What is a Direct Purchase Program?
A direct purchasing program is a program designed by companies to make available stock for sale to the general public directly, without going through a broker. It is considered one of the easiest ways to get involved in the buying of stocks because there is usually no minimum purchase or broker fees. However, there may be some small setup fees in establishing an account. At first, those interested in a direct purchasing program had to look for a public utility as these were the only types of companies able to offer such a program. However, rule changes by the Securities and Exchange Commission (SEC) in the 1990s led to the growth of direct purchasing programs among other companies. Today, there are thousands of companies which offer a direct purchasing program. A direct purchasing program is similar to a dividend reinvestment plan. However, in a dividend reinvestment plan, investors must already own stock in the company. With a direct purchasing program, no previous ownership is necess
