A Medallion signature is the guaranteed signature required before an owner of securities in the form of a physical certificate can sell or transfer them. The process of getting a Medallion signature helps to keep securities safe from being transferred illegitimately with a forged signature.
Transfer agents heavily suggest getting signature guarantees because then the agents are limited in liability in the event of a transfer done with a forged signature. Transfer agents may refuse to honor a signature guarantee done outside of a recognized Medallion Signature Guarantee program. There are three Medallion Signature Guarantee programs: the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program and the New York Stock Exchange Medallion Program.