Business, Legal & Accounting Glossary
A SEC-regulated program which enables a company to sell shares of stock directly to investors, rather than through a broker, enabling the investors to avoid paying a commission. Direct purchase programs are a good way to invest small amounts since you don’t even have to be a current shareholder in order to purchase the shares. The company will not charge you a commission, but they may charge you a small fee in order to set up a stock purchase account.
A direct purchase program allows an investor to buy stock directly from a company, without using a broker. In order for a company to offer a direct purchase program, it must register its intent with the SEC, which means that not every company offers a direct purchase program to the public. Using a direct purchase program investors eliminate broker’s commissions and, in fact, by using a direct purchase program an investor does not need to have a brokerage account at all. Investors are also able to more easily purchase odd lots and small numbers of shares (often as few as a single share) through a direct purchase program. A direct purchase program may also be called a Direct Stock Purchase Plan (or a DSP).
Direct Stock Purchase Plan
DSP
no-load stock
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This glossary post was last updated: 29th October, 2021 | 0 Views.