Resolution JPRM-2023-011-G — Regulation on Institutional Committees

MONETARY POLICY AND REGULATION BOARD RESOLUTION NO. JPRM-2023-011-G THE MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

That the Constitution of the Republic, in Article 226, stipulates that public servants and persons acting under state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law;

That Article 227 of the aforementioned Constitution provides that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That the first paragraph of Article 303 of the Constitution of the Republic determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive authority of the Executive Branch and shall be implemented through the Central Bank of Ecuador;

That Article 47.1 of the Organic Monetary and Financial Code creates the Monetary Policy and Regulation Board as part of the Executive Branch, responsible for monetary policy formulation, the highest governing body of the Central Bank of Ecuador, and determines its composition;

That numeral 15 of Article 47.6 aforementioned, as a function of the Monetary Policy and Regulation Board, determines: "(...) 15. Establish and regulate the operation of committees that may be necessary for the functioning of the Bank(...)";

That the first paragraph of Article 138 of the Regulation to the Organic Law of Public Service provides: "In the institutions established in Article 3 of the LOSEP, the Service Quality Management and Institutional Development Committee shall be integrated, which will be responsible for proposing, monitoring, and evaluating the application of policies, standards, and priorities related to improving institutional efficiency";

That, through Executive Decree No. 4, of May 24, 2021, the President of the Republic issued the "Governmental Ethical Conduct Standards", which contain the ethical behavior parameters applicable to all public servants of the Executive Branch in compliance with their duties and powers;

That, through Executive Decree No. 2393, of November 17, 1986, published in Official Register No. 565, of November 17, 1986, reformed on February 21, 2003, the "Regulation on Worker Safety and Health" was issued; and, in numeral 1 of its Article 14 it establishes: "1. In every workplace where more than fifteen workers are employed, a Committee for Occupational Safety and Hygiene shall be organized, composed equally of three worker representatives and three employer representatives(...)";

That, through Ministerial Agreement No. MDT-2020-0111, of May 6, 2020, the Ministry of Labor issued the "Technical Standard for Continuous Improvement and Innovation of Processes and Services", which in its Article 1, as its object, determines: "(...) establish guidelines and procedures for the continuous improvement and innovation of processes and services in State entities(...)";

That Article 11 ibidem, regarding the Service Quality Management and Institutional Development Committee, states: "Entities shall permanently form the Service Quality Management and Institutional Development Committee(...)";

That Article 3 of Resolution of the Ombudsman's Office No. 007-DPE-CGAJ, of January 15, 2015, published in Official Register Supplement No. 433, of February 6, 2015, establishes: "Active Transparency.- Active transparency is understood as the obligation of public and private sector institutions that administer or manage public resources to publish on a specific link on their websites their main activities framed within their creation and scope of competence, in order to make available to the citizenry the management they are fulfilling";

That Articles 8, 9, and 10 of the aforementioned resolution provide for the formation, functions, and integration of the Transparency Committee of each public entity possessing information;

That, through Resolution No. JPRM-2021-008-A, of December 21, 2021, the Monetary Policy and Regulation Board issued the "Code of Ethics of the Monetary Policy and Regulation Board and the Central Bank of Ecuador", whose Second Transitional Provision provides: "The Central Bank of Ecuador, within a term of ninety (90) days, shall submit the necessary documentation to regulate the creation and operation of the Ethics Committee, which shall contain, at least, the provisions that regulate its composition, powers, disciplinary procedures, and decision-making mechanisms";

That the Monetary Policy and Regulation Board, in an ordinary session, via virtual modality, on May 30, 2023, reviewed the proposal submitted via memorandum No. BCE-BCE-2023-0125-M, of May 24, 2023, by the General Manager of the Central Bank of Ecuador to the President of the Monetary Policy and Regulation Board, as well as the technical report No. BCE-DPCl-2023-010, of May 24, 2023; and the legal report No. BCE-CGJ-030-2023, of May 24, 2023;

In exercise of its functions and in accordance with Article 47.7 of the Organic Monetary and Financial Code, the Monetary Policy and Regulation Board resolves to issue:

REGULATION ON THE CREATION AND OPERATION OF THE INSTITUTIONAL COMMITTEES OF THE CENTRAL BANK OF ECUADOR

CHAPTER I GENERALITIES

SECTION I: OBJECT, SCOPE OF APPLICATION, AND CREATION

Article 1.- Object: Regulate the creation and operation of the institutional committees of the Central Bank of Ecuador.

Article 2.- Scope of Application: All members of the institutional committees, as well as public servants of the Central Bank of Ecuador nationwide, shall be subject to the provisions of this regulation.

Article 3.- On the creation of committees: The following committees of the Central Bank of Ecuador are hereby created:

1. Assets and Liabilities Committee;
2. Comprehensive Risk Management Committee;
3. Monetary and Financial Stability Committee;
4. Payment Means and Systems Committee;
5. Institutional Management Committee;
6. Ethics Committee;
7. Service Quality Management and Institutional Development Committee;
8. Transparency Committee; and,
9. Joint Committee for Occupational Safety and Health.

SECTION II: GENERAL RESPONSIBILITIES

Article 4.- Responsibility of Institutional Committees: Establish permanent spaces for institutional coordination and articulation, for the formulation of guidelines, priority action lines, and strategies, that contribute to adequate steering, regulation, planning, coordination, evaluation, control, security, and management of the Central Bank of Ecuador.

Article 5.- General Guidelines: Committees shall operate under the following general guidelines: a) They shall exercise only the functions attributed to them in the act of creation; b) All committees shall have a president, a vice president, and a secretary; c) They may hold sessions with a simple majority of members with the right to speak and vote, except in committees where the higher norm has stipulated otherwise; d) Under no circumstances shall a session be convened without the presence of the committee president or their delegate; e) When applicable, each committee shall define a procedure for prior socialization of the topics to be addressed in sessions, so that each area can have criteria and recommendations to present them to the committee; f) Topics shall be addressed with the presentation of technical or legal reports in physical or electronic format; and, g) Committee sessions may be held in person, virtually, or in a mixed format.

Article 6.- Responsibilities of the Committee President: The committee president shall have the following powers and responsibilities: a) Exercise the official representation of the committee; b) Ensure compliance with the committee's functions; e) Convene, preside, suspend, and close ordinary and extraordinary committee sessions; d) Call, directly or through the committee secretariat, to ordinary and extraordinary meetings; e) Co-sign the session minutes with the committee secretary; f) Sign the documents generated to perfect the resolutions adopted by the committee; g) Receive and forward to the secretariat the reports, documents, and related to matters presented by the different units of the Central Bank of Ecuador that must be addressed in the committee; h) In case of absence, notify the committee secretary so that the vice president may substitute them; and, i) Those otherwise determined in the specific norms of each committee.

Article 7.- Powers and Responsibilities of the Committee Vice President: The committee vice president shall have the following powers and responsibilities: a) Substitute the president in case of temporary or permanent absence; b) Support the president in the fulfillment of their functions; and, c) All others assigned by the committee president or conferred by the specific legal framework of each committee.

Article 8.- Responsibilities of the Committee Secretariat: The public servant appointed as committee secretary shall have the following responsibilities: a) Draft, at the direction of the committee president, the calls for ordinary or extraordinary sessions; b) Call committee sessions, at the direction of the president; e) Support in the organization of sessions; d) Participate in sessions with advisory voice; e) Advise the committee within the scope of their competencies; f) Verify the minimum quorum necessary to convene a session; g) Take the vote of committee members and maintain a record of adopted decisions; h) Draft the committee session minutes, which they must co-sign with the president; i) Maintain and safeguard the magnetic or physical archive of session minutes, as well as the record of session calls, recordings, and other documentation concerning the committee; j) Issue certified copies of the minutes or documents under their custody, when requested, with the corresponding exceptions for reserved documentation or information; k) Inform the committee, prior to the start of the session, of the status of resolutions or directives issued in previous sessions; for this purpose, they will request from responsible units information regarding compliance with previous requirements; l) Prepare communications and official letters regarding matters addressed and resolutions adopted by the committee; and, m) All others assigned by the committee president or conferred by the specific legal framework of each committee.

Article 9.- Powers of Committee Members: Committee members shall have the following powers: a) Attend punctually and participate actively in committee meetings. Attendance of members at ordinary and extraordinary committee sessions is mandatory; they may justify their absence in cases of force majeure, in which case they shall delegate in writing to a servant from their area; b) Present their excuse to review any matter in which they have or could have a conflict of interest or factors that affect their independence or objectivity in decision-making; c) Act with voice and vote; and, in specific cases determined in this norm, only with voice; d) Committee members' votes may be affirmative or negative; the latter must be duly motivated; e) Propose agenda items for ordinary or extraordinary sessions; and, f) All others assigned by the committee president or conferred by the specific legal framework of each committee.

Article 10.- Invitees: The committee president, on their own or upon express request of one or more members, may call as occasional invitees members of the Monetary Policy and Regulation Board and its servants; as well as other public servants of the Central Bank of Ecuador; or representatives or technicians from other public or private institutions, who will participate in deliberations with voice but without vote, for the purpose of informing or advising on specific topics to be addressed or matters related to their management.

CHAPTER II OPERATION OF THE INSTITUTIONAL COMMITTEES

Article 11.- On Sessions: Institutional committees shall meet ordinarily with the periodicity indicated in the corresponding sections of this norm and extraordinarily by directive of the president or request of one of its members, with prior approval of the president. Sessions may be in person, virtual, or mixed, as established in the call. Committee sessions must be recorded using technological means, solely for the purpose of drafting the respective minutes. These recordings shall not form part of the committee's digital files.

Article 12.- On Session Calls: The call to committee members for ordinary or extraordinary sessions shall be made through the institutional agenda application, detailing the date, start time, agenda, meeting mode, and location if held in person. The call shall be made at least three (3) days in advance; unless extraordinary matters require an emergency call in a shorter timeframe. The call must attach the reports, documentation, or corresponding materials to be analyzed by committee members. If the session is held via telematic means, the call shall specify the medium or application to conduct the meeting.

Article 13.- On the Agenda: The agenda defined in the call for ordinary sessions may be modified, with the approval of the committee president, by motion of any committee member. The agenda notified for extraordinary sessions may not be modified.

Article 14.- On Session Convening: The committee shall convene with the physical presence or telematic attendance of at least half of its members with voice and vote. In the event that the session cannot be convened due to lack of quorum, a new call shall be made, which may convene immediately with the attending members. From the foregoing, the committee secretary shall record this in the respective minutes, and the president shall initiate the corresponding administrative actions for unjustified absences of members.

Article 15.- Adjournment and Reconvening: A convened session may be suspended or adjourned, to be held at different hours or days, until the agenda items are concluded, for which the president shall indicate the day and time the session will continue; likewise, the medium through which the session will continue shall be indicated. Upon reconvening the session, the attendance of committee members shall be verified, and the pending agenda items shall be continued.

Article 16.- On Motions: Any committee member may present a motion for consideration by its members. Motions shall be verbal, but may be submitted in writing if members deem it appropriate; they shall be recorded by the secretariat to be considered according to the order of presentation. All motions shall be approved by vote, with results recorded in the minutes. A rejected motion may not be discussed again, unless the presentation of new documentation or arguments allows for its rectification; in any case, it shall be treated as a reconsideration. The same treatment shall apply to motions regarding decisions taken in previous sessions of the same committee.

Article 17.- Resolutions: Committees, in cases deemed necessary or regulated by higher norms, shall adopt their resolutions based on the technical and legal reports or documentation provided by the administrative units of the Central Bank of Ecuador. In the event of not having a unanimous decision, to reach a consensus resolution, decisions shall be adopted by a simple majority of affirmative votes from members with voice and vote, or their delegates, present at the ordinary or extraordinary session. In case of a tie, the committee president shall have the casting vote. Votes may be recorded in person or telematically, and adopted decisions shall be clearly stated in the minutes.

Article 18.- Closing of Debate: Prior to proceeding with the vote, the president shall ensure that the matter has been sufficiently discussed; and, consequently, shall declare the debate closed. Once the debate is closed, the secretary shall read the discussed motion, and the president shall order the vote on it, which shall be proclaimed by the secretary.

Article 19.- Session Minutes: The results of each session shall be recorded in the respective session minutes. The committee secretary shall be responsible for their drafting, and they shall contain at least the following: a) Number, location, date, meeting mode (in person, virtual, or mixed), start and end time of the session; b) List of attending members; c) Agenda; d) Main aspects of debates, observations, and deliberations; e) Commitments assumed by members; and, f) Adopted decisions, indicating how each member voted. Committee session minutes shall be sent via technological means such as email, document management system, or other data messages of similar nature, to committee members who participated in the session, so that within three (3) days, counted from their communication, they may submit respective observations. If no response is received from members within the aforementioned term, their conformity with the proposed text and approval of the minutes shall be understood. In minutes of sessions that have been adjourned or suspended, in addition to the suspension time, the date and time of reconvening and attendees shall be recorded; retaining the same minute number until closure. Session minutes shall be signed by the committee president and secretary, the corresponding documentation for each session shall be attached, they shall be numbered successively, and archived in chronological order by the committee secretary. Autographically signed minutes shall be digitized and maintained in a digital repository. Due to the nature of the topics addressed in the committees, the minutes and all documents may be declared reserved by committee members with voice and vote, which shall be noted in all committee documentation. Committee minutes shall follow the format contained in the annex of this instrument.

CHAPTER III INSTITUTIONAL COMMITTEES

SECTION I: ASSETS AND LIABILITIES COMMITTEE

Article 20.- General Objective: Review the results of asset and liability management, with the purpose of making recommendations to improve the efficiency of these operations.

Article 21.- Members: The Assets and Liabilities Committee shall be composed of the following members:

1. General Manager, who shall act as president;
2. Deputy General Manager, who shall act as vice president;
3. Operations Deputy Manager;
4. Services Deputy Manager;
5. Programming and Regulation Deputy Manager;
6. National Director of Operational Risks;
7. National Director of Systemic Risk;
8. General Administrative and Financial Coordinator; and,
9. General Legal Coordinator, or their delegate, who shall act with voice only. The Director of Document Management and Archives shall act as secretary.

Article 22.- Functions.- The Assets and Liabilities Committee shall have the following functions: a) Review the results of the execution of investment strategies for the portfolios of External Assets of International Reserves and the forecasts of international financial market evolution; b) Review the results of the collection management of the Central Bank of Ecuador's local portfolios; c) Review the results of gold commercialization management; d) Recommend to the Monetary Policy and Regulation Board, through the corresponding internal procedure, the conditions for the issuance and placement of Central Bank of Ecuador securities, open market operations, and rediscount window operations, and review the results of their application; e) Review proposed letter of credit structures and their associated costs; f) Review reports on the administration and scheduling of monetary species; g) Review and approve the proposal for the scheduling of national fractional currency issuance; h) Resolve on the activation and conclusion of the liquidity contingency plan; and, report it to the Monetary Policy and Regulation Board, in accordance with the regulations issued for this purpose; i) Review the results of the application of the liquidity contingency plan; j) Review the Central Bank of Ecuador's financial statements on a monthly basis; and, k) Review or resolve, as applicable, regarding other aspects related to the committee's scope of competence.

Article 23.- Session Periodicity: The Committee shall meet, at least, once a month ordinarily.

SECTION II: COMPREHENSIVE RISK MANAGEMENT COMMITTEE

Article 24.- General Objective: Monitor the risks to which the Central Bank of Ecuador is exposed, such as financial, operational,