JPRM-2023-024-M — Reform to the Public Sector Deposits Standard

Resolution No. JPRM-2023-024-M THE MONETARY AND FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That, Article 226 of the Constitution of the Republic of Ecuador stipulates that public officials and persons acting under a state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law; That, Article 227 of the same instrument states that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others; That, paragraphs 2 and 3 of Article 302 of the Constitution of the Republic provide that monetary, credit, exchange, and financial policies, among others, have as their objective to establish levels of global liquidity that guarantee adequate margins of financial security and to direct liquidity surpluses toward the investment required for the country's development; 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 shall be implemented through the Central Bank of Ecuador; That, Article 40 of the Organic Monetary and Financial Code establishes: “Public resources of the institutions, agencies, and companies of the non-financial public sector shall be maintained on deposit at the Central Bank of Ecuador, in accordance with the regulations issued by the Monetary and Financial Policy and Regulation Board (…)”; That, Article 47.1 of the aforementioned Organic Code created the Monetary and Financial Policy and Regulation Board as part of the Executive Branch, responsible for the formulation of monetary policy, the highest governing body of the Central Bank of Ecuador, and determines its composition; That, Article 139 of the aforementioned Organic Code provides: “The returns from the investments made by the Central Bank of Ecuador with the funds of the Ecuadorian Social Security Institute shall be transferred monthly to said institution and shall not form part of the current income or profits of the Central Bank of Ecuador”;

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That, the Monetary and Financial Policy and Regulation Board, through Resolution No. JPRM-2022-004-M, dated January 28, 2022, issued the “Public Sector Deposits Standard,” reformed through Resolution No. JPRM-2022-011-M, dated March 11, 2022; That, Article 38 of the aforementioned resolution provides: “Remuneration shall be paid monthly and calculated based on the methodology approved by the General Management of the Central Bank of Ecuador. The remuneration shall be calculated considering the results generated by the total investments achieved by the available external assets for investment, prorated to the balance that each of the entities has in their accounts”; That, the Monetary and Financial Policy and Regulation Board, in an extraordinary session held virtually, on December 19, 2023, reviewed the request sent via Memorandum No. BCE-BCE-2023-0275-M, by the General Manager of the Central Bank of Ecuador to the President of the Monetary and Financial Policy and Regulation Board; as well as the technical report No. BCE-SGOPE-112-2023/ BCE-DNGR-326-2023, dated December 15, 2023; and the legal report No. BCE-CGJ-092-2023, dated December 15, 2023; and, In exercise of its functions and in accordance with Article 47.7 of the Organic Monetary and Financial Code, the Monetary and Financial Policy and Regulation Board, resolves:

REFORM THE PUBLIC SECTOR DEPOSITS STANDARD ISSUED THROUGH RESOLUTION NO. JPRM-2022-004-M, DATED JANUARY 28, 2022, AND REFORMED THROUGH RESOLUTION NO. JPRM-2022-011-M, DATED MARCH 11, 2022

Article 1.- Substitute Article 38 of Resolution No. JPRM-2022-004-M, dated January 28, 2022, with the following text: “Art. 38.- Remuneration shall be paid monthly and calculated based on the methodology approved by the General Management of the Central Bank of Ecuador. The remuneration shall be calculated considering the results generated in the Payment Funds and Liquidity tranches of the Available External Assets for Investment, prorated to the harmonic average balance that each of the entities deposited in their accounts, with respect to the harmonic average balance of the total monetary deposits received by the Central Bank of Ecuador.”

SINGLE TRANSITORY PROVISION. - Within five (5) days, counted from the date of issuance of this resolution, the Central Bank of Ecuador must adjust the methodology for calculating the returns established in Article 38 of this reform. Likewise, within sixty (60) days, it must update the respective information systems for the implementation of this reform.

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FINAL PROVISION. - This resolution shall enter into force from its issuance, without prejudice to its publication in the Official Register. It is entrusted to 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 December 19, 2023. THE PRESIDENT Dr. TATIANA MARIBEL RODRÍGUEZ CERÓN The aforementioned resolution was signed by Dr. Tatiana Maribel Rodríguez Cerón - President of the Monetary and Financial Policy and Regulation Board, in the Metropolitan District of Quito, on December 19, 2023.- I CERTIFY. ADMINISTRATIVE SECRETARY Attorney MARÍA ALEXANDRA GUERRERO DEL POZO