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Direct Purchase
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Direct Purchase Plans are established by companies to enable investors to purchase company shares without the intervention of a broker. Companies are willing to do this because they have found that Direct Purchase customers constitute a more stable shareholder base and are less likely to engage in active "day trading." In return, shareholders benefit because the cost of purchasing shares with Direct Purchase is significantly lower than with standard brokers.
How do Direct Purchase Plans differ from Dividend Reinvestment Plans?
Dividend Reinvestment Plans allow shareholders to direct their dividend proceeds toward the purchase of additional shares in the company without the intervention of a broker. Many companies also provide for Optional Cash programs whereby shareholders contribute their own funds toward the purchase of additional shares in the company, once again without the involvement of a broker. Direct Stock Purchase Plans differ from these plans in that you need not already be a shareholder in order to participate.
How do I enroll in a Direct Purchase Plan?
To enroll, select the company in which you are interested and verify that they offer an online plan. Then, select the Invest Now! option and you shall be guided through the share purchase process.
If I submit an order to purchase shares, at what point will I find out the exact price at which the order was executed?
Upon the submission of the share purchase order you will receive an immediate e-mail confirmation of your order as well as a subsequent one listing the exact price of the shares purchased.
Until now, the accepted practice has been for Direct Purchase programs to aggregate all purchase orders submitted over the course of a week and to execute them all at once. Needless to say, such a process introduces a fair degree of uncertainty to the process and likely dissuades many potential investors from participating in the program. American Stock Transfer & Trust Company is proud to offer the first Direct Purchase program featuring daily stock purchases. Orders submitted by 4:00 p.m. will, in ordinary circumstances, be executed no later than the following business day.
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