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

 



Introduction

Related Articles
  1. Investing

    Medallion Financial: NYC Loans Come Under Fire (TAXI)

    New York City was supposed to be the stronghold of the taxi industry. Yellow cabs are ubiquitous, an inexpensive and familiar way to traverse the concrete jungle.  Medallion Financial (NASDAQ: ...
  2. Investing

    Old Stock Certificates: Lost Treasure Or Wallpaper?

    What if you've discovered some old shares in bearer form? Follow our tips and find out what they're worth.
  3. Investing

    Is Medallion Financial's Dividend Safe? (TAXI)

    Medallion Financial (NASDAQ: TAXI) specializes in providing loans for taxicab medallions, but also underwrites small business loans. Recently, medallion values have been decreasing, which could ...
  4. Insights

    Signature Bank Expands Client Banking Teams (SBNY)

    New York-based Signature Bank enhanced its private client banking network with the addition of three veteran bankers.
  5. Investing

    Old Stock Certificates: Lost Treasure?

    Today, most stocks reside electronically in a broker’s computer. But it is possible to stumble across a physical stock certificate.
  6. Retirement

    Don't Give Away Control Over Your Assets Without Planning

    Most people don't realize what they agreed to when they signed a power of attorney, and are blissfully unaware of the possible harm from poor planning.
  7. Insights

    How NYC's Yellow Cab Works and Makes Money

    Owning a New York City cab can be a great low-risk investment if you can afford the cost of a medallion.
  8. Investing

    The 4 Ways To Buy And Sell Securities

    Know the four main avenues of buying and selling investment instruments.
  9. Managing Wealth

    5 Reasons Small Business Owners Sell Their Companies

    Selling a business you've built from scratch isn't done lightly. Consider these moments when the opportunity might be right for you.
  10. Personal Finance

    Understanding Endorsements

    In financial terminology, endorsement has a couple of different meanings.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center