The Medallion stamp is a form of signature guarantee used in financial transactions. It is an extra layer of authenticity and protection against forged signatures.
A Medallion stamp is most likely to be required when selling or trading securities. To transfer a securities certificate, it needs to be signed over to the new owner, similar to a car title. After it is signed, a financial institution that participates in the Medallion program authenticates the signature and places a stamp with special security features on the certificate. A signature guarantee limits the potential liability and losses of the receiving party if the signature is forged.