Resolution JPRFM-2025-017-G: Replacing Chapter II "Regulations of the Audit Committee of the Central Bank of Ecuador"

RESOLUTION No. JPRFM-2025-017-G THE FINANCIAL AND MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

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

That, Article 227 of the same Constitution 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 of the Constitution determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Branch and will be implemented through the Central Bank of Ecuador;

That, on October 13, 2025, the Organic Law Reforming the Organic Monetary and Financial Code was published in the Sixth Supplement of the Official Register No. 142;

That, Article 13 of the Organic Monetary and Financial Code creates the Financial and Monetary Policy and Regulation Board, part of the Executive Branch, as an organ with functional, technical, and institutional autonomy, and in its decisions, responsible for the formulation of monetary, credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation. The Financial and Monetary Policy and Regulation Board will be the highest governing body of the Central Bank of Ecuador;

That, Article 17 of the aforementioned Code, in its pertinent part, determines that:

"(...) 9. Exercise the other functions, duties, and powers assigned to it by this Code and the law, within the scope of its management. For the fulfillment of these functions, the Board will issue regulations in matters within its competence, without altering legal provisions. The Financial and Monetary Policy and Regulation Board may issue regulations by segments, economic activities, and other criteria. It may even reform or repeal regulations from the former Monetary Policy and Regulation Board, Financial Policy and Regulation Board, or Monetary and Financial Policy and Regulation Board.

RESOLUTION No. JPRFM-2025-017-G Page | 2 All norms and policies issued by the Financial and Monetary Policy and Regulation Board in the exercise of its functions, duties, and powers must be backed by technical and legal reports duly substantiated (...)";

That, Article 24 of the same Code provides that the acts of the Financial and Monetary Policy and Regulation Board enjoy the presumption of legality and will be expressed through resolutions that will have mandatory force, which will govern from their publication in the Official Register, or from the date of their issuance when so determined by the Board, in accordance with the subject matter;

That, Article 25.2 aforementioned determines that the Technical Secretariat of the Financial and Monetary Policy and Regulation Board is exercised by the Central Bank of Ecuador, and Article 25.3 establishes as its functions the preparation of technical and legal reports supporting regulation proposals, providing technical and administrative support to the Financial and Monetary Policy and Regulation Board, and those assigned by said Board;

That, Article 57.2 of the aforementioned Code provides that the Financial and Monetary Policy and Regulation Board will designate and determine the functions of the Audit Committee. Said Committee will be composed of three (3) members, one of whom will be a member of the Financial and Monetary Policy and Regulation Board, who will preside over it, while the other two (2) will be designated by the Board itself. The Financial and Monetary Policy and Regulation Board will approve the regulations of the Audit Committee, in which its attributes and functions will be detailed;

That, General Provision Twenty-Ninth of the same Code states: "In current legislation where mention is made, indistinctly, of the Monetary and Financial Policy and Regulation Board, the Monetary Policy and Regulation Board; or, the Financial Policy and Regulation Board, replace and understand as 'Financial and Monetary Policy and Regulation Board'";

That, through Resolution No. JPRM-2025-007-G, of July 16, 2025, the then Monetary Policy and Regulation Board issued the "Codification of Governance Resolutions of the Monetary Policy and Regulation Board and the Central Bank of Ecuador", which includes Title I "Functioning of the Monetary Policy and Regulation Board", within which Chapter II "Regulations of the Audit Committee of the Central Bank of Ecuador" is contained;

That, it is necessary to reform the Codification of Governance Resolutions of the Financial and Monetary Policy and Regulation Board, regarding Chapter II containing the Regulations of the Committee, in order to conform to the modifications introduced by the Organic Law Reforming the Organic Monetary and Financial Code;

That, the First Transitional Provision of the Organic Law Reforming the Organic Monetary and Financial Code determines that the members of the Financial and Monetary Policy and Regulation Board, sworn in on September 16, 2025, by the National Assembly, will continue to exercise their functions for the periods for which they were designated and will maintain their labor continuity and acquired rights;

That, through Letter No. T.233-SGJ-25-098, of September 5, 2025, signed by the Constitutional President of the Republic, addressed to the President of the National Assembly, the list of candidates for the designation of the Members of the Financial and Monetary Policy and Regulation Board was sent; as well as, the temporality of their stay within the initial period;

That, the Plenary of the National Assembly, on September 16, 2025, designated and swore in the members of the Financial and Monetary Policy and Regulation Board, in the persons of: Gustavo Estuardo Camacho Dávila; Silvia Daniela Moya Arteta; Roberto Javier Basantes Romero; María Isabel Camacho Cárdenas; and, Jeniffer Nathaly Rubio Abril;

That, the Financial and Monetary Policy and Regulation Board, through ordinary session No. 008-2025, in person, on December 23, 2025, reviewed the proposal sent via Memorandum No. BCE-BCE-2025-0332-M, of December 19, 2025, by the General Manager of the Central Bank of Ecuador to the President of the Financial and Monetary Policy and Regulation Board; as well as, the Legal Report No. BCE-GJ-069-2025, of December 19, 2025; and,

In exercise of its functions and in accordance with Article 24 of the Organic Monetary and Financial Code, the Financial and Monetary Policy and Regulation Board,

RESOLVES:

Article 1.- Replace Chapter II "Regulations of the Audit Committee of the Central Bank of Ecuador", of Title I "Functioning of the Monetary Policy and Regulation Board" of the "Codification of Governance Resolutions of the Monetary Policy and Regulation Board and the Central Bank of Ecuador", with the following text:

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"CHAPTER II REGULATIONS OF THE AUDIT COMMITTEE OF THE CENTRAL BANK OF ECUADOR

SECTION 1 OBJECT AND SCOPE

Article 28.- Object: Establish the regulations governing the formation, attributes, responsibilities, and functions of the Audit Committee of the Central Bank of Ecuador; as well as, its relations with Bank Audit, External Audit, the Internal Control System, and Risk Management; and, its advisory role with the Financial and Monetary Policy and Regulation Board.

Article 29.- Scope: The provisions established in these Regulations are applicable to the Audit Committee and to all servants and workers of the Central Bank of Ecuador who intervene or are linked to the management of said Committee.

SECTION 2 AUDIT COMMITTEE

Article 30.- Audit Committee: It is the advisory and consultation body of the Financial and Monetary Policy and Regulation Board, to which it will assist in the monitoring of financial reports, Bank Audit, external audit, governance management, risk management, regulatory compliance, and the internal control system of the Central Bank of Ecuador.

For the exercise of its functions, the Committee will have unrestricted access to the information, records, data, and reports of the Central Bank of Ecuador that it considers necessary. In this regard, the servants and workers of the Central Bank of Ecuador must provide the information required by said Committee.

The Audit Committee, jointly with the Bank Audit Directorate, will prepare an annual work plan that includes the activities necessary for the fulfillment of its functions.

Article 31.- Composition of the Audit Committee: The Audit Committee will be composed of three (3) members with voice and vote, full-time. One (1) of them will be a member of the Financial and Monetary Policy and Regulation Board, who will exercise the Presidency of the Committee. The other two (2) members will be designated by the aforementioned Board and must have relevant experience in accounting or auditing and meet the requirements established in these regulations.

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By invitation of the Audit Committee, other officials of the Financial and Monetary Policy and Regulation Board or servants of the Central Bank of Ecuador may attend Committee sessions, without the right to vote.

The Audit Committee will report quarterly to the Financial and Monetary Policy and Regulation Board on the results of its management, without prejudice to doing so when said collegiate body so requires.

Article 32.- Duration in the exercise of their functions: The members of the Audit Committee will perform their functions for a period of two (2) years, which may be renewed once for the same period, prior to a performance evaluation carried out by the Financial and Monetary Policy and Regulation Board.

The member belonging to the Financial and Monetary Policy and Regulation Board while in office of said organ will be part of the Audit Committee.

Article 33.- Requirements to be a member of the Audit Committee: To be designated as members of the Audit Committee, other than the President thereof, candidates must meet, prior to their designation, the following requirements:

1. Hold a third-level professional degree in accounting or auditing;
2. Accredit relevant experience in accounting or auditing, and in related matters connected with the exercise of the Committee's functions, of at least ten (10) years of professional practice or university teaching;
3. Have experience in the application of international financial reporting standards and international auditing standards;
4. Not be involved in conflicts of interest, in accordance with what is determined in the Organic Monetary and Financial Code;
5. Not be under civil interdiction, nor be a debtor subject to creditor proceedings, and not be in a state of declared judicial insolvency;
6. Not have received a final conviction sentence for criminal offenses;
7. Not be a party or adherent to administrative or judicial processes against the Central Bank of Ecuador;
8. Not have impediment to exercise public office;
9. Not be a contractor of the Central Bank of Ecuador;
10. Not have been declared a failed bidder or non-compliant contractor with public sector entities, as a natural person or of legal entities they have represented;
11. Not appear on national and international lists of sanctioned persons for crimes related to money laundering, drug trafficking, or terrorism financing; and,
12. Declare that they know and accept the prohibitions and limitations regarding multiple employment and receiving additional remuneration or per diems, provided this does not interfere with the work schedule.

The compliance with the requirements determined in this article will be verified by the human talent and legal areas of the Central Bank of Ecuador, which will issue the corresponding qualification report. To this effect, these areas are authorized to request the information they consider pertinent.

Article 34.- Termination of the functions of the Committee Members: The functions of the members of the Audit Committee of the Central Bank of Ecuador will end, before the period for which they were designated, when they incur in the following causes:

1. Failure to meet one or more enabling requirements to be a member of the Committee;
2. Unjustified absence from two (2) consecutive sessions or three (3) sessions within the same economic year of the Audit Committee;
3. Failure to comply with what is established in the Code of Ethics issued by the Financial and Monetary Policy and Regulation Board and the Central Bank of Ecuador;
4. Incurring in a conflict of interest in the exercise of their functions;
5. Manifest negligence in the fulfillment of their assigned functions and attributes, determined by the Financial and Monetary Policy and Regulation Board;

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6. At the request of two members of the Financial and Monetary Policy and Regulation Board, whose decision must be adopted unanimously;
7. Due to permanent incapacity for the exercise of their functions declared by a judicial authority or the competent state organism;
8. Due to having a final conviction sentence for crimes punishable with deprivation of liberty;
9. Incurring in actions or omissions that repeatedly obstruct the normal functioning of the Audit Committee, the fulfillment of the Committee's functions, or institutional coordination with Bank Audit, External Audit, or the Financial and Monetary Policy and Regulation Board, duly motivated by the Board; and,
10. Due to voluntary resignation.

Once the Financial and Monetary Policy and Regulation Board verifies that any of the members of the Audit Committee has incurred in one of the causes provided for in this article, within a term of five (5) days, it will issue the corresponding resolution declaring the termination of the designation.

In case of termination of functions of a member of the Audit Committee, their replacement will exercise the functions until the termination of the period for which the outgoing member was designated.

When the termination of functions occurs due to voluntary resignation, the resigning member must remain in office for a maximum period of one (1) month or until legally replaced, whichever occurs first.

Article 35.- Of the remuneration of the members: The remuneration of the members of the Audit Committee corresponds to that provided for the hierarchical level scale five, in accordance with what is provided in the Organic Monetary and Financial Code and the resolution of the body in charge of remunerations.

The members of the Audit Committee, other than the President thereof, will be public servants hired full-time by the Central Bank of Ecuador and belonging to its payroll.

Article 36.- Functions of the Audit Committee: The Audit Committee will perform the following functions, which will be executed based on internal reports issued by the administrative units of the Central Bank of Ecuador, particularly by the Bank Audit Directorate, the content of which reports is the exclusive responsibility of their issuers.

1. Functions related to Financial Statements:

a) Monitor the compliance of the financial statements of the Central Bank of Ecuador with the Organic Monetary and Financial Code, as well as with national and international accounting standards applicable to the Institution, in accordance with the provisions issued by the Financial and Monetary Policy and Regulation Board. To this effect, review the findings and observations formulated by External Audit and Bank Audit;

b) Monitor the financial statements of the Central Bank of Ecuador, prior to their presentation and approval by the Financial and Monetary Policy and Regulation Board, in order to verify that said financial statements have been reviewed by the Bank Audit Directorate and external audit, through the different reports and reports they have issued;

c) Analyze and report to the Financial and Monetary Policy and Regulation Board the results of the review of the observations, reports, and meetings held with external and bank auditors regarding the financial statements, highlighting, if applicable, the existence of complex, special, or unusual transactions that have been identified; and,

d) Require, when appropriate, the performance of specific reviews by Bank Audit, regarding which the Committee will present its opinion and recommendation to the Financial and Monetary Policy and Regulation Board on the results obtained;

2. Functions related to the Bank Audit Directorate:

a) Propose to the Financial and Monetary Policy and Regulation Board the candidates for the position of Director of Bank Audit, for their consideration and designation, who must meet the requirements established in the Internal Audit Policy of the Central Bank of Ecuador;

b) Propose to the Financial and Monetary Policy and Regulation Board the attributes, responsibilities, and functions of the Director of Bank Audit, which must be part of the Organizational Management by Processes Statute; as well as, the Internal Audit Policy of the Central Bank of Ecuador and perform reviews and recommendations in case of changes, if necessary;

c) In case of non-compliance with functions by the Director of Bank Audit, present to the Financial and Monetary Policy and Regulation Board a report with the corresponding recommendations;

d) Ensure the functional independence and monitor the effectiveness of the Bank Audit Directorate;

e) Require the Bank Audit Directorate, at any time, specific reviews on situations that, in the opinion of the Audit Committee, are necessary, or that are requested by the Financial and Monetary Policy and Regulation Board or by the Manager of the Central Bank of Ecuador;

f) Review, make suggestions, and approve the Annual Plan of the Bank Audit Directorate, by December 31 of the year prior to its execution. Ensure that the plan addresses the main areas of governance, risks, and control with prioritization criteria, considering the fulfillment of institutional objectives, control priorities, the availability of financial and technological resources; as well as, transparency, competence, and efficiency of human resources. If deemed pertinent, review the scope and procedures applied in specific reviews, in order to issue recommendations within international best practices;

g) Monitor the compliance with the recommendations of the Bank Audit Directorate, external audit, control bodies, or others, in order to verify that appropriate and timely measures have been taken, especially in significant findings;

h) Review the observations, supervise the compliance and remediation of findings of external auditors, bank audit, as well as the findings, observations, and recommendations of other control bodies, homologous bodies, or international bodies on matters related to the

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financial situation of the Central Bank of Ecuador;

i) Review quarterly the progress and compliance of the annual work plan, if applicable, request the clarifications that are necessary or know the adjustments to it;

j) Know, suggest, and approve reforms to the Annual Plan of the Bank Audit Directorate;

k) Review, make suggestions, and approve the Strategic Plan of the Bank Audit Directorate as well as projects and initiatives aligned with it;

l) Know the annual report of the Director of Bank Audit which must include the fulfillment of objectives, performance measures, and the results of Bank Audit management, if applicable, request the clarifications deemed necessary;

m) Know the progress and results of the Quality Assurance and Improvement Program and the action plans defined to address the recommendations and improvement opportunities identified, at the request of the Committee members and/or through a report from the Director of Bank Audit; and,

n) Review the performance evaluation of the Director of Bank Audit, their qualifications and competencies, and formulate the corresponding recommendations based on the results obtained.

3. Functions related to External Audit:

a) Know and issue an opinion regarding the terms of reference for the selection of external auditors prepared by the Central Bank of Ecuador;

b) Propose to the Financial and Monetary Policy and Regulation Board a list of independent external auditors with recognized international experience in accordance with the requirements established in the External Auditor Hiring Standard of the Central Bank of Ecuador;

c) Know, verify, and report to the Financial and Monetary Policy and Regulation Board that the contracted external auditors comply with the established terms of reference, putting special emphasis on the scope and approach offered by external audit. To this effect, the Internal Bank Auditor, in their capacity as contract administrator, will periodically inform the Committee, or whenever there is any novelty during the execution of the contract, guaranteeing the execution of the audit and the results delivered;

d) Know the scope and audit approach proposed by external auditors, including coordination with bank audit activity;

e) Maintain meetings with external auditors during the work planning phase, the presentation of audited financial statements, and the discussion of the results of recommendations made;

f) Maintain scheduled meetings with external auditors, to discuss any sensitive matter, within the scope of their functions;

g) Monitor annually the performance of external auditors and formulate recommendations for hiring, continuity, or termination of the contract, in accordance with applicable regulations;

h) Monitor that external audit is executed in accordance with National and International Audit Standards

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