JPRF-F-2024-0135 — Reforms to the Section 'General Rules for the Operation of the Deposit Insurance System of the Private Financial Sector and the Popular and Solidarity Financial Sector'

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-2024-0135
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That Article 132, number 6 of the Constitution of the Republic of Ecuador grants public control and regulatory bodies the authority to issue general rules in matters within their competence, without altering or innovating legal provisions; That Article 226 of the Fundamental Norm mandates that State institutions, their bodies, dependencies, 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 ibidem states that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, participation, and others; That Article 308 of the Constitution of the Republic of Ecuador prescribes that Financial Activities are a matter of public order. Furthermore, it states that these activities shall have the purpose of preserving deposits and meeting financing requirements for the achievement of the country's development objectives; That Article 309 of the Fundamental Norm indicates that “the National Financial System is composed of the public, private, and popular and solidarity sectors (…)”. Each of these sectors will have specific and differentiated regulatory and control bodies, responsible for preserving their safety, stability, transparency, and solidity; That Article 13 of the Organic Monetary and Financial Code, Book I, created the Financial Policy and Regulation Board, as part of the Executive Function and as a public law entity, responsible for formulating credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; That numbers 2 and 3 of Article 14 of the Organic Code stipulate that the Financial Policy and Regulation Board has the competence to: “2. Issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and prepaid comprehensive health care services systems, in accordance with what is provided in Article 309 of the Constitution of the Republic of Ecuador; 3. Issue micro-prudential regulations for the national financial, securities, insurance, and prepaid comprehensive health care services sectors, based on proposals presented by the respective superintendencies, within their respective scopes of competence and without prejudice to their independence”; That Article 14.1 of the aforementioned Organic Code orders the Financial Policy and Regulation Board to fulfill the following faculties, among which are: “13. Issue secondary regulation related to Deposit Insurance, Liquidity Fund, and Private Insurance Fund; (…) 27. Exercise other functions, duties, and faculties assigned to it by this Code and the law. (…)”; That the penultimate paragraph of Article 14.1 ibidem provides that the Superintendent of Banks, the Superintendent of Companies, Securities and Insurance, the Superintendent of Popular and
Solidarity Economy, the President of the Monetary Policy and Regulation Board, and the Deposit Insurance Corporation, Liquidity Fund, and Insurance Fund, through their legal representative, may propose regulatory projects for the consideration of the Financial Policy and Regulation Board with the support of respective technical reports; That Article 150 of the aforementioned Code prescribes that entities of the national financial system shall be subject to the regulation issued by the Financial Policy and Regulation Board; That Article 326 of the cited normative body stipulates that contributions to Deposit Insurance and the periodicity of their payment by entities of the private and popular and solidarity financial sectors shall be determined by the Monetary and Financial Policy and Regulation Board;

Resolution No. JPRF-F-2024-0135

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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 Article 328 of the Organic Monetary and Financial Code provides that the amount protected by Deposit Insurance for each natural or legal person shall be differentiated for each of the insured financial sectors; That General Provision Twenty-Ninth of the Organic Monetary and Financial Code, Book I, added by the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, provides that in existing legislation where reference is made to the “Monetary and Financial Policy and Regulation Board,” it shall be replaced by “Financial Policy and Regulation Board”; That Article 15 of the Organic Administrative Code recognizes the principle of responsibility, establishing that: “The State shall be liable for damages resulting from the lack or deficiency in the provision of public services or the actions or omissions of its public servants or subjects of private law acting in the exercise of a public power delegated by the State and their dependents, controlled entities, or contractors”; That Article 15 of Subsection IV “Sources of Resources of the Deposit Insurance System and Payment of Contributions”, Section I “General Rules for the Operation of the Deposit Insurance System of the Private Financial Sector and the Popular and Solidarity Financial Sector”, Chapter XXVIII “On Deposit Insurance”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, was reformed by Resolution No. JPRF-F-2023-094 of December 29, 2023, by the Financial Policy and Regulation Board; That Article 24 of Subsection IV “Sources of Resources of the Deposit Insurance System and Payment of Contributions”, Section I “General Rules for the Operation of the Deposit Insurance System of the Private Financial Sector and the Popular and Solidarity Financial Sector”, Chapter XXVIII “On Deposit Insurance”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, was reformed by Resolution No. JPRF-F-2022-038 of September 29, 2022, by the Financial Policy and Regulation Board; That the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0114-M of December 27, 2024, submitted to the Acting President of the Board, Technical Report No. JPRF-CTSF-2024-015 issued by the Technical Coordination of Financial Policy and Regulation and Legal Report No. JPRF-CJF-2024-064, issued by the Legal Coordination of Financial Policy and Norms, both dated December 27, 2024; as well as the draft resolution; That the Financial Policy and Regulation Board, in a reserved in-person ordinary session held on December 31, 2024, reviewed Memorandum No. JPRF-ST-2024-0114-M of December 27, 2024, issued by the Technical Secretary of the Board; as well as the aforementioned reports from the Technical Coordination of Financial Policy and
Regulation and the Legal Coordination of Financial Policy and Norms, in addition to the corresponding Draft Resolution; That the Financial Policy and Regulation Board, in a reserved in-person ordinary session held on December 31, 2024, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES:
ARTICLE ONE.- Substitute Article 15 of Paragraph I “Contributions for Deposit Insurance Premiums of the Private Financial Sector”, of Subsection IV “Sources of Resources of the Deposit Insurance System and Payment of Contributions”, Section I “General Rules for the Operation of the Deposit Insurance System of the Private Financial Sector and the Popular and Solidarity Financial Sector”, Chapter XXVIII “On Deposit Insurance”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text:

Resolution No. JPRF-F-2024-0135

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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 15.- Fixed Premium.- For the year 2025, a fixed premium of 0.09% annually shall be charged, based on the contribution calculation base established in accordance with the preceding Article.
This premium percentage shall be reviewed annually by the Financial Policy and Regulation Board based on the report sent by the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund (COSEDE), by November, or if necessary, at any time, for extraordinary causes.”
ARTICLE TWO.- Substitute Article 24 of Paragraph IV “Target Fund”, of Subsection IV “Sources of Resources of the Deposit Insurance System and Payment of Contributions”, Section I “General Rules for the Operation of the Deposit Insurance System of the Private Financial Sector and the Popular and Solidarity Financial Sector”, Chapter XXVIII “On Deposit Insurance”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text:
“Article 24.- Target Fund of the Deposit Insurance System of the Private Financial Sector.- The target level of the Deposit Insurance System of the Private Financial Sector is fixed at 18.85% of covered deposits (fund equity/covered deposits), and shall be reviewed annually by the Financial Policy and Regulation Board based on the report sent for this purpose by the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund (COSEDE). In the event that the ratio between the equity of the Deposit Insurance System of the Private Financial Sector and the covered deposits of said sector results in less than or equal to 13%, the collection of the fixed premium of 0.6% annually shall be automatically reactivated until the target level is reached. At all times, the contribution of the risk-adjusted premium (PAR) shall be maintained.” FINAL PROVISION. - This Resolution shall enter into force from this date, without prejudice to its publication in the Official Register, and shall be published on the 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 December 31, 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 December 31, 2024.- I CERTIFY. TECHNICAL SECRETARY, Master Luis Alfredo Olivares Murillo