A Medallion Signature Guarantee, has what it known as a Surety Limit. This is the maximum amount of money that can be used. How much the stock is worth must be calculated, before the stamp provider can secure the Medallion Signature. It must be able to cover all of the transferable security.
A Medallion Stamp will have a code specifically for the monetary value. The prefixes are A,B,C,D,E,F,X,Y and Z, stretching from 100 thousand to 10 million dollars depending on the company.
A transfer document has the Medallion Stamp secured to it, but the stock value can not go above the limit of the medallion. It can be risky for the Signature Guarantee, particularly if there is a chance of the stock rising. Whoever has the stamp affixed, could be responsible for any potential losses, if there are any faults with the Medallion.
Although it may feel like an inconvenience to have to get a Medallion Signature, it is a safe way to allow genuine bonds and securities to be transferred or sold, so it is definitely worth it.
