JPRF-F-2025-0142 — Repeal of General Provision Sixth of Section V on Risk Asset Provisioning Rules for Savings and Credit Cooperatives and Mutual Housing Associations

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Resolution No. JPRF-F-2025-0142 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That, Article 82 of the Constitution of the Republic of Ecuador establishes the right to legal security, which is based on respect for the Supreme Norm and the existence of prior, clear, public norms applied by competent authorities; That, Article 132, number 6, of the Magna Carta grants control and regulatory bodies the authority to issue norms of a general nature in matters within their competence, without being able to alter or innovate legal provisions; That, Article 226 of the Supreme Norm provides that State institutions acting under a state power shall exercise only the competencies and faculties attributed to them in the Constitution and the law; That, Article 284 ibidem prescribes as an objective of economic policy the following: “7. Maintain economic stability, understood as the maximum level of production and sustainable employment over time.”; That, Article 303 of the Constitution stipulates that the formulation of monetary, credit, exchange, and financial policies is the exclusive authority of the Executive Branch; That, Article 308 of the Magna Carta determines that financial activities are a service of public order and may be exercised, with prior authorization from the State, in accordance with the law, and have as their fundamental purpose to preserve deposits and meet financing requirements for the achievement of the country's development; That, Article 309 of the Fundamental Norm provides that the National Financial System is composed of the public, private, and popular and solidarity sectors, which intermediates public resources. Each of these sectors will be responsible for preserving their security, stability, transparency, and solidity; That, Article 311 of the Supreme Law establishes that the popular and solidarity financial sector will be composed of savings and credit cooperatives, associative or solidarity entities, communal banks, and savings banks. Initiatives for services in the popular and solidarity financial sector will receive differentiated and preferential treatment from the State, to the extent that they promote the development of the popular and solidarity economy; That, Article 13 of the Organic Code of Monetary and Financial Law, Book I, reformed by the Organic Reformatory Law to the Organic Code of Monetary and Financial Law, published in the Official Register No. 443 of May 3, 2021, created the Financial Policy and Regulation Board, part of the Executive Branch, as a public law legal entity, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; That, Article 14, number 2, of the aforementioned normative body grants the Board the competence to “2. Issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and prepaid comprehensive health care services systems in accordance with what is provided in Article 309 of the Constitution of the Republic of Ecuador;”; That, number 3 of Article 14.1 of the aforementioned Organic Code determines as a function of the Financial Policy and Regulation Board to issue macroprudential regulations within the scope of its competence;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That, number 27 of Article 14.1 of the Organic Code of Monetary and Financial Law authorizes the Superintendencies to propose regulation projects to the Financial Policy and Regulation Board, backed by respective technical reports; That, Article 150 of the mentioned legal body prescribes that entities of the national financial system are subject to the regulation issued by the Financial Policy and Regulation Board; That, Article 151 of the referenced normative body provides that the regulation must recognize the nature and particular characteristics of each of the sectors of the national financial system. It also states that the regulation may be differentiated by sector, by segment, by activity, among others; That, Article 160 of the aforementioned Organic Code stipulates that the national financial system is integrated by the public financial sector, the private financial sector, and the popular and solidarity sector; That, Article 444 of the mentioned normative body states that popular and solidarity financial entities are subject to the regulation of the Financial Policy and Regulation Board and to the control of the Superintendency of the Popular and Solidarity Economy, who in the policies they issue will keep in mind the nature and characteristics proper to the solidarity financial sector; That, Article 144 of the aforementioned Law stipulates that the regulation of the popular and solidarity financial sector will be the responsibility of the Financial Policy and Regulation Board; That, the Fiftieth Fourth Transitional Provision of the previously mentioned Code determines the transitional regime of resolutions of the Codification of the Monetary and Financial Policy and Regulation Board, establishing that: “(…) The resolutions contained in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of the Monetary and Financial Policy and Regulation Board and the norms issued by control bodies will maintain their validity until the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board resolve what corresponds, within the scope of their competencies.”; That, Article 15 of the Organic Administrative Code recognizes the principle of responsibility, in which it is established that: “The State will be liable for damages as a consequence of the lack or deficiency in the provision of public services or the actions or omissions of its public servants or subjects of private law who act in exercise of a public power delegated by the State and their dependents, controlled or contractors.”; That, with Letter No. SEPS-SGD-2025-04476-OF of February 14, 2025, the Superintendency of the Popular and Solidarity Economy requested the Financial Policy and Regulation Board to reform the Norm for the Constitution of Provisions for Risk Assets in Savings and Credit Cooperatives and Mutual Associations of Savings and Credit for Housing; That, with Letter No. SEPS-SEP-2025-0021-O of February 17, 2025, the Superintendency of the Popular and Solidarity Economy made an extension to the proposal presented according to the previous consideration; That, the Technical Secretary of the Financial Policy and Regulation Board, through Memoranda No. JPRF-ST-2025-0013-M and its extension No. JPRF-ST-2025-0014-M, both dated March 17, 2025, forwards to the President of the Board the Technical Report No. JPRF-CTSF-2025-006 and the Legal Report No. JPRF-CJF-2025-006, both dated March 17, 2025, as well as the respective draft resolution;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on March 17, 2025, and carried out via video conference on March 19, 2025, reviewed the Memoranda No. JPRF-ST-2025-0013-M and its extension No. JPRF-ST-2025-0014-M, both dated March 17, 2025, issued by the Technical Secretary of the Board; as well as the Technical Report No. JPRF-CTSF-2025-006 and the Legal Report No. JPRF-CJF-2025-006, both dated March 17, 2025, issued by the Technical Coordination of Policy and Regulation of the Financial System and by the Legal Coordination of Policy and Financial Norms, and the corresponding draft resolution; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on March 17, 2025, and carried out via video conference on March 19, 2025, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: SINGLE ARTICLE.- Repeal General Provision Sixth of Section V “Norms for the Constitution of Provisions for Risk Assets in Savings and Credit Cooperatives and Mutual Associations of Savings and Credit for Housing”, of Chapter XXXVI “Popular and Solidarity Financial Sector”, Title II “National Financial System”, Book I “Monetary and Financial System”, of the Codification of Monetary, Financial, Securities, and Insurance Resolutions. FINAL PROVISION.- This Resolution will enter into force from the present date, without prejudice to its publication in the Official Register. Publish this Resolution on the website of the Financial Policy and Regulation Board within a maximum term of two (2) days from its issuance. COMMUNICATE.- Given in the Metropolitan District of Quito, on March 19, 2025. THE PRESIDENT, Mgs. María Paulina Vela Zambrano The resolution above was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on March 19, 2025.- I CERTIFY. TECHNICAL SECRETARY, Mgs. Luis Alfredo Olivares Murillo