In a first for the UK, US authorities have given the go-ahead for a UK based company to issue fast track medallion signature guarantees to personal representatives when transferring ownership of US listed shares.
Until now, UK personal representatives were required to clear security checks in the US and obtain a medallion signature guarantee from America, before shares could be legally transferred to a new owner.
Following a rigorous six month vetting process by US authorities, legal services firm, Title Research, has been granted a medallion guarantee, allowing the company to fast track their existing service for share transfers, without the need for clearance by a US bank. Title Research specialises in the repatriation, sale and transfer of overseas assets around the world.
The new medallion signature guarantee scheme will benefit tens of thousands of UK estates that hold popular US listed shares in companies such as Kraft Foods, Dr Pepper Snapple (previously Cadbury Schweppes) and IBM.
Title Research has been granted approval to join the Securities Transfer Agents Medallion Programme (STAMP) joining the ranks of major US banks. STAMP has been developed in partnership with the US Securities and Exchange Commission.
Prior to Title Research joining the programme, only US and Canadian financial institutions were granted membership of STAMP.
Andrea Pierce TEP, Legal Services Director at Title Research said: “Sending legal documents on a round trip to the US can often complicate and delay the administration of an estate. We wanted to find a way of making it far easier for trust and estate practitioners to transfer ownership of US shares. We can now issue the medallion guarantee in a matter of days rather than weeks.”
Tens of thousands of UK investors hold US listed shares. Many bought stock in popular UK companies that were subsequently acquired by US firms. Cadbury Schweppes had 57,000 UK shareholders in 2007 prior to being split into two separate entities, the UK listed Cadbury PLC and the US listed Dr Pepper Snapple Group. By 2012, Cadbury PLC shares were also listed in the US, after Cadbury was acquired by Kraft Foods.
Medallion signature guarantees significantly reduce the risk of fraud. As a requirement of issuing the medallion guarantee, strict identity checks are carried out. The medallion guarantee stamp has overt and covert security features to combat counterfeiting: including the visible green pigment, exclusive barcode, and invisible ink, that is only detectable using special readers held at share registrars. The ink is held by the official STAMP administrators and only made available to approved members of the Securities Transfer Agents Medallion Programme.
