Vermont § 3365 - Asset-backed securities

§ 3365. Asset-backed securities

• (a) As used 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 3351 or 3359 of this title 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 10 percent of the payment to income and the balance
  to principal. (Added 2011, No. 114 (Adj. Sess.), § 1.)