You finally found a bank willing to provide a Medallion Signature Guarantee. You have the transfer paperwork, identification and account statements, and the person at the branch even knows what a Medallion stamp is.
Then someone asks how much the securities are worth.
That is not idle curiosity. Every Medallion Signature Guarantee has a financial limit, and a guarantee that is too small for the transaction can be rejected even if everything else about the paperwork is correct.
The limit is identified by a letter embedded in the Medallion stamp. A D-prefix guarantee, for example, covers transactions up to $250,000. If you are transferring $400,000 of stock, that stamp is not enough.
For investors dealing with inherited shares, old stock certificates, trusts or large direct-registration positions, this can be the difference between getting the paperwork processed and starting over.
Medallion Signature Guarantee Limits at a Glance
| Stamp Prefix | Maximum Transaction Value |
|---|---|
| E | $100,000 |
| F | $100,000 — credit unions |
| D | $250,000 |
| C | $500,000 |
| B | $750,000 |
| A | $1,000,000 |
| X | $2,000,000 |
| Y | $5,000,000 |
| Z | $10,000,000 |
These are liability limits per transaction associated with the Medallion program. Fidelity Institutional, for example, publishes this same prefix schedule in its current signature-guarantee guidance.
You can see Fidelity’s current chart here: Fidelity Medallion Signature Guarantee information.
What Does the Letter on a Medallion Stamp Actually Mean?
A Medallion Signature Guarantee is not merely an elaborate form of identification. The financial institution providing it is accepting potential liability associated with the signature it guarantees.
The prefix tells the transfer agent the maximum transaction value covered by that guarantee. An E stamp covers up to $100,000, while an X stamp covers up to $2 million. The higher the prefix level, the greater the potential liability being undertaken by the guarantor.
This is one reason banks can become much more cautious as transaction values increase. The employee is not simply deciding whether your driver’s license looks legitimate. The institution is deciding whether it is comfortable financially standing behind the transfer.
If you need the broader explanation first, see our guide to what a Medallion Signature Guarantee is and why securities transfers sometimes require one.
A $400,000 Transfer Needs More Than a D Stamp
Suppose you inherited 4,000 shares of a stock currently trading at $100. The position is worth approximately $400,000, and the transfer agent requires a Medallion Signature Guarantee to move the shares into your brokerage account.
A bank employee with a D-prefix stamp can guarantee transactions only up to $250,000. That employee may be perfectly authorized to provide Medallion guarantees, and the bank may have no problem with you as a customer, but that particular guarantee does not cover your transaction.
You would need at least a C-level guarantee, which covers transactions through $500,000.
This is why one of the questions I recommend asking before making a Medallion appointment is: “What is the maximum transaction value you can guarantee?”
Otherwise, you can spend an hour assembling documents and driving to the branch only to discover that the stamp available there is not large enough.
The Stamp Limit Is Not Necessarily the Bank’s Limit
This is the most important practical wrinkle.
If a bank has access to an A-prefix Medallion stamp, the stamp itself may cover a transaction up to $1 million. That does not mean the bank has promised to guarantee every qualifying customer’s $1 million securities transfer.
The financial institution can impose its own rules that are more restrictive than the Medallion program’s maximum coverage. It may limit guarantees based on the customer’s relationship, transaction type, assets involved, documentation, branch authority or the institution’s own risk policies.
In other words, there are really two questions:
- Is the Medallion stamp large enough to cover the transaction?
- Is the financial institution willing to use it for your transaction?
You need the answer to both to be yes.
Why Does the Bank Care About the Value?
The financial consequences of guaranteeing a fraudulent $5,000 stock transfer are obviously different from those of guaranteeing a fraudulent $5 million transfer.
A Medallion guarantor is making representations about the genuineness of the signature and the authority of the person signing. The guarantee system exists so transfer agents can rely on participating financial institutions rather than independently investigating every person who submits stock-transfer paperwork.
The dollar limit puts a ceiling on the guarantor’s exposure under that particular guarantee. That is why the prefix is part of the stamp rather than an obscure internal detail that only the bank sees.
How Is the Value of the Transaction Determined?
For publicly traded securities, you should expect the current market value of the shares being transferred to matter. If you are transferring 10,000 shares, the bank is not going to rely on what the position was worth three years ago when you inherited it.
This can create an awkward situation with volatile stocks. A position worth $480,000 one week may be worth more than $500,000 by the time the paperwork reaches the transfer agent.
If your transaction is close to a Medallion limit, tell both the guarantor and the receiving transfer agent. Do not assume that squeezing under the limit by a few hundred dollars on the day you visit the bank guarantees that the paperwork will be accepted later.
The institution processing the transaction can tell you how it determines the applicable value and what documentation it wants.
What If the Stock Price Moves After the Stamp Is Applied?
This is worth thinking about when a position is close to the guarantee limit. Securities prices move, sometimes substantially, between the day paperwork is signed and the day a transfer is processed.
If you are trying to transfer approximately $495,000 of a volatile stock with a C-prefix guarantee that tops out at $500,000, I would not treat the $5,000 cushion as comfortably solved.
Ask the transfer agent how value is determined for its purposes and ask the guarantor whether a higher guarantee level is available. A slightly higher prefix can eliminate an avoidable source of rejection.
What If Your Transfer Exceeds $1 Million?
The prefix system does not stop at A.
An X guarantee covers transactions through $2 million, Y through $5 million and Z through $10 million. Those higher levels exist precisely because securities transfers can involve very large positions.
The practical problem is finding an institution willing and able to provide one. Your neighborhood bank branch may offer Medallion guarantees but have neither the authority nor the risk appetite to handle a multimillion-dollar transaction.
For a large transfer, I would begin with a brokerage firm, private-bank relationship or other financial institution that already has a substantial relationship with you and understands the assets involved. Tell them the approximate value immediately rather than making a generic request for “a Medallion stamp.”
Is the Z Limit $10 Million or $14 Million?
You may encounter both numbers online.
Current institutional guidance commonly lists the Z-prefix transaction limit at $10 million. Fidelity Institutional, for example, publishes $10 million as the Z-level transaction limit.
Some explanations of the Medallion system mention an additional $4 million of protection associated with Securities Transfer Association membership and describe the highest coverage as $14 million. That should not be interpreted casually as meaning every Z-prefix stamp can simply be used for any $14 million securities transfer.
If you are dealing with anything remotely close to these amounts, internet charts should no longer be your operating procedure. Confirm the required guarantee directly with the transfer agent and the institution providing the Medallion.
Can You Use Two Smaller Medallion Guarantees?
You may find suggestions online that a large transfer can simply be divided into several smaller transfers, each covered by a separate Medallion guarantee. In some circumstances a transaction can indeed be structured in separate pieces, but I would not assume that multiple stamps automatically solve a coverage problem.
The transfer agent controls what documentation it will accept, and the guarantor has to be willing to guarantee each transaction. Artificially splitting paperwork solely to fit under a stamp limit without discussing it with the parties involved is an excellent way to create more paperwork without necessarily solving anything.
If your transaction exceeds the available guarantee, call the transfer agent and ask how it wants the transfer handled.
What If Your Bank Says the Transaction Is Too Large?
First find out what kind of limit you hit. Ask whether the problem is the Medallion stamp’s surety limit, the particular branch’s authority or an internal bank policy.
If another branch or a centralized Medallion department has a higher level of authority, the same institution may still be able to help. If not, try a brokerage or another institution where you already have an established financial relationship.
Bank of America’s current Medallion process provides a good example of how centralized this service can be. Most requests involving outside securities are reviewed by a Medallion specialist rather than simply stamped at the teller counter, and the bank says complex cases can require several business days.
Its current requirements are available here: Bank of America Medallion Signature Guarantee.
For more options, see our guide to where to get a Medallion Signature Guarantee when your bank says no.
Do Small Transfers Have Different Rules?
A low transaction value does not automatically eliminate the requirement for a Medallion guarantee, but some financial institutions and transfer agents have exceptions or alternative procedures for smaller transactions.
Fidelity provides a useful example. Its current instructions for certain gifts of securities say a signature guarantee is required only when the gift is worth $10,000 or more. That is Fidelity’s rule for that particular transaction, not a universal $10,000 Medallion exemption.
Equiniti offers another example. It currently publishes a Medallion-waiver procedure for qualifying U.S. transfers worth $10,000 or less, although the waiver itself carries a fee: $100 for transfers below $5,000 and $200 for transfers from $5,000 through $10,000.
These exceptions are useful because obtaining a $100,000-capacity Medallion guarantee to move $300 worth of inherited stock can be economically ridiculous. Before spending hundreds of dollars on a specialized service, ask the transfer agent whether a low-value waiver or alternative procedure exists.
A Higher Prefix Does Not Mean a “Better” Medallion Guarantee
There is no reason to seek a $5 million Y-prefix stamp for a $50,000 transfer simply because it sounds more impressive. The guarantee needs to provide enough coverage for the transaction.
The letters are not grades of authenticity or quality. A properly issued E-prefix Medallion is entirely adequate for a qualifying $50,000 transfer even though it would be useless for a $500,000 transfer.
The right level is simply one whose limit comfortably covers the transaction and that the receiving institution will accept.
What to Ask Before Your Medallion Appointment
Once you know the value matters, the phone call becomes much more productive. Instead of asking only whether the bank “does Medallions,” give the employee enough information to tell you whether the trip is worth making.
I would say something like:
I need a Medallion Signature Guarantee for a securities transfer worth approximately $______. Does your institution provide guarantees for transactions of that size, and is this branch able to handle it? What documentation should I bring?
That gives the bank three important pieces of information immediately: you know you need a Medallion rather than a notary, you know this is a securities transfer, and you are telling it the approximate financial exposure before anyone schedules an appointment.
Bottom Line
Every Medallion Signature Guarantee has a dollar limit, and the letter prefix on the stamp tells the transfer agent the maximum transaction value it can cover. The commonly published limits currently run from $100,000 for E and F guarantees through $10 million for a Z guarantee.
But the prefix is only the first limit you need to clear. Your bank, brokerage or credit union can impose stricter internal limits or decline a transaction even when its Medallion stamp theoretically has enough coverage.
So before you gather documents and head to the branch, know approximately what the securities are worth and ask whether the institution can guarantee a transaction of that size. It is a much better question than simply asking whether someone in the building owns a green stamp.