The STAMP Program is administered by Kemark Financial Services, Inc. For inquiries and information on the program, including enrollment, please reach out to Kemark directly. 

ABOUT SECURITIES TRANSFER AGENTS MEDALLION PROGRAM (STAMP)

One of the cornerstones of the securities transfer function is the signature guarantee.  Without such a feature, the securities industry as we know it would function only with great difficulty and with significantly higher costs.  A guarantee of a person’s signature is required by all Transfer Agents before a security transfer can take place and SEC Rule 17Ad-15 requires that Transfer Agents adopt an equitable methodology for the acceptance of signature guarantees from eligible Guarantor institutions.  SEC Rule 17Ad-15’s stated purpose is to:

"…provide for the protection of investors; facilitate the equitable treatment of financial institutions which guarantee signatures of endorsers of securities; increase the efficiency of the security transfer process; and reduce the risk associated with a signature guarantor’s inability to meet its obligations."

The Securities Transfer Agents Medallion Program, Inc. (STAMP, Inc.) is a not-for-profit corporation that owns and, together with Kemark Financial Services, the STAMP Program Administrator, operates the official signature guarantee program that is recognized and approved by the financial industry and that is supported and endorsed by the Securities Transfer Association (STA).

The STAMP Program facilitates the equitable treatment of eligible Guarantor institutions and promotes the prompt, accurate, and safe transfer of securities by providing the Transfer Agent with protection against risk of financial loss if it has no recourse against the Guarantor.  Transfer Agents and others who rely on a signature guarantee from a member of STAMP are protected against loss from wrongful endorsements if the Guarantor is unwilling to meet, or is incapable of meeting, its financial obligation under its Program Indemnity Agreement.

Once a Guarantor joins the STAMP Program, it must acquire the necessary STAMP Medallion imprinting equipment and obtain Surety Bond coverage, which in many cases can be obtained at nominal cost from the Guarantor’s existing insurance carrier.

In addition, Program Procedures require that all Guarantors receive “certification” from the Program in accordance with strategies focused on individual employee “certification.”  Guarantor certification is achieved through prescribed training of relevant personnel, supported, in turn, by the availability of further online learning and assistance.

Guarantor certification has as its primary goal safety and soundness in the application of an institution’s Medallion imprint.  This goal is accomplished through a well developed awareness of the legal framework and issues, including potential Guarantor liability, when providing a signature guarantee in connection with the transfer of a security.   Certification training topics include:

• Section 8-306 of the Uniform Commercial Code.

• Proper and Improper Uses of the Medallion Stamp.

• STAMP Surety Bond.

• Medallion Signature Guarantee Best Practices; Know Your Customer.

• Best Control Practices; Safeguarding the Medallion Stamp.

• Medallion Stamp Imprinting and Verification.

If you are interested in joining the STAMP Medallion Signature Guarantee Program or you are already a participant and would like additional information concerning Certification or other educational materials, please contact Kemark Financial Services, Inc. at (845) 620-9300 or visit the Kemark website at www.kemark.com.

UNIVERSAL STAMP (U-STAMP)

The STA Board of Directors voted unanimously to endorse Universal STAMP's ("U-STAMP") migration from the pilot phase into an implementation one commencing October 1, 2025.  At that time, U-STAMP will become the fourth recognized medallion signature guarantee program.

U-STAMP Informational Video

STAMP AND MEDALLION CLAIMS PROCESSING

Through questions received from both Guarantors and Transfer Agents, we have found that claims processing guidelines are not well understood by the securities industry. This may be due – in large part – to the infrequent nature of these events. Nevertheless, we felt it worthwhile to revisit the topic as claims resolution is more efficient when all parties follow the recommended procedures.

The process usually begins when the Investor or the legal representative of the Investor makes an inquiry to the Transfer Agent seeking resolution for a claim, which may result in a loss, arising from a wrongful transfer.

The Uniform Commercial Code assigns liability to the Issuer of a Security, and, by extension, to the Transfer Agent, for the “wrongful registration of transfer if the Issuer has registered a transfer of a security to a person not entitled to it.” Indeed, it has been our experience that the process works best when the Transfer Agent is central to the resolution of an Investor’s claim. If the Transfer Agent suffers a loss by settling an Investor claim, the Transfer Agent would then seek reimbursement from a Guarantor under its Medallion Program Indemnity Agreement. The Medallion Program Indemnity Agreement, signed by all Medallion Guarantors, indemnifies the Transfer Agent against losses “arising out of or in connection with the transfer, payment, exchange, purchase or delivery of securities in reliance upon the [Guarantor’s] Imprint.”

Accordingly, the following guidelines or best practices are recommended should an incident occur:

• The Transfer Agent should confirm that an internal error has not been made.

• The Transfer Agent should provide the Investor with copies of the transfer and/or other relevant documents in question.

• If, upon review of the documents, the Investor is still certain that a fraudulent event has occurred, the Investor should complete an Affidavit of Forgery and any other documentation requested by the Transfer Agent to allow it to resolve the matter.

• Internal Transfer Agent legal resources should be notified.

• If it is determined that there is a loss and the loss resulted from the wrongful transfer of securities pursuant to a forged or otherwise ineffective endorsement, a “demand for indemnity” under the Medallion Program Indemnity Agreement should be made by the Transfer Agent upon the Guarantor. The Transfer Agent should provide the Guarantor with all documentation related to the item in question, including copies of the endorsement, the Medallion imprint, and the Affidavit of Forgery.

• Under the terms of the Medallion Program’s Application and Subscription Agreement, the Guarantor should acknowledge receipt of the demand in writing within three business days. Also, under the terms of the Medallion Program’s Application and Subscription Agreement, the Guarantor’s “failure to satisfy a demand within ten (10) business days after receipt” will constitute a default under the Indemnity Agreement, entitling the Transfer Agent to present the demand as a claim under the Guarantor’s Medallion Program Surety Bond.

• If Guarantor Surety Bond information is needed, the Transfer Agent can secure this information via a written request made to the Medallion Program Administrator.

• The Guarantor should deal with the demand for indemnity under its Indemnity Agreement according to predetermined internal procedures, which will likely involve legal and risk management resources and, possibly, other financial institution insurance.

• The Transfer Agent should maintain a dialogue with the Investor and the Guarantor or its Surety Company until settlement or resolution.
  
  

Obviously, the incidents and circumstances giving rise to claims vary. Both Guarantors and Transfer Agents have a mutual obligation to the Investor to resolve issues efficiently and expeditiously.

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