R590-178-4. Use of Book-Entry Systems

A custodian may utilize a clearing corporation to clear and transfer securities when depositing or arranging for the deposit of securities held in or purchased for a domestic insurance company's general account or its separate accounts. When a clearing corporation is used to clear and transfer securities, securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of such clearing corporation regardless of the ownership of such securities and securities of small denominations may be merged into larger denominations. The records of any custodian utilizing a clearing corporation to clear and transfer securities shall at all times show that such securities are held for such insurance company and for which accounts thereof. Ownership of, and other interest in, such securities may be transferred by bookkeeping entry on the books of such clearing corporation without physical delivery of certificates representing such securities.