It’s a scenario more UK shareholders are running into: you go to sell or transfer shares you’ve held for years, only to be told the company was bought out by a US or Canadian firm a while back, and that you now need something called a Medallion Signature Guarantee before the transfer can go ahead. It sounds obscure, but it’s becoming a more common hurdle as cross-border takeovers of UK-listed companies continue.
A Medallion Signature Guarantee, or MSG, is a certification confirming that the signature authorising a securities transaction is genuine and that the person signing has the legal authority to do so. It’s required whenever UK, European or other overseas holders deal with US or Canadian securities, whether that’s selling shares, transferring them, or updating the name on the holding. Well-known examples include Cadbury, taken over by Kraft in 2010, and Vodafone’s sale of its Verizon Wireless stake to Verizon Communications in 2013 — both left UK shareholders needing an MSG to act on their holdings.
The catch for UK residents is that only members of a Medallion Signature Guarantee programme can actually issue one — typically banks, trust companies and brokers based in the US or Canada. That leaves people outside North America in a difficult spot, since most of their own bank or broker simply can’t provide the stamp, however well they know their customer.
It’s also worth knowing an MSG isn’t the same as a notarised document, and one can’t be substituted for the other. The difference comes down to liability: a firm issuing a Medallion Signature Guarantee is on the hook if the signature turns out to be forged, which is precisely why the process exists and why so few organisations outside North America are authorised to provide it.
Fraser and Fraser is one of the few firms in the UK holding its own Medallion Signature Guarantee stamp, able to certify transactions of up to US$1,000,000 for clients across the UK, Europe, Australia and New Zealand. If you’ve hit this hurdle while dealing with US or Canadian securities, visit medallionsignature.co.uk/ to find out what’s needed for your case.
