2006 New York Code - Asset-backed securities

 
  § 11-A-4.15 Asset-backed securities
    (a)  In  this  section,  "asset-backed  security" means an asset whose
  value  is  based  upon  the  right  it  gives  the  owner   to   receive
  distributions  from  the  proceeds  of  financial  assets  that  provide
  collateral for the security. The term includes an asset that  gives  the
  owner the right to receive from the collateral financial assets only the
  interest  or  other  current  return  or  only  the  proceeds other than
  interest or current return. The term does not include an asset to  which
  11-A-4.1 or 11-A-4.9 applies.
    (b)  If  a  trust  receives  a  payment from interest or other current
  return and from other proceeds of the collateral financial  assets,  the
  trustee  shall  allocate  to income the portion of the payment which the
  payer identifies as being from interest  or  other  current  return  and
  shall allocate the balance of the payment to principal.
    (c)  If  a  trust  receives  one  or more payments in exchange for the
  trust's entire interest in an asset-backed security  in  one  accounting
  period,  the  trustee  shall  allocate  the  payments to principal. If a
  payment is one  of  a  series  of  payments  that  will  result  in  the
  liquidation  of  the trust's interest in the security over more than one
  accounting period, the trustee shall allocate ten percent of the payment
  to income and the balance to principal.