Did you know each Medallion Guarantee has a monetary limit, known as the Surety Limit. The Medallion Signature is a surety stamp and the value of the stock must be taken into account before the Company providing the stamp actually affixes the Medallion Guarantee.
The special Medallion Stamp itself has a code embedded and clearly visible on the Stamp. These codes are as follows:
- A – $1,000,000
- B – $750,000
- C – $500,000
- D – $250,000
- E – $100,000
- F – restricted for credit unions $100,000
- X – $2,000,000
- Y – $5,000,000
- Z – $14,000,000 ($10 million for Z prefix plus an additional $4 million of coverage for STA members)
What do the Medallion Guarantee limits mean?
The Medallion Stamp is affixed to any transfer document and
the value of the stock must not exceed the value or medallion limit shown here. If it does the Signature Guarantee is at risk. This can have an adverse affect, especially if the stock should rise. The company that affixes the stamp could become liable for any loss if they fix the stamp and the Medallion fails for any reason.
We have know some suppliers of the Medallion Guarantee supply multiple medallion stamps to various stock transfer forms if their limit is exceeded. Thus if their limit is $100,000 and the stock is valued at $160,000 then two medallion stamps would be affixed to separate transfer forms each for $80,000. This is perhaps not best practice.