JPRF-A-2022-026 — Approves the Strategic Plan 2022-2025 of the JPRF

Resolution No. JPRF-A-2022-026 THE FINANCIAL POLICY AND REGULATION BOARD

CONSIDERING:

That Article 227 of the Constitution of the Republic mandates: "Public administration constitutes a service to the community that is governed by the principles of effectiveness, efficiency, quality, hierarchy, decentralization, deconcentration, coordination, participation, planning, transparency, and evaluation";

That Article 280 of the Magna Carta of the Republic establishes: "The National Development Plan is the instrument to which public policies, programs, and projects; the programming and execution of the State budget; and the investment and allocation of public resources shall be subject; and to coordinate the exclusive competencies between the central State and the decentralized autonomous governments. Its observance shall be mandatory for the public sector and indicative for other sectors";

That Article 54 of the Organic Code of Public Planning and Finances determines: "Institutional Plans.- Institutions subject to the scope of this code, excluding Decentralized Autonomous Governments, shall report their institutional planning instruments to the national planning authority to verify that the proposed actions, programs, and projects correspond to the institutional competencies and the objectives of the National Development Plan.";

That Article 55, numeral 3 of the Organic Administrative Code indicates that within the competencies of collegiate bodies is the approval of strategic plans;

That, through Resolution No. STPE-013-2019 of October 31, 2019, the Technical Standard of the Decentralized System of Participatory Planning was issued, by which definitions and guidelines for the formulation, updating, validation, monitoring, and evaluation of the planning instruments and coordination of the Decentralized System of Participatory Planning were established; as well as the process of nomination, prioritization, modification, and budgetary certification of public investment programs and projects was operationalized;

That Article 26 of the aforementioned Technical Standard dictates that: "Registry of Institutional Plans.- Institutional plans shall be delivered to the planning authority for registration, within a maximum of 45 days from the publication of the National Development Plan in the Official Register." In this sense, with the Fourth Supplement of the Official Register No. 544 of September 23, 2021, the approval of the Plan for the Creation of Opportunities 2021-2025 was published;

That the Technical Standard of the National System of Participatory Planning establishes in its articles 24 and 25 that the Validation process is executed by the planning authority, while the Approval process is carried out by the pertinent authority of the entity;

That Resolution No. STPE-0063-2020 of September 16, 2020, reformed the Technical Standard of the Decentralized System of Participatory Planning, issued through Resolution No. STPE-013-2019 of October 31, 2019;

That through the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, published in the First Supplement of the Official Register No. 443 of May 3, 2021, the Financial Policy and Regulation Board (JPRF) was created, as part of the Executive Function, being a legal entity of public law, with administrative, financial, and operational autonomy, responsible for the formulation of financial, securities, insurance, and prepaid comprehensive health care services policy;

That the Technical Secretary of the Financial Policy and Regulation Board through memorandum No. JPRF-SETEC-2022-0036-M of April 21, 2022, sends to the President of the JPRF, the technical-legal report No. JPRF-CTCJ-2022-001 of April 21, 2022, which supports the pertinence of this Resolution;

Resolution No. JPRF-A-2022-026 Page 2 of 2

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That the Financial Policy and Regulation Board, in an ordinary session held by technological means convened on April 21, 2022, and carried out via video conference on April 25, 2022, resolved to review the technical-legal report No. JPRF-CTCJ-2022-001 of April 21, 2022, regarding the Strategic Plan of the Financial Policy and Regulation Board (JPRF) 2021 - 2025; and,

In exercise of the attributions and duties conferred by Law,

RESOLVES:

SINGLE ARTICLE.- Approve the Strategic Plan of the Financial Policy and Regulation Board (JPRF) for the period 2021 - 2025, according to the attached annex.

GENERAL PROVISIONS:

FIRST.- The authorities, public servants, and workers of the Financial Policy and Regulation Board must manage their tasks and activities in accordance with the guidelines contemplated in the JPRF Strategic Plan 2021 - 2025.

SECOND.- The Planning, Monitoring, and Evaluation Unit of the Management of the Financial Policy and Regulation Board is ordered to process the registration before the National Secretariat of Planning and carry out the corresponding follow-up of the Strategic Plan.

FINAL PROVISION.- This Resolution shall enter into force from the present date, without prejudice to its publication in the Official Register. This Resolution shall be published on the website of the Financial Policy and Regulation Board, within a maximum term of two days from its issuance.

COMMUNICATE.- Given in the Metropolitan District of Quito, on April 25, 2022.

THE PRESIDENT, Master María Paulina Vela Zambrano

The aforementioned resolution 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 April 25, 2022.-

I CERTIFY. TECHNICAL SECRETARY Dr. Nelly Arias Zavala

Electronically signed by: NELLY DEL PILAR ARIAS ZAVALA

Electronically signed by: MARIA LUCRECIA PAULINA VELA ZAMBRANO

FINANCIAL POLICY AND REGULATION BOARD

STRATEGIC PLAN JPRF 2021-2025 www.jprf.gob.ec

2 Strategic Plan Content

1. INSTITUTIONAL DESCRIPTION AND DIAGNOSIS.......................................................................4 1.1 INSTITUTION DESCRIPTION ..................................................................................4 1.1.1 Creation......................................................................................................................................4 1.1.2 Composition .............................................................................................................................4 1.1.3 Members ....................................................................................................................................5 1.1.4 Role, scope, competencies, and powers...................................................................................5 1.2 INSTITUTIONAL DIAGNOSIS................................................................................................7 1.2.1 Planning......................................................................................................................................7 1.2.2 Organizational Structure .........................................................................................................8 1.2.3 Human Talent.......................................................................................................................10 1.2.4 Information and communication technologies .................................................................11 1.2.5 Processes and procedures .....................................................................................................12
2. SITUATIONAL ANALYSIS.........................................................................................................14 2.1 CONTEXT ANALYSIS ..................................................................................................14 2.1.1 Political ......................................................................................................................................14 2.1.2 Economic ......................................................................................................................................16 2.1.3 Social.........................................................................................................................................22 2.1.4 Technological ..............................................................................................................................23 2.1.5 Cultural......................................................................................................................................23 2.2 SECTORAL ANALYSIS AND TERRITORIAL DIAGNOSIS...............................................24 2.3 ACTOR MAP ...........................................................................................................37 2.4 SWOT ANALYSIS...................................................................................................................42
3. GUIDING ELEMENTS .............................................................................................44 3.1 MISSION ..................................................................................................................................44 3.2 VISION...................................................................................................................................44 3.3 VALUES..............................................................................................................................45
4. STRATEGIC ELEMENTS..............................................................................................47 4.1 STRATEGIC OBJECTIVES............................................................................................47 4.2 STRATEGIES .....................................................................................................................48 4.3 INDICATORS......................................................................................................................52 4.4 TARGETS...................................................................................................................................53
5. ALIGNMENT WITH THE NATIONAL DEVELOPMENT PLAN.......................................................55
6. CURRENT EXPENDITURE BUDGET ...........................................................................57
7. ANNEXES....................................................................................................................................58 Annex 1: MULTI-ANNUAL PROGRAMMING OF PUBLIC POLICY ....................................58 Annex 2: ANNUAL PROGRAMMING OF PUBLIC POLICY................................................62

3 Strategic Plan Introduction The Financial Policy and Regulation Board was created following the approval of the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, issued on April 22 and published on May 3, 2021. Among the powers granted to the Board is the formulation of policies that allow for stability and growth in the credit, financial, securities, insurance, and prepaid comprehensive health care services sectors in Ecuador. The Board began its operations in December of the same year, with the preliminary composition of the Technical Secretariat, establishing priorities from a technical and administrative point of view, defining processes that allowed for the efficient and pertinent allocation of resources to fulfill the objectives for which it was created. Among its main objectives is to establish that the systems under its regulation are integral, solid, sustainable, and stable; for this purpose, it works under an open-door policy that brings it closer to market actors, seeking clear and fluid communication that fosters a framework of effective and efficient regulation, and at the same time prudent, demanding, and permanent. In these first months of management, specific goals have been established to facilitate policies that provide confidence and legal certainty, stability, economic growth, and social well-being. In this context, the work performed and planned for the new year arises from strategic planning that reflects the mission, vision, objectives, and goals of the institution. Thus, the Financial Policy and Regulation Board presents its Institutional Strategic Plan 2022 – 2025, which was built participatively with all the personnel of the Board. Members of the Financial Policy and Regulation Board.

4 Strategic Plan

1. INSTITUTIONAL DESCRIPTION AND DIAGNOSIS 1.1 INSTITUTION DESCRIPTION 1.1.1 Creation The Financial Policy and Regulation Board (JPRF) was created through the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Supplement of the Official Register No. 443 of May 3, 2021, in response to the need to "strengthen the dollarization regime and safeguard the integrity and consistency of the applicable regulations to the national financial, securities, insurance, and prepaid comprehensive health care services systems"1. To this end, this collegiate body was created as a legal entity of public law, part of the Executive Function, with administrative, financial, and operational autonomy. 1.1.2 Composition In accordance with Article 13 of the Organic Monetary and Financial Code, the Financial Policy and Regulation Board; hereinafter referred to as the JPRF or the Board; shall be composed of three full-time members. The members shall be designated and sworn in by the National Assembly, from among three candidates proposed by the President of the Republic, who shall serve a term of four years, and may be reelected only once. One of its members shall be elected as President and a substitute President, for a term of two years. In the event of temporary or permanent absence of the President, the substitute President shall take their place. To be appointed as a member of the Financial Policy and Regulation Board, in addition to the general requirements provided in the Organic Law of Public Service, those indicated in the Organic Monetary and Financial Code must be met.

1 Note thus from the considerations of the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Supplement of the Official Register No. 443 of May 3, 2021.

5 Strategic Plan As a coordination mechanism, the President of the Monetary Policy and Regulation Board, the Superintendent of Banks, the Superintendent of Companies, Securities, and Insurance, the Superintendent of Popular and Solidarity Economy, the President of the Board of Directors of the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund; and, a delegate from the authority in charge of public finances, participate in the deliberations of the JPRF with voice but without vote. 1.1.3 Members The members of the Financial Policy and Regulation Board for the 2021-2025 period were sworn in on October 12, 2021, by the National Assembly, and are: María Paulina Vela (president), Catalina Pazos, and Iván Velástegui. To fulfill its functions, the Board has a Technical Secretariat responsible for preparing, under best regulatory practices, the regulations in matters within its competence. In all cases, the regulations and policies issued by the Board in the exercise of its functions, duties, and powers must be backed by duly substantiated and argued technical reports.2 In this endeavor, the Board must coordinate its actions with the control entities linked to the areas of its competence, as well as with the Monetary Policy and Regulation Board, a collegiate body of which the President of the Financial Policy and Regulation Board is also a member with voice, but without vote. The Board will also have an Advisory Council, composed of a group of experts linked to the regulated sectors, which will serve to obtain feedback on problems, alternative solutions, and ex ante evaluation of the impact of the regulations to be issued, all with the aim of adopting the best decisions within the framework of the constitutional and legal objectives of the public policy within the competence of this collegiate body. 1.1.4 Role, scope, competencies, and powers The functions of the Financial Policy and Regulation Board, detailed in Article 14.1 of the Organic Monetary and Financial Code (COMYF), provide that the Board elaborates policies, regulates, issues, and evaluates norms, establishes rates and commissions, and promotes processes that drive economic activities, which may include the suggestion of legislative modification on financial, credit, securities, insurance, and prepaid comprehensive health care services topics.

2 Article 14 of the Organic Monetary and Financial Code.

6 Strategic Plan Among the main duties and powers are: • Regulate the creation, constitution, organization, activities, operation, and liquidation of financial, securities, insurance, and prepaid comprehensive health care services entities; • Regulate the financial activities carried out by entities of the national social security system; • Evaluate risks to financial stability and issue macroprudential regulations within the scope of its competence, in consultation with the Monetary Policy and Regulation Board, without prejudice to its independence; • Issue the prudential regulatory framework to which financial, securities, insurance, and prepaid comprehensive health care services entities must adhere; • Establish the segmentation of entities in the popular and solidarity financial sector; • Issue the non-prudential regulatory framework for all financial, securities, insurance, and prepaid comprehensive health care services entities, which will include, among others, norms on accounting, transparency and information disclosure, market integrity, consumer protection; • Promote financial inclusion processes and the full exercise of financial users' rights; • Establish the system to define charges for services provided by financial, securities, insurance, and prepaid comprehensive health care services entities, as well as non-financial entities that grant credit; and, the expenses with third parties derived from active operations in which users of these entities incur, promoting financial innovation and financial inclusion processes; • Establish the system to define the commissions that financial entities may charge commercial establishments for the use of credit, debit card, and other similar payment services; • Establish, within the framework of its competencies, any measure that contributes to preventing and seeking to eradicate fraudulent practices, including money laundering and the financing of crimes such as terrorism, considering current and applicable international standards; protect the privacy of individuals regarding the dissemination of their personal information, as well as national security information; create products oriented to promote and facilitate the financial inclusion of priority attention groups; and, foster financial inclusion,

7 Strategic Plan promoting the participation of financial, securities, insurance, and prepaid comprehensive health care services entities; and, • Present to the President of the Republic, proposals for modification of financial, credit, securities, insurance, and prepaid comprehensive health care services legislation.3 In accordance with current regulations and the Competency Matrix validated by the Ministry of Labor, the Board has the competencies of: 1) Financial Policy and Regulation, 2) Securities Policy and Regulation, 3) Insurance and Prepaid Health Policy and Regulation, and 4) Financial Inclusion; on the other hand, the powers exercised by the Board are: 1) Leadership, 2) Regulation, 3) Management, and 4) Coordination. 1.2 INSTITUTIONAL DIAGNOSIS The institutional diagnosis is an input that allows us to analyze the current internal situation in which the entity operates. It is a starting point that makes transparent limitations as well as institutional capacities. In the analysis, aspects such as: Planning, Organizational Structure, Human Talent, Information and Communication Technologies, Processes, and Procedures were considered. 1.2.1 Planning In December 2021, the Planning, Monitoring, and Evaluation Unit was implemented in the institution, beginning its activities with the construction of institutional management elements, for which a technical team was defined composed of delegates from the Technical Coordination, Legal Coordination, Human Talent Administration Unit, and Planning, Monitoring, and Evaluation of Management Unit. • Competency Matrix.- It is the methodological instrument whose purpose is to delimit the competencies, powers, and attributions of entities born from the norm that determines their role and regulates their management.4 • Value Chain.- It is the set of processes involved in delivering value to users. It logically describes how processes of a sector or institution develop, seeking to add a concept of value at each link of the chain. The value chain will be defined in concordance with the competencies, powers, and attributions established for it within the framework of the instruments created for this purpose and under the focus of the established sectoral policy.5 • Management Model.- The management model is the technical tool that contains the components that allow identifying the mechanisms through which public entities exercise the competencies born from their matrix. The management model must detail the role of the institution, as well as the internal and inter-institutional relationships required to fulfill the attributions corresponding to it.6 The Competency Matrix and the Value Chain are in the process of validation; these instruments will be inputs to define the reform to the Organizational Structure and Organic Statute, which will be led by the Human Talent Administration Unit. Additionally, together with the Financial Administrative Directorate, the 2022 budget was raised, in which the necessary and essential activities for the normal functioning of the planned activities of each technical and administrative area were defined. Once this Strategic Plan is approved by the Board Members, the operational plans of each unit will be deployed, which must be accompanied by a monitoring and evaluation methodology. 1.2.2 Organizational Structure The Minis

3 Article 14.1 of the Organic Monetary and Financial Code. 4 Art. 16, Ministerial Agreement No. MDT-2021-223, August 25, 2021. 5 6

8 Strategic Plan