Direct purchase plan


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Direct Purchase Plan

A plan that enables interested first-time individual investors to purchase a company's stock directly from the company or without the direct intervention of a broker. The administrator also ensures the safekeeping of the shares by registering them directly on the books of the company. Eliminates the need for shareholders to hold on to physical certificates.

Direct purchase plan (DPP).

Some publicly held companies offer a direct purchase plan that lets you purchase their stock directly without using a broker.

You may pay a small commission or transaction fee -- smaller than if you purchased the shares through a retail broker -- although some DPPs charge no fee at all.

Direct purchase plans are similar to dividend reinvestment plans, or DRIPs, with the added benefit that you can make the initial purchase of the company's stock through the plan rather than having to purchase stock first, through a broker, in order to be eligible for a DRIP.

It's easy to open a DPP account, and because it lets you purchase fractional shares of the company's stock, you can decide whether to invest a lump sum or make small, regular purchases on a set schedule to build your investment. Your shares are registered on the company's books, and you can sell your shares through the plan as well.

References in periodicals archive ?
Direct purchase plans will appeal to many, especially the ``information and financial elite who prefer to do it themselves.
Sometimes referred to as "no-load stocks," direct purchase plans are offered by 100 U.
Equity services offered through the Corporate Trust group of Wachovia Bank include stock transfer services, dividend reinvestment plans, employee stock purchase plans, stock option and restricted security plan administration, direct purchase plans, turnkey initial public offering services, corporate action processing and investment management.
They have what's called Direct Purchase Plans (DPPs) that let the general public purchase shares of their companies' stock without any fees.
In addition, an exhibitors showcase will provide attendees with information on direct purchase plans, dividend reinvestment programs, annual reports and further knowledge about the companies' products and services.