OCP
Also written as: OCP — Optional Cash Purchase
Optional Cash Purchase — a feature of some dividend reinvestment plans that allows enrolled shareholders to purchase additional shares directly through the transfer agent with voluntary cash contributions, outside of dividend reinvestment.
Full Definition
An Optional Cash Purchase (OCP) facility, sometimes called a 'direct stock purchase' feature, allows DRIP participants or eligible investors to buy additional shares of the issuer through the transfer agent by sending in optional cash payments, typically subject to minimum and maximum investment limits set in the plan prospectus. OCP purchases may be made at market price or at a discount, depending on the plan terms. Editors must distinguish OCP from the core DRIP dividend reinvestment function, as plan prospectuses and shareholder communications address them as separate mechanisms with distinct procedures and pricing.
Usage
Usage note: Expand on first use. Distinguish from DRIP (which covers dividend reinvestment specifically) as the two features, while often co-administered, are legally separate plan components.
In Context
- "Plan participants may make OCP investments of between $50 and $10,000 per month." — DRIP plan prospectus
- "The OCP purchase price is calculated as the average of the high and low trading prices on the investment date." — DRIP plan terms and conditions