JPRF-F-2024-0118 — Reform to Strengthen the Regulatory Framework for Liquidations of Popular and Solidarity Economy Sector Financial Entities

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-2024-0118 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That, Article 82 of the Constitution of the Republic of Ecuador recognizes the right to legal security, which is based on respect for the Constitution and the existence of prior, clear, public legal norms applied by competent authorities; That, Article 226 of the Magna Carta incorporates the principle of legality, understanding that State institutions, their agencies, dependencies, public servants, and persons acting by virtue of a state power shall exercise only the competencies and faculties attributed to them by law; That, Article 232 of the Fundamental Norm prohibits public servants from acting in cases where their interests conflict with those of the organism or entity in which they provide their services; That, Article 311 of the Supreme Norm determines that the popular and solidarity financial sector shall be composed of savings and credit cooperatives, associative or solidarity entities, communal banks and savings banks; That, Article 7 of the Organic Monetary and Financial Code, Book I, prohibits public servants of regulatory or control entities from acting in cases where their interests conflict with those of the organism or entity in which they provide their services or where a fact causing a conflict of interest is evident or arises; That Article 13 of the Organic Monetary and Financial Code, Book I, creates the Financial Policy and Regulation Board, part of the Executive Function, as a public law legal person, with administrative, financial, and operational autonomy; That, Article 14.1 of the aforementioned Code determines that, for the performance of its functions, the Financial Policy and Regulation Board has the faculty to regulate the creation, constitution, organization, activities, operation, and liquidation of financial, securities, insurance, and prepaid comprehensive health care service entities; and to exercise the other functions, duties, and faculties assigned to it by law; That, Article 312 of the aforementioned Organic Code collects the functions of the liquidator and determines that the latter shall not carry out new financial activities related to the social object of the entity, nor acquire, directly or indirectly, the assets of the financial entity in liquidation. This prohibition extends to the spouse, cohabitant, and relatives within the fourth degree of consanguinity or second degree of affinity; That, Article 315 aforementioned determines on the Priority of payments in forced liquidation; No. 8 The rest of the liabilities for funds received by the financial entity under legally accepted modalities not covered by the previous items, with the exception of deposits from those who have credits or other assets linked to the entity in liquidation (...); and No. 11 Other liabilities, according to the order and form determined in the Civil Code, and the unclaimed values of the previous items, within three months of notification of the call for payment (...); That, the Technical Secretary, in charge, of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0079-M of August 15, 2024, submits to the President of the Board the Technical Report No. JPRF-CTSF-2024-006 and the Legal Report No. JPRF-CJF-2024-039, both dated August 14, 2024, as well as the respective draft resolution;

Resolution No. JPRF-F-2024-0118 Page 2 of 3

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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 August 15, 2024, and carried out via video conference on August 16, 2024, reviewed the Memorandum No. JPRF-ST-2024-0079-M of August 15, 2024, issued by the Technical Secretary, in charge, of the Board; as well as the Technical Report No. JPRF-CTSF-2024-006 and the Legal Report No. JPRF-CJF-2024-039, both dated August 14, 2024, issued by the Technical Coordination of Financial System Policy and Regulation and by the Legal Coordination of Financial Policy and Norms, and the corresponding draft resolution; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on August 15, 2024, and carried out via video conference on August 16, 2024, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: ARTICLE FIRST.- In article 284 of Section XIII "Norm regulating the liquidations of entities of the popular and solidarity financial sector, subject to the control of the Superintendence of the Popular and Solidarity Economy", of Chapter XXXVI "Popular and Solidarity Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, insert number 6 and renumber the following:

"(...) 6. The normative prohibitions provided for in the Organic Monetary and Financial Code and in this Codification, to participate in the public offer of assets of an entity in forced liquidation; and,"

ARTICLE SECOND.- Add after article 285 of Section XIII "Norm regulating the liquidations of entities of the popular and solidarity financial sector, subject to the control of the Superintendence of the Popular and Solidarity Economy", of Chapter XXXVI "Popular and Solidarity Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following article:

"Art. 285.1.- Liquidators of entities shall abstain from receiving offers for the acquisition of unrealized assets presented by:

1. Their relatives within the fourth degree of consanguinity and second degree of affinity;
2. Legal entities in which the liquidator and their relatives within the fourth degree of consanguinity and second degree of affinity, have participation as partners or shareholders;
3. Natural persons who have been hired during the liquidation process, as well as their relatives within the fourth degree of consanguinity and second degree of affinity; and,
4. Legal entities that have been hired during the liquidation process, as well as their partners or shareholders and their relatives within the fourth degree of consanguinity and second degree of affinity."

Resolution No. JPRF-F-2024-0118 Page 3 of 3

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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 | ARTICLE THIRD.- Add the following General Provision in Section XIII "Norm regulating the liquidations of entities of the popular and solidarity financial sector, subject to the control of the Superintendence of the Popular and Solidarity Economy", Chapter XXXVI "Popular and Solidarity Financial Sector", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions:

"FOURTH.- The Superintendence of the Popular and Solidarity Economy will update its control norm as appropriate for the compliance with this section." GENERAL PROVISIONS FIRST.- The corresponding control body will coordinate with its controlled entities regarding the content of this Resolution. SECOND.- In case of doubt regarding the content or scope of the provisions of this Resolution, it will be resolved by the respective control body, within the scope of its competencies. FINAL PROVISION.- This Resolution will enter into force from the present date, without prejudice to its publication in the Official Register, and will 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 August 16, 2024. THE PRESIDENT, Master 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 August 16, 2024.- I CERTIFY. TECHNICAL SECRETARY, IN CHARGE Master Luis Alfredo Olivares Murillo