Erasure Guarantee

DEFINITION of 'Erasure Guarantee'

A guarantee made by accredited institutions assuring the legitimacy and accuracy of changes made to bonds and securities. Erasure guarantees are used often in transferring securities. When an owner presents physical notes or share certificates as proof of ownership, special care is taken to ensure these documents are free of any corrections or erasures, particularly when significant sums of money are involved.

BREAKING DOWN 'Erasure Guarantee'

Banks and transfer agents for these securities may require an erasure guarantee, if there are any erasures or corrections on the document, to protect themselves against future claims if in the future it is determined that fraud has occurred. An erasure guarantee is similar to a document being witnessed by a notary public and typically takes the form of a medallion signature guarantee affixed to the erasure.

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RELATED FAQS
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    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
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    Understand what a bank guarantee is and what a bond is, and which one is a debt instrument. Learn the differences between ... Read Answer >>
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    Read about the differences between a traditional bank loan and a bank guarantee, and why a third party might require a guarantee ... Read Answer >>
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