direct stock purchase plan


Also found in: Acronyms.

Direct Stock-Purchase Program

A plan in which a publicly-traded company allows an investor to buy stock directly from the company rather than through a broker-dealer. Some companies offer direct stock purchase plans to raise financing at less expense to the investor (mainly through not charging commissions or fees). Some advisers recommend that first-time investors use direct stock purchase plans because of the reduced cost. It should not be confused with an employee stock option plan because direct stock purchase plans are open to anyone.

direct stock purchase plan

A plan initiated by some firms that permits investors to purchase stock directly from the issuer (thereby avoiding brokerage commissions). Although generally open only to employees and current shareholders, an increasing number of companies allow nonstockholders to make direct purchases.
References in periodicals archive ?
Tricon Global Restaurants, which owns KFC, Pizza Hut, and Taco Bell and operates more than 30,000 restaurants, filed an S3 shelf registration with the SEC in September 2000 for a direct stock purchase plan called Yum Direct.
Direct stock purchase plans typically have more features than dividend reinvestment plans.
com, which offers free research on the 1,600 companies that offer DRIPs and direct stock purchase plans.
You can participate in direct stock purchase plans (DSPPs), or dividend reinvestment plans (DRIPs).
To avoid paying broker fees, you can buy high-quality equities through direct stock purchase plans (DSPs) or dividend reinvestment plans (DRIPs), in which you buy stocks directly from a public company.
For years, cost-conscious individual investors who balked at paying brokers' fees to buy stocks have propelled the growth of direct stock purchase plans, called DSPs.