Sec. 45a-542w. Asset-backed securities.
Sec. 45a-542w. 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 section 45a-542i
or 45a-542q 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 per cent of the payment to income and the balance to principal.
(P.A. 99-164, S. 24, 36.)
History: P.A. 99-164 effective January 1, 2000.