and credit unions, can provide signature guarantees.
No, a signature guarantee and notarization are different processes. Notarization involves a notary public witnessing a signature, while a signature guarantee verifies the signerâs identity and authority.