Regulatory Alerts2022-01-01 | JPRF-F-2022-035JPRF-F-2022-035 — Reform of the variable component of the reference rate for the adjustment of risk-free interest rates in substitution of the LIBOR rate
The Financial Policy and Regulation Board of Ecuador issued Resolution JPRF-F-2022-035 to reform the regulatory framework for adjustable interest rates by replacing the discontinuing LIBOR benchmark with risk-free rates such as SOFR and PRIME. The resolution mandates that financial institutions use these new reference rates, combined with a fixed component, for all new adjustable rate operations while ensuring compliance with maximum effective interest rate caps. It further establishes a transitional provision allowing existing contracts to maintain their original reference rates until maturity, acknowledging that LIBOR will be discontinued in June 2023.
Share