Agenda Item   



                                                                                                                        ASR Control  23-000997




legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Treasurer-Tax Collector   (Approved)

Department contact person(s):

Shari L. Freidenrich (714) 834-7625 



Dana Schultz (714) 834-3514



Subject:  Approve Treasurer to Provide Medallion Signature Guarantee Services to County


      ceo CONCUR

County Counsel Review

Clerk of the Board






3 Votes Board Majority




    Budgeted: Yes

Current Year Cost:   $4,500

Annual Cost: FY 2023-24 $4,500
FY 2024-25 $4,500
FY 2025-26 $4,500
FY 2026-27 $4,500




    Staffing Impact:


# of Positions:            

Sole Source:   No

    Current Fiscal Year Revenue: N/A

   Funding Source:     See Financial Impact Section

County Audit in last 3 years: No

   Levine Act Review Completed: N/A


    Prior Board Action:         N/A






Authorize the continuance of the Medallion Signature Guarantee Program, with Kemark Financial Services, Inc. to remain a Securities Transfer Agents Medallion Program guarantor for a subscription fee of $895 in FY 2023-24 and annually for the next five years and re-designate the Treasurer-Tax Collector as the Securities Transfer Agents Medallion Program Administrator and authorize the Treasurer-Tax Collector to execute any agreements and any documents associated with this program during this five year period.



Authorize the Manager of CEO/Risk Management to annually obtain a Surety in compliance with the requirements of the Subscription agreement and the Treasurer-Tax Collector.



Authorize the Treasurer-Tax Collector to provide Medallion Signature Guarantee services in accordance with the terms of the agreement only to County Departments on official County documents that require a Medallion Signature Guarantee.




Authorize County Agencies and Departments utilizing the Medallion Guarantee services to recover up to actual costs when appropriate, subject to Auditor-Controller review and in accordance with State and County laws and policies.







Authorization of continued use of this banking program will allow authorized officials to transfer securities either donated to the County or transferred as part of estates or heirs as part of fiduciary requirements in a timely and efficient manner.






The Board authorized the Treasurer to implement this program in 2017 with Kemark Financial Services, Inc. (Kemark), who is one of three providers of a Medallion Signature Guarantee program. The program is known as the Securities Transfer Agents Medallion Program (STAMP) and is administered by Kemark based in Florida.  It includes more than 7,000 US and Canadian Financial institutions. Under the program, there are costs for the subscription, certain equipment and a surety bond. This contract does not include subcontractors or pass through to other providers. See Attachment B for Contract Summary Form.


The Treasurer-Tax Collector (Treasurer) is required to obtain a medallion signature guarantee when the County receives donated stock/bonds from individuals or companies and is required to sell the stock/bonds upon receipt. In addition, the Public Administrator and Public Guardian may need to sell stock/bonds as part of their fiduciary responsibilities to their clients and also are required to obtain a Medallion Signature Guarantee to transfer the securities. Finally, the Treasurer needs a Medallion Signature Guarantee when purchasing US Treasury Securities under the State and Local Government Series program.


Medallion Guarantee Stamp

A Medallion Signature Guarantee is a special stamp that indicates that the individual(s) signing a form has the legal authority and capacity to conduct the requested transaction and verifies the authenticity of the signature. The Medallion Signature Guarantee Stamp guarantees that the individual signing the document is either the rightful owner of the security, or they have the legal authority and capacity to conduct the requested transaction. An authorized official will sign the Medallion Stamp with their name and title printed beneath their signature. The verification is a guarantee that the signature is genuine and the guarantor accepts liability for any forgery. To protect again fraudulent signatures, certain legal documentation is required be produced. The transfer of securities such as stocks, bonds, options and other financial instruments generally requires this special signature verification. This special signature verification is currently generally done by financial institutions as part of their banking operations.


As the County Program Administrator, the Treasurer will perform due diligence on each medallion signature request and provide the medallion signature guarantee stamp only to County departments and agencies needing it to complete a securities transfer or signature guarantee. The Treasurer will have County Counsel review the documents each time to ensure that the person has the legal capacity to sign prior to stamping and signing the form.    There have been 13 medallion stamps signatures that have been processed under the program since inception.  The majority of these have been for the Public Administrator.  This program enables them to efficiently transfer securities from a decedent’s name to the estate name once the Public Administrator is court appointed for the probate process. 



Program Costs

The costs are minimal for the program and consist of the cost of the surety bond, the annual STAMP subscription cost, and any training or education costs, which are estimated to be less than $4,500 annually.


Non-Standard Indemnification Clause 

The agreement previously signed upon the implementation of this program is a standard agreement provided by Kemark for these services. There are no new documents required to be signed to continue this program, it only requires a surety bond and payment of the annual subscription fee.  The terms and conditions in the agreement signed deviate from the County’s standard terms and conditions including indemnification provided to another party and the limitation of liability.  Risk Management and County Counsel have reviewed the agreement and determined that Board approval is required. Their concern is that the liability to the County should the Stamp be used inappropriately and the very broad indemnity language in favor of the issuer of the Surety bond pose increased risk to the County as compared to the County’s standard indemnity agreement where no such indemnity is provided. However, there are two major factors included in the recommendations that limit and mitigate the County’s liability risk under the Kemark Indemnification clause:



The limiting of the provision of Medallion Signature Guarantee Services by the Treasurer to only County Departments, and;



The review and update as needed by the Treasurer of the written policies and procedures for use, custody and safekeeping of the Medallion Signature Guarantee Stamp.


These actions, in conjunction with the Treasurer’s due diligence and requiring a County Counsel review of the subject documents to ensure that the person has the legal capacity to sign prior to stamping and signing the form significantly limit the County’s risk. We believe due to the limited risk and the benefits that will be received, it is in the County’s best interest to approve the agreement.


Other Benefits

Maintaining the Medallion program solves security transfer issues that exist statewide for Public Administrators and Treasurers in other counties. The County of Orange, with Board approval in 2017, was the first government agency to receive approval to join the program and other counties, including the Los Angeles County Treasurer have now been approved by Kemark to join the program.






Appropriations are included in the Treasurer FY 2023-24 Adopted Budget and will be included in the budgeting process for future years. The Treasurer is fully reimbursed for the costs by billing the appropriate agency or department for their time and can absorb the cost with no net county cost impact. The specific agency or department will accordingly bill the third party as part of their fiduciary duty.