58-9-415. Asset-backed securities.
58-9-415
58-9-415. Asset-backed securities.(a) As used in this section, "asset-backed security" meansan asset whose value isbased upon the right it gives the owner to receive distributions from theproceeds of financial assets that provide collateral for the security. Thetermincludesan assetthat gives the owner the right to receive from the collateral financial assetsonly theinterest or other current return or only the proceeds other than interest orcurrentreturn. The term does not include an asset to which K.S.A. 58-9-401or 58-9-409andamendments thereto applies.
(b) If a trust receives a payment from interest or other current returnandfrom other proceeds of the collateral financial assets, the trustee shallallocate toincome the portion of the payment which the payer identifies as being frominterestor other current return and shall allocate the balance of the payment toprincipal.
(c) If a trust receives one or more payments in exchange for thetrust's entire interest in an asset-backed security in one accounting period,the trustee shallallocate the payments to principal. If a payment is one of a series ofpayments thatwill result in the liquidation of the trust's interest in the security overmore than oneaccounting period, the trustee shall allocate 10 percent of the payment toincomeand the balance to principal.
History: L. 2000, ch. 61, § 24; July 1.