All securities delivered by a customer or another broker dealer must be in good condition and must:

  • Be signed by all owners and all owners must be alive
  • Be in the correct denominations, i.e. number of shares or par value of bonds
  • Have all attachments
  • Be accompanied by a uniform delivery ticket

The owner of a security must endorse the certificate at the time of sale to ensure its negotiability or may sign a stock or bond power also known as a power of substitution.

The stock power, when attached to the certificate, will make it negotiable and includes an irrevocable power of attorney. All signatures must be accepted by the transfer agent. To ensure that the transfer agent accepts the signatures on certificates delivered by NYSE member firms, the NYSE started the Medallion Signature Guarantee Program, which allows NYSE members to stamp the certificates with a medallion rather than sign them. This stamp ensures that the transfer agent will accept the certificates for transfer and provides indemnification insurance for fraud. The Medallion Program members pay a fee to participate in this program.

Examples of invalid signatures are:

  • The signature of a minor
  • The signature of a deceased person
  • The signature of only one owner if jointly registered
  • A forged signature



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