DSP
Also written as: DSP — Direct Stock Purchase Plan
Direct Stock Purchase Plan — a programme that allows investors to purchase shares of a company directly from the transfer agent or company, bypassing a traditional broker.
Full Definition
A Direct Stock Purchase Plan (DSP or DSPP) enables individual investors to buy shares directly from the issuing company or its designated transfer agent without using a broker-dealer. Unlike a DRIP, a DSP does not require the investor to already own shares in the company; it serves as an entry point for new investors. Purchases can typically be made via lump sum or automatic periodic investment. Transfer agents administer most DSPs on behalf of the issuer. Editors must distinguish DSP from DRIP: both are administered by the transfer agent, but they serve different purposes and investor profiles.
Usage
Usage note: Distinguish from DRIP (requires prior share ownership) and ESPP (employee benefit). Expand to 'Direct Stock Purchase Plan (DSP)' on first use. Some documents use 'DSPP' — verify the issuer's preferred abbreviation.
In Context
- "New investors may purchase their initial shares through the company's DSP without paying brokerage commissions." — Investor Relations Website Copy
- "The plan prospectus for the DSP must disclose the pricing methodology used to determine the purchase price on each investment date." — Plan Prospectus