Resolution JPRF-V-2025-0148: Reforms to Title II 'Public Offering' and Title IX 'Special Stock Registry (REB)' of Book II 'Securities Market'

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Resolution No. JPRF-V-2025-0148 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That, Article 82 of the Constitution of the Republic of Ecuador prescribes that the right to legal security 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 Fundamental Norm stipulates 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 in the Constitution and the law; having the duty to coordinate actions to fulfill their purposes and make effective the enjoyment and exercise of rights recognized in the Constitution; That, Article 227 of the Magna Carta establishes that public administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, decentralization, coordination, participation, planning, transparency, and evaluation; That, Article 13 of the Organic Monetary and Financial Code, Book I, reformed by the enactment of the Organic Reform Law to the Organic Monetary and Financial Code for the Defense of Dollarization, 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 services policy and regulation; That, Article 14 ibidem, Book I, in numbers 1, 2, and 3, determines that, within the scope of the Financial Policy and Regulation Board, it corresponds to formulate policy on prepaid comprehensive health care services; as well as to issue regulations that allow maintaining the comprehensiveness, solidity, sustainability, and stability of the prepaid comprehensive health care services system; and to issue micro-prudential regulations for the prepaid comprehensive health care services sector, based on proposals presented by the respective superintendencies, within their respective scopes of competence and without prejudice to their independence; establishing that, for the fulfillment of these functions, the aforementioned Board will issue norms in matters within its competence, without being able to alter legal provisions; being able to issue regulations by segments, economic activities, and other criteria; That, the Organic Monetary and Financial Code, Book I, in its article 14.1, prescribes that, for the performance of its functions, the Financial Policy and Regulation Board must fulfill certain duties and exercise certain faculties; among which are those indicated in its numbers 1, 7, 9, 14 letter b, 25, and 27, which are: to regulate the creation, constitution, organization, activities, operation, and liquidation of securities entities; to issue the prudential regulatory framework to which securities entities must adhere; to issue the non-prudential regulatory framework for all securities entities; to authorize securities entities for new activities or operations that, without being prohibited, are necessary to fulfill the objectives of securities policy, according to the regulations issued for that effect; to apply the provisions of the aforementioned code and resolve cases not foreseen in it, within its scope of competence; and to exercise the other functions, duties, and faculties assigned to it by the Organic Monetary and Financial Code and the law, respectively; That, General Provision Twenty-Ninth of the Organic Monetary and Financial Code, Book I, prescribes: "In the current legislation where mention is made of the 'Monetary and Financial Policy and Regulation Board', replace it with 'Financial Policy and Regulation Board'; That, Transitory Provision Fiftieth-Fourth of the aforementioned norm establishes the Transitional Regime of Resolutions of the Codification of the Monetary and Financial Policy and Regulation Board, and states that the resolutions contained in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of the Monetary and Financial Policy and Regulation Board and the norms issued by control bodies will remain in force until the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board decide what corresponds, within the scope of their competencies;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That, Article 1 of the Organic Monetary and Financial Code, Book II "Securities Market Law" stipulates that its object is to promote an organized, integrated, effective, and transparent securities market, in which securities intermediation is competitive, orderly, equitable, and continuous, as a result of true, complete, and timely information. Regarding its scope of application, it mentions that it covers the securities market in its stock and over-the-counter segments, stock exchanges, trade associations, securities houses, fund and trust administrators, rating agencies, issuers, external auditors, and other participants who in any way act in the securities market, as well as the Financial Policy and Regulation Board and the Superintendency of Companies, Securities, and Insurance; That, the article added subsequently to article 1 ibidem provides for the guiding principles of the securities market, which aim to guide the conduct of the Financial Policy and Regulation Board and the Superintendency of Companies, Securities, and Insurance, being these: public faith; investor protection; transparency and publicity; symmetric, clear, true, complete, and timely information; free competition; equal treatment of market participants; the application of good corporate practices; respect and strengthening of the regulatory power of the Financial Policy and Regulation Board, subject to the Constitution of the Republic, public policies of the Securities Market, and the Law; and to promote financing and investment in the national development regime and a democratic, productive, efficient, and solidary market, which must always be interpreted in the sense that most favors the investor; That, regarding the extinct National Securities Council, the regulatory body referenced in the "Securities Market Law," it is pertinent to mention that the attributes assigned to it are currently under the responsibility of the Financial Policy and Regulation Board, by virtue of various legal reforms, such as, at first, the Organic Law for the Strengthening and Optimization of the Corporate and Stock Sector, published in the Official Register Supplement No. 249 of May 20, 2014, which determined that the attributes of this Council would pass to the then called Market Value Regulation Board. At a second stage, these attributes passed to the Monetary and Financial Policy and Regulation Board, by virtue of the enactment of the Organic Monetary and Financial Code, published in the Second Supplement of the Official Register No. 332 of September 12, 2014, with the insertion of General Provision Nineteenth in Book II, "Securities Market Law." Likewise, at a third stage, with the enactment of the Organic Reform Law to the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Official Register Supplement No. 443 of May 03, 2021, all these faculties of the extinct Monetary and Financial Policy and Regulation Board were assigned to the Financial Policy and Regulation Board as determined by its General Provision Twenty-Ninth of Book I; That, among the attributes of the extinct National Securities Council detailed in article 9, numbers 1, 4, 6, 8, 10, 13, 17, 19, 20, 21, and 25 of the Organic Monetary and Financial Code, Book II "Securities Market Law," which, as previously stated, currently correspond to the Financial Policy and Regulation Board, are the following: to establish the general policy of the securities market and regulate its functioning; to issue the resolutions necessary for the application of this Law; to regulate the creation and functioning of securities houses, compensation and settlement depositories, and the services they provide; to establish control and reserve constitution norms for issuers; to regulate the public offering of securities, establishing the minimum requirements that securities offered publicly must have; as well as the procedure for the information that must be disseminated to the public to adequately reveal the financial situation of issuers; to regulate registrations in the Public Registry of the Securities Market and its maintenance; to establish general policies for the supervision and control of the market, as well as promotion and training mechanisms; to authorize the related activities of stock exchanges and securities houses that are necessary for the adequate development of the securities market; to ensure compliance with the norms governing the securities market; to regulate concerning activities and operations of the securities market, accounting and operation registration systems, and other aspects of the conduct of market participants; and to establish the norms necessary to prevent cases of conflicts of interest and affiliation of market participants;

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That, Article 15 of the Organic Administrative Code, with reference to the principle of responsibility, provides that the State will respond for damages as a consequence of the lack or deficiency in the provision of public services or the actions or omissions of its public servants or subjects of private rights who act in the exercise of a public power by delegation of the State and its dependents, controlled or contractors, with the State making effective the responsibility of the public servant for intentional or negligent acts or omissions, stating that no public servant is exempt from responsibility; That, the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2025-0024-M of April 14, 2025, submits to the President of the Board the Technical Report No. JPRF-CTVS-2025-002 of April 14, 2025, issued by the Technical Coordination of Policy and Regulation of the Securities and Insurance System; as well as the Legal Report No. JPRF-CJF-2025-012 of April 14, 2025, issued by the Legal Coordination of Policy and Financial Norms of this Board, as well as the respective draft resolution; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on April 14, 2025, and carried out via video conference on April 16, 2025, reviewed the Memorandum No. JPRF-ST-2025-0024-M of April 14, 2025, issued by the Technical Secretary of the Board; as well as the aforementioned Technical Report No. JPRF-CTVS-2025-002 and Legal Report No. JPRF-CJF-2025-012, in addition to the corresponding draft resolution; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on April 14, 2025, and carried out via video conference on April 16, 2025, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: ARTICLE FIRST.- Substitute the denomination of Title II "Public Offering", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "Public Offering and Generic Registration Securities Issuances". ARTICLE SECOND.- Substitute article 9 of Chapter I "Common Provisions to the Public Offering of Securities", Title II "Public Offering and Generic Registration Securities Issuances", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "Art. 9.- The aggregate of securities in circulation from fund flow securitization processes of assets that are expected to exist, from long and short-term bond issuances of the same originator and/or issuer, in addition to the amount in circulation as acceptor of negotiable commercial invoices, shall not exceed two hundred percent (200%) of its equity. If this amount is exceeded, specific adequate guarantees must be constituted that cover at least one hundred twenty percent (120%) of the exceeded amount. For the case of financial entities and savings and credit cooperatives of the popular and solidary financial sector, the aggregate of securities in circulation from fund flow securitization processes of assets that are expected to exist and from long and short-term bond issuances in which such institutions participate, shall not exceed fifty percent (50%) of their technical equity constituted." ARTICLE THIRD.- Substitute the denomination of Chapter VIII "Public Offering of Generic Registration Securities", Title II "Public Offering and Generic Registration Securities Issuances", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "Generic Registration Securities".

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | ARTICLE FOURTH.- Substitute article 2 of Section I "Registration in the Public Registry of the Securities Market", Chapter VIII "Generic Registration Securities", Title II "Public Offering and Generic Registration Securities Issuances", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "Art. 2.- Registration Requirements: The generic registration of securities issued by financial entities is automatic, will not require a prospectus or public offering circular, nor approval of its issuance. For this effect, the issuer will submit the following:

1. Registration request signed by the legal representative;
2. Security format, if the issuance is with physical titles;
3. Certificate of the compensation and settlement deposit, in which the characteristics of the security are stated, if the issuance is dematerialized;
4. Certificate of truthfulness of the information; and,
5. Regarding securities issued by financial entities, resolution or official letter from the Superintendency of Banks or Superintendency of the Popular and Solidary Economy as applicable, in which it is stated that it is authorized to carry out the issuance." ARTICLE FIFTH.- Substitute article 3 of Section II "Maintenance of Registration in the Public Registry of the Securities Market and Submission of Continuous Information", Chapter VIII "Generic Registration Securities", Title II "Public Offering and Generic Registration Securities Issuances", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "Art. 3.- Maintenance of registration: To maintain the registration of these securities, the respective issuers must submit to the Superintendency of Companies, Securities, and Insurance:
6. The institutions of the Financial System: Until March 31 and until July 31 of each year, the amount placed during the year, and by semester, for terms less than and greater than three hundred sixty days, for each generic registration security." ARTICLE SIXTH.- Substitute Section III "Negotiable Commercial Invoices" of Chapter VIII "Generic Registration Securities", Title II "Public Offering and Generic Registration Securities Issuances", Book II "Securities Market" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following: "SECTION III: NEGOTIABLE COMMERCIAL INVOICES SUBSECTION I: GENERAL ASPECTS Art. 4.- Object of issuance of invoices: Negotiable commercial invoices, issued on the occasion of a sale of goods, products, rights, or the provision of services, which correspond to the ordinary business of the issuer, may be subject to stock market negotiation. Art. 5.- Of issuance and acceptance: Prior to the negotiation of negotiable commercial invoices in the stock market, which includes the REB segment, securities houses acting in placement must verify that the signatures of the issuer and the acceptor correspond to the legal representatives of the legal entities, as well as the existence and integrity of these securities, as established in the Securities Market Law. Likewise, it will be responsible for verifying that the buyer has accepted the content of the invoice expressly in accordance with the operational process established by the Internal Revenue Service. Art. 6.- Issuer responsibility: The issuer of negotiable commercial invoices may limit its responsibility for the payment of the invoice as provided in the Commercial Code, by account entry. If it does not do so, it will respond jointly for the fulfillment of the obligation contained in the title.

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Art. 7.- Of acceptors: Only those who are subjects obligated to payment, to legal entities that meet the following requirements, will be admitted as acceptors of commercial invoices:

1. Securities issuers with current registration in the Public Registry of the Securities Market.
2. Commercial companies registered as acceptors of negotiable commercial invoices in the Public Registry of the Securities Market and whose annual sales level is equal to or greater than USD 300,000.00 regarding the last economic exercise. The aforementioned companies must have an age and uninterrupted operation of no less than three years. Securities houses acting on the selling side must, prior to the subscription of the negotiation order, verify compliance with these parameters. SUBSECTION II: REGISTRATION AND MAINTENANCE Art. 8.- Registration requirements for negotiable commercial invoice securities: The registration of negotiable commercial invoice securities is automatic, will not require a prospectus or public offering circular, nor approval of its issuance. For this effect, the issuer will submit the following:
3. Registration request signed by the legal representative of the issuer;
4. Certificate of the compensation and settlement deposit in which the characteristics of the security are stated;
5. Copy of the Taxpayer Identification Number (RUC) of the issuer, reflecting registration with the tax authority at least one year prior to the registration request in the Public Registry of the Securities Market;
6. Completion of the registration forms;
7. Certificate of truthfulness of the information;
8. Detail of business lines;
9. Copy of the minutes of the General Meeting of partners or shareholders or the highest body that acts in their place or to which they delegate, in which the decision of registration of the company as an issuer of negotiable commercial invoices in the Public Registry of the Securities Market is stated; and,
10. Financial statements of the last economic exercise, when these companies are not regulated by the Superintendency of Companies, Securities, and Insurance. Art. 9.- Requirements for the registration of acceptors: The registration of acceptors in the Public Registry of the Securities Market must be carried out prior to the negotiation of these titles in the stock market. For this effect, the following must be submitted:
11. Trade name and R.U.C. number of the acceptor;
12. Detail of affiliated companies, in accordance with what is established in the Securities Market Law and this codification;
13. Detail of business lines;
14. Sales history and portfolio recovery, of the last three economic exercises;
15. Letter signed by the company accepting negotiable commercial invoices in which it declares: a. Knowledge of the regulation applicable to the negotiable commercial invoice security; b. Knowledge of the responsibilities that as an acceptor of negotiable commercial invoices it has towards the investor; and c. Knowledge of its obligation to provide information on its financial and legal situation.
16. Financial statements of the last economic exercise, when these companies are not regulated by the Superintendency of Companies, Securities, and Insurance. In the case of acceptors that are securities issuers with current registration, it will not be necessary to present the aforementioned documentation. The competent control body must carry out its registration as an acceptor automatically upon request of the issuer of the negotiable commercial invoice.

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Art. 10.- Maintenance of registration:

1. To maintain registration in the capacity of issuer, they must submit to the Superintendency of Companies, Securities, and Insurance, with quarterly frequency until the fifteenth (15) day of the month immediately following the end of each quarter: a. Sequential number and amount of effectively negotiated invoices, denomination, and RUC number of the acceptors; b. Quarterly financial statements.
2. To maintain registration in the capacity of acceptor, quarterly, until the fifteenth (15) day of the month immediately following the end of each quarter, the following must be submitted to the Superintendency of Companies, Securities, and Insurance: a. Updated information of the acceptors in the registration form; and b. Quarterly financial statements. SUBSECTION III: NEGOTIATION AND CONTROL Art. 11.- Term of the securities: The payment term stipulated in the negotiable commercial invoice shall not exceed six (6) months,

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