§ 37A-4-415. Asset-backed securities.
§ 37A‑4‑415. Asset‑backed securities.
(a) In this section,"asset‑backed security" means an asset whose value is basedupon the right it gives the owner to receive distributions from the proceeds offinancial assets that provide collateral for the security. The term includes anasset that gives the owner the right to receive from the collateral financialassets only the interest or other current return or only the proceeds otherthan interest or current return. The term does not include an asset to which G.S.37A‑4‑401 or G.S. 37A‑4‑409 applies.
(b) If a trust receivesa payment from interest or other current return and from other proceeds of thecollateral financial assets, the trustee shall allocate to income the portionof the payment the payer identifies as being from interest or other currentreturn and shall allocate the balance of the payment to principal.
(c) If a trust receivesone or more payments in exchange for the trust's entire interest in an asset‑backedsecurity in one accounting period, the trustee shall allocate the payments toprincipal. If a payment is one of a series of payments that will result in theliquidation of the trust's interest in the security over more than oneaccounting period, the trustee shall allocate ten percent (10%) of the paymentto income and the balance to principal. (2003‑232, s. 2.)