Resolution JPRM-2023-017-G: Reforming the Regulation on the Formation and Functioning of Institutional Committees of the Central Bank of Ecuador

RESOLUTION NO. JPRM-2023-017-G THE MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

That, the Constitution of the Republic, in Article 226, prescribes that public servants and persons acting by virtue of a state power shall exercise only the competencies and faculties attributed to them in the Constitution and the Law;

That, Article 227 ibid states that 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 ut supra determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Function and will be implemented through the Central Bank of Ecuador;

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

That, in numeral 15 of Article 47.6 of the Code ibid, it is stated as a function of the Monetary Policy and Regulation Board: "(…) 15. Establish and regulate the functioning of committees that may be necessary for the functioning of the Bank (…)";

That, Article 128 of the Organic Administrative Code determines: "It is any unilateral declaration made in the exercise of an administrative competence that produces general legal effects, which is not exhausted with its compliance and directly";

That, the Monetary Policy and Regulation Board, through Resolution No. JPRM-2023-011-G, of May 30, 2023, issued the "Regulation on the formation and functioning of the institutional committees of the Central Bank of Ecuador";

That, literal i) of Article 8 of Resolution No. JPRM-2023-011-G provides: "The public servant appointed as secretary of the committee shall have the following responsibilities: (…) i) Maintain and safeguard the magnetic or physical archive of the minutes of sessions; as well as, the register of the summons to the sessions held, recordings and other documentation concerning the committee (…)";

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That, Article 22 of the aforementioned resolution establishes the functions of the Asset and Liability Committee, among which is: "c) Be informed of the results of the management of gold commercialization";

That, Article 29 of the aforementioned resolution establishes the composition of the Monetary and Financial Stability Committee;

That, numeral 6 of the Fourth Transitional Provision of the same resolution, provided: "FOURTH.- Within a period of one (1) month, the General Manager of the Central Bank of Ecuador must expressly repeal the following administrative resolutions: (…) 6. Reserved Administrative Resolution No. BCE-GG-101-2019, of August 29, 2019, which contains the 'Regulation on the formation of the Gold Commercialization Management Committee and its reserved functioning'; and, its reform contained in the Reserved Administrative Resolution No. BCE-GG-022-2022, of November 30, 2020; (…)";

That, Article 9 of Resolution No. JPRM-2023-009-M, of April 6, 2023, issued by this Monetary Policy and Regulation Board, which contains the "Policy for the commercialization of gold acquired by the Central Bank of Ecuador from artisanal and small-scale miners", establishes: "The fair purchase price of Non-Monetary Gold from artisanal and small-scale miners will be defined by the Central Bank of Ecuador, considering international reference prices published in specialized systems contracted by the institution, to which a discount will be applied that incorporates costs related to the purchase and sale, as well as, the sensitivity of the gold price";

That, it is necessary to reform Resolution No. JPRM-2023-011-G, which contains the "Regulation on the formation and functioning of the institutional committees of the Central Bank of Ecuador", in order to incorporate changes that allow improving the functioning of the Asset and Liability Committee and the Monetary and Financial Stability Committee; as well as, allow clarifying the scope of the custody function of the committee secretaries; and, the correct identification of the reserved administrative resolution No. BCE-GG-022-2020, of November 30, 2020, which corresponds to its repeal;

That, the Monetary Policy and Regulation Board, in ordinary session, by in-person modality, on September 28, 2023, reviewed the proposal sent via memorandum No. BCE-BCE-2023-0225-M, of September 17, 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-DGDA-120-2023-IF, of August 28, 2023; the technical report No. BCE-DNRO-2023-115, of September 5, 2023; and, the legal report No. BCE-CGJ-059-2023, of September 13, 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:

REFORM THE REGULATION ON THE FORMATION AND FUNCTIONING OF THE INSTITUTIONAL COMMITTEES OF THE CENTRAL BANK OF ECUADOR, CONTAINED IN RESOLUTION No. JPRM-2023-011-G

Article 1.- Substitute literal i) of Article 8 of Resolution No. JPRM-2023-011-G, of May 30, 2023, with the following text:

"i) Maintain and safeguard the magnetic or physical archive of the minutes of sessions; as well as, the register of the summons to the sessions held and other documentation concerning the committee;".

Article 2.- Substitute Article 22 of Resolution No. JPRM-2023-011-G, of May 30, 2023, with the following text:

"Article 22.- Functions.- The Asset and Liability Committee shall have the following functions: a) Be informed of the results of the execution of investment strategies for the portfolios of the External Assets of the International Reserves and the forecasts of the evolution of international financial markets; b) Be informed of the results of the management of the collection of the Central Bank of Ecuador's local portfolios; c) Be informed of the results of the management of gold commercialization; d) Be informed of the discount methodology to be applied in the purchases of Non-monetary Gold, as well as the results of its application; e) Be informed about the rating of direct and indirect investment counterparties, international refineries of Non-Monetary Gold, and the authorization of economic agents for the commercialization of Non-Monetary Gold; f) 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 titles, open market operations, rediscount window, and be informed of the results of their application; g) Be informed of the proposed letter of credit structures and their associated costs;

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h) Be informed of reports on the administration and programming of monetary species; i) Be informed of and approve the proposal for the programming of the issuance of national fractional currency; j) Resolve on the activation of the liquidity contingency plan and its termination; and, bring it to the knowledge of the Monetary Policy and Regulation Board, in accordance with the regulations issued for this effect; k) Be informed of the results of the application of the liquidity contingency plan; l) Be informed monthly of the financial statements of the Central Bank of Ecuador; and, m) Be informed or resolve, as appropriate, regarding other aspects related to the committee's scope of competence".

Article 3.- Substitute Article 29 of Resolution No. JPRM-2023-011-G, of May 30, 2023, with the following text:

"Article 29.- Members: The Monetary and Financial Stability 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. Deputy Manager of Programming and Regulation;
4. Deputy Manager of Services;
5. Deputy Manager of Operations;
6. National Director of Systemic Risk, who shall act with voice only;
7. National Director of Operational Risks, who shall act with voice only;
8. National Director of Financial Security, who shall act with voice only;
9. General Legal Coordinator, or their delegate, who shall act with voice only; and,
10. Delegate of the Monetary Policy and Regulation Board, who shall act with voice only."

Article 4.- Substitute numeral 6 of the Fourth Transitional Provision of Resolution No. JPRM-2023-011-G, of May 30, 2023, with the following text:

"6. Reserved Administrative Resolution No. BCE-GG-101-2019, of August 29, 2019, which contains the 'Regulation on the formation of the Gold Commercialization Management Committee and its reserved functioning'; and, its reform contained in the reserved administrative resolution No. BCE-GG-022-2020, of November 30, 2020;"

FINAL PROVISION. - This resolution shall enter into force from its issuance, without prejudice to its publication in the Official Register.

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Entrust its publication on the institutional website to the Document Management and Archive Directorate of the Central Bank of Ecuador.

NOTIFY AND PUBLISH. - Given in the Metropolitan District of Quito, on September 28, 2023.

THE PRESIDENT Dr. TATIANA MARIBEL RODRÍGUEZ CERÓN

The aforementioned resolution was signed by Dr. Tatiana Maribel Rodríguez Cerón - President of the Monetary Policy and Regulation Board, in the Metropolitan District of Quito, on September 28, 2023.- I CERTIFY.

ADMINISTRATIVE SECRETARY Att. MARÍA ALEXANDRA GUERRERO DEL POZO