No wonder people buy foreign stocks and leave it under the custody of their financial institution or broker. Computershare lodged all the Apple stocks in our names incorrectly and it has been a long saga trying to correct the mistake.
We are still receiving correspondence from the U.S. by post. Snail mail, in this technological world. I contact our broker, our broker contacts Computershare in the U.S. and then we wait four to eight weeks before we get our documents in Sydney. It's a long protracted and torturous process. It would be easy to leave it under the custody of our broker but then having to read sixty pages of fine print from the broker is also a long and arduous process of due diligence.
I thought it was prudent to register the Apple stocks that we bought under our direct name rather than custody of the financial brokerage institution after the financial crises of 2008 resulted in many banks and brokers collapsing. Those who had margin loans collateralised to their stock portfolio in Australia, meant that they lost all their stocks including the ones that were fully owned when the brokerage company collapsed. It's really important that everyone reads the fine print and the terms and conditions.
To transfer the stock to different owners, we needed to
1. Complete the transfer request form and have the signatures authorised with a Medallion Signature Guarantee
2. Complete the Form W-9 for tax certification(to prevent backup withholding tax)
3. Post the documents to Computershare in the U.S.
What is a Medallion Signature Guarantee?
Computershare's definition is, 'A Medallion Signature Guarantee is a special stamp provided by a bank, broker or credit union (guarantor institutions) that indicates that the individual signing a form is legally authorised to conduct the requested transaction. The guarantor institution should verify the medallion stamp is sufficient to cover the value of assets being transacted upon.'
The Medallion Signature Guarantee can be provided by a qualified financial institution such as a 'commercial bank, savings bank, savings and loan, US stockbroker and security dealer, or credit union, that is participating in an approved Medallion Signature Guarantee Program'.
Residents of the United States who own less than $10,000 in total account value can utilise the Medallion Waiver option. For us, those waiver options are not applicable.
What is the purpose of the Medallion Signature Guarantee?
It's designed to protect shareholders by making it difficult for people to take assets by signature forgery on security certificates for related transfers or sales documents.
Who can provide a Medallion Signature Guarantee in Australia?
Good question >.< After researching on the net, I know plenty of institutions DON'T provide the Medallion Signature Guarantee in Sydney. From the US Embassy in Canberra, 'U.S. Consular Officers are not authorised to provide signature guarantee/medallion stamp guarantee service. Only a financial institution participating in the SEC (Securities Exchange Commission) medallion signature guarantee program is authorised to affix a medallion imprint.'
Computershare Australia supposedly offers the Medallion Signature Guarantee service but currently I don't know because I have rang their contact line twice only to be greeted with an automated voice service which diverted my call only to disconnect my call twice. A poster on the AussieStockForum posted that Computershare Australia offers the service for a small admin fee.
The posters in that forum wrote in 2014 that they tried asking U.S. branches of credit unions and banks to no avail.
Further research led to P&G shareholders requiring Medallion Signature Guarantees and they were advised to seek a local financial institution that has a correspondent replationship with a U.S. Medallion Program member with whom the investor has a business relationship as that firm may be a source of a Medallion Signature Guarantee
If Medallion Signature Guarantees Can't be Obtained
If Medallion Guarantees couldn't be obtained, Computershare was also accepting signature guarantees from:
* The U.S. Consulate
* A Non-U.S. Bank when it has one of the following:
- A New York Correspondent bank referenced in the foreign bank's guarantee stamp
- An overseas branch of a United States Bank or a member firm of the New York Stock Exchange referenced in the foreign bank's guarantee stamp
- A correspondent branch in the United States, which is referenced in the foreign bank's guarantee stamp
* A Computershare office located in either the UK or Australia accompanying the appropriate Computershare transfer form and a valid passport as long as the value of the transaction is less than $100,000 USD
Seeing as it has been a drama, I hope this helps some poor soul in Australia from having to go through the same process of having to research the web only to find a smattering of the above same information scattered across several web pages and assorted links. I have now compiled it all in one post for you.