N.Y. Estates, Powers & Trusts Law § 11-a-4.15: 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.