Resolution No. JPRF-F-2024-0101 Amending the Final Provision of Resolution No. JPRF-F-2024-0100

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Governmental Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Resolution No. JPRF-F-2024-0101 FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That Article 226 of the Constitution of the Republic of Ecuador prescribes that state institutions, their agencies, dependencies, public services, and persons acting by virtue of state authority shall exercise only the competencies and powers attributed to them in the Constitution and the law; That Article 227 of the Supreme Norm prescribes that public administration constitutes a service of the community governed, among other principles, by efficacy, efficiency, and quality; That Article 308 of the Magna Carta determines that financial activities are a matter of public order and may be exercised with prior state authorization, in accordance with the law; and their fundamental purpose is to preserve deposits and meet financing requirements to achieve the country's development objectives; That Article 309 of the Fundamental Norm states that the national financial system is composed of the public, private, and popular and solidary sectors, which intermediated public resources; each of these sectors will have specific and differentiated autonomous control norms and entities, responsible for preserving their security, stability, transparency, and solidity; That the Article numbered after Article 6 of the Organic Code of Money and Finance, Book I, prescribes that: “Organisms with regulatory, normative, or control capacity shall seek to adopt international technical standards related to the scope of their competence as a reference framework for the issuance of regulations and the exercise of their functions, strictly adhering to the normative hierarchy established in the Constitution of the Republic of Ecuador.”; That Article 13 ibidem, reformed by the Organic Law Reforming the Organic Code of Money and Finance for the Defense of Dollarization, published in the Official Register Supplement No. 443 of May 3, 2021, created the Financial Policy and Regulation Board, part of the Executive Function, as a public law legal entity, with administrative, financial, and operational autonomy, responsible for formulating credit, financial, securities, insurance, and prepaid comprehensive health care service policy and regulation; That Article 14 of the cited Code determines that, within the scope of competencies of the Financial Policy and Regulation Board, it corresponds to formulate financial policy; issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial system; and also, issue micro-prudential regulations for the national financial sector, based on proposals presented by the respective superintendencies, within their scopes of competence and without prejudice to their independence; That Article 14.1 ut supra, in number 7, letters b) and d), states that it corresponds to the Financial Policy and Regulation Board to fulfill the duty and exercise the faculty to issue the prudential regulatory framework to which financial entities must adhere, a framework that must be coherent, not give rise to arbitrary arbitrage, and must establish “minimum capital levels; technical equity and risk-weighted asset ratios, their composition, method of calculation, and modifications”; as well as “levels of concentration of credit and financial operations: and, applicable provisions, to the aforementioned operations”;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Governmental Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That Articles 150 and 151 of the aforementioned normative body determine that financial entities will be subject to the regulation issued by the Financial Policy and Regulation Board, which must recognize the nature and particular characteristics of each of the sectors of the national financial system; That Article 160 ibidem establishes that the national financial system is integrated by the public financial sector, the private financial sector, and the popular and solidary financial sector; That Article 444 of the cited Code and Article 144 of the Organic Law of Popular and Solidary Economy dispose that popular and solidary financial entities are subject to the regulation of the Financial Policy and Regulation Board and the control of the Superintendency of Popular and Solidary Economy; That Article 190 of the Organic Code of Money and Finance, Book I, refers to the solvency and technical equity of entities of the national financial system, financial groups, and popular and solidary groups; That the Twenty-Ninth General Provision ut supra, added by the Organic Law Reforming the Organic Code of Money and Finance for the Defense of Dollarization, disposes: “In the current legislation where mention is made of the ‘Board of Monetary and Financial Policy and Regulation’, replace it with ‘Financial Policy and Regulation Board’;” That, through Resolution No. JPRF-F-2023-071 of June 30, 2023, the Financial Policy and Regulation Board reformed Chapter VIII “Relationship between total technical equity and assets and contingencies weighted by risk of entities of the public and private financial system”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions; That the Financial Policy and Regulation Board, in Extraordinary Session No. 010/2024 of February 29, 2024, approved and issued Resolution No. JPRF-F-2024-0100 regarding the reform to Section III “Constitution of Total Technical Equity”, Chapter VIII “Relationship between Total Technical Equity and Assets and Contingencies Weighted by Risk for Entities of the Public and Private Financial System”; and to Subsection II “Technical Equity and Assets Weighted by Risk”, Section VI “Solvency, Technical Equity, and Assets and Contingencies Weighted by Risk Norm for Savings and Credit Cooperatives, Central Savings and Credit Boxes, and Mutual Associations for Savings and Credit for Housing”, Chapter XXXVI “Popular and Solidary Financial Sector”, contained in Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions; That the Technical Secretariat of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0026-M of March 4, 2024, submits to the President of the Board the Legal Report No. JPRF-CJF-2024-011 of March 4, 2024, issued by the Legal Coordination of Financial Policy and Norms; That the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on March 4, 2024, on March 5, 2024, reviewed the Memorandum No. JPRF-ST-2024-0026-M, issued by the Technical Secretariat of the Board; as well as Legal Report No. JPRF-CJF-2024-011, in addition to the corresponding resolution project;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Governmental 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 4, 2024, on March 5, 2024, reviewed the Memorandum No. JPRF-ST-2024-0026-M, issued by the Technical Secretariat of the Board; as well as Legal Report No. JPRF-CJF-2024-011, in addition to the corresponding resolution project; That the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on March 4, 2024, on March 5, 2024, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: SINGLE ARTICLE.- The text of the Final Provision of Resolution No. JPRF-F-2024-0100 of February 29, 2024, is substituted by the following: “FINAL PROVISION.- This Resolution shall enter into force as of this date, without prejudice to its publication in the Official Register, and shall be published on the institutional website of the Financial Policy and Regulation Board within a maximum term of two days from its issuance.” FINAL PROVISION.- This Resolution shall enter into force as of this date, without prejudice to its publication in the Official Register, and shall be published on the institutional website of the Financial Policy and Regulation Board within a maximum term of two days from its issuance. NOTIFY.- Given in the Metropolitan District of Quito, on March 5, 2024. THE PRESIDENT, Mgs. 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 March 5, 2024.- I CERTIFY. TECHNICAL SECRETARY, Mgs. Nelly Arias Zavala