Section 15-522 - Asset-backed securities. - Maryland Statutes

§ 15-522. Asset-backed securities.
 

(a)  "Asset-backed security" defined.-  

(1) 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. 

(2) "Asset-backed security" 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. 

(3) "Asset-backed security" does not include an asset to which § 15-508 or § 15-516 of this subtitle applies. 

(b)  Allocation of interest or other current return.- 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)  Allocation of payments received for trust's entire interest.- 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. 
 

[2000, ch. 292, § 2; 2001, ch. 29, § 1.]