Resolution JPRF-F-2024-0120: Financial Relief Measures for Public, Private, and Popular and Solidarity Economy Sectors until May 31, 2025

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-F-2024-0120 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That Article 82 of the Constitution of the Republic of Ecuador recognizes the right to legal certainty, which is based on respect for the Constitution and the existence of prior, clear, public legal norms applied by competent authorities; That Article 132 of the Fundamental Norm determines that the National Assembly will approve as laws the general norms of common interest and that within the powers of the National Assembly is the power to grant public control and regulation bodies the authority to issue general norms in matters within their competence, without altering or innovating legal provisions; That Article 140 of the Supreme Norm grants the President of the Republic the power to send to the National Assembly projects of law qualified as urgent in economic matters; That Article 226 of the Magna Carta collects the principle of legality, understanding that State institutions, their bodies, dependencies, public servants, and persons acting by virtue of a state power will exercise only the competencies and powers attributed to them by law; That Article 13 of the Organic Code of Monetary and Financial Law, Book I, creates the Financial Policy and Regulation Board, part of the Executive Function, as a legal person of public law, 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 power to regulate the creation, constitution, organization, activities, operation, and liquidation of financial entities, securities, insurance, and prepaid comprehensive health care service entities; and to exercise the other functions, duties, and powers assigned to it by law; That the Fiftieth Provision of the Transitional Regime of Resolutions of the Codification of the Monetary and Financial Policy Board, establishes that the resolutions contained in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of the Monetary and Financial Policy Board and the norms issued by control bodies will remain in effect until the Monetary Policy Board and the Financial Policy and Regulation Board resolve what corresponds, within the scope of their competencies; That Article 30 of the Organic Law for the Strengthening of Tourism Activities and Employment Promotion, directs the Financial Policy and Regulation Board, in coordination with the Superintendency of Banks and the Superintendency of Popular and Solidarity Economy, to generate the corresponding regulations according to their competencies so that institutions of the National Financial System can generate special, preferential, and simplified processes and conditions for the settlement of obligations for those establishments providing tourism services, and of the agricultural, livestock, forestry, artisanal fishing, aquaculture sectors, among others, that, due to adverse external effects of natural phenomena or social crises, have been affected in the territories where states of exception have been declared, and therefore are not in a position to fulfill their financial obligations, under the terms originally agreed; That the Technical Secretary, Acting, of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0082-M of August 23, 2024, submits to the President of the Board the Technical Report No. JPRF-CTSF-2024-008 and the Legal Report No. JPRF-CJF-2024-041, both dated August 23, 2024, as well as the respective draft resolution;

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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 the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on August 26, 2024, and carried out via video conference on August 30, 2024, reviewed the Memorandum No. JPRF-ST-2024-0082-M of August 23, 2024, issued by the Acting Technical Secretary of the Board; as well as the Technical Report No. JPRF-CTSF-2024-008 and the Legal Report No. JPRF-CJF-2024-041, both dated August 23, 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 ordinary session held by technological means, convened on August 26, 2024, and carried out via video conference on August 30, 2024, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: ARTICLE FIRST.- Section VII "Extraordinary and temporary financial relief mechanism applicable to public and private financial sectors" of Chapter XVIII: "Risk asset classification and provisioning by entities of the public and private financial sectors under the control of the Superintendency of Banks", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, is replaced by the following text:

“SECTION VII.- EXTRAORDINARY AND TEMPORARY FINANCIAL RELIEF MECHANISM APPLICABLE TO PUBLIC AND PRIVATE FINANCIAL SECTORS Art. 27.- Financial entities of the public and private financial sectors will consider, on a case-by-case basis, refinancing or restructuring credit operations that present overdue balances between August 10, 2023, and the date of issuance of this resolution, prior agreement with the debtor and at their request. The implementation of such mechanisms may be applied on an additional occasion to that provided for in the current regulation. Financial entities, to refinance or restructure operations, will consider on a case-by-case basis the possibility of granting grace periods. They will not charge collection expenses, legal costs, and fees. For the refinancing or restructuring of credits, the consolidation of all credit operations that the credit subject maintains with the entity at the time of implementing the operation may be carried out, by common agreement between the parties. The financial entity may grant new resources under this mechanism only in productive segment or microcredit operations, observing the legal framework and the legal nature of the creditor financial entity, to strengthen the economic activity of the debtor, observing the projection of their income over a time horizon corresponding to the economic cycle of their activity. The new resources granted will generate a new credit operation, which will be registered with the risk classification "A1" at the time of its implementation and, as long as it remains up to date in its payments. This new operation will not be subject to the norms of homogenization of credit operations. For refinanced or restructured credit operations, the determination of the risk classification of the operation and the corresponding provisions will be calculated applying the provisions established in the current regulation on refinanced and restructured credits.

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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 | For the application of this mechanism, financial entities, in the corresponding risk analysis, must evaluate the debtor's willingness to honor the credit and their payment capacity. To support their decision, they must incorporate these evaluations and supporting documentation in the debtor's file. Art. 28.- The period for the application of the mechanism established in this section will run from August 30, 2024, the date of issuance of Resolution No. JPRF-F-2024-0120 of the Financial Policy and Regulation Board, and will remain in effect until May 31, 2025.” ARTICLE SECOND.- After the Thirteenth General Provision of Chapter XVIII "Risk asset classification and provisioning by entities of the public and private financial sectors under the control of the Superintendency of Banks", Title II “National Financial System”, Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following general provisions are added:

“FOURTEENTH. The Superintendency of Banks will establish the corresponding supervision and control actions, in order to verify compliance with what is provided in this norm. It will also remit information, in order to identify operations subject to this mechanism; with monthly frequency to this regulatory body from November 2024 until November 2025, which will at least contain: a) Number of refinanced, restructured, and new operations granted, by entity; b) Amount of refinanced, restructured, and new operations granted, by entity; c) Province to which each operation belongs; and, d) Risk classification corresponding to these operations. FIFTEENTH.- Financial entities of the public and private financial sectors will establish specific policies and procedures, as well as information and accounting systems for the identification, management, and follow-up of refinancings and restructurings applied in accordance with the provisions of this chapter.” ARTICLE THIRD.- After the Twenty-Fourth Transitional Provision of Chapter XVIII "Risk asset classification and provisioning by entities of the public and private financial sectors under the control of the Superintendency of Banks", Title II “National Financial System”, Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following transitional provision is added:

“TWENTY-FIFTH.- Entities of the public and private financial sector may, during the fiscal years 2024 and 2025, constitute new generic provisions. These provisions will represent up to 5% of the total gross portfolio at December of the immediately preceding year and will form part of the secondary technical equity; these provisions will be considered for the effects of what is provided in numeral 11 of article 10 of the Organic Law of the Internal Tax Regime. This transitional provision will remain in effect until December 31, 2025.” ARTICLE FOURTH.- Chapter LXI "Extraordinary and temporary financial relief mechanism applicable to the financial sector of the popular and solidarity economy", Title II “National Financial System”, Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, is replaced by the following text:

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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 | “CHAPTER LXI: EXTRAORDINARY AND TEMPORARY FINANCIAL RELIEF MECHANISM APPLICABLE TO THE FINANCIAL SECTOR OF THE POPULAR AND SOLIDARITY ECONOMY Art. 1.- Entities of the popular and solidarity financial sector will consider, on a case-by-case basis, refinancing or restructuring credit operations that present overdue balances between August 10, 2023, and the date of issuance of this resolution, prior agreement with the debtor and at their request. The implementation of such mechanisms may be applied on an additional occasion to that provided for in the current regulation. Financial entities, to refinance or restructure, will consider on a case-by-case basis the possibility of granting grace periods. They will not charge collection expenses, legal costs, and fees. For the refinancing or restructuring of credits, the consolidation of all credit operations that the credit subject maintains with the entity at the time of implementing the operation may be carried out, by common agreement between the parties. The financial entity may grant new resources under this mechanism only in productive segment or microcredit operations, observing the legal framework and the legal nature of the creditor financial entity, to strengthen the economic activity of the member, observing the projection of their income over a time horizon corresponding to the economic cycle of their activity. The new resources granted will generate a new credit operation, which will be registered with the risk classification "A1" at the time of its implementation and, as long as it remains up to date in its payments. For refinanced or restructured credit operations, the determination of the risk classification of the operation and the corresponding provisions will be calculated applying the provisions established in the current regulation on refinanced and restructured credits. For the application of this mechanism, financial entities, in the corresponding risk analysis, must evaluate the debtor's willingness to honor the credit and their payment capacity. To support their decision, they must incorporate these evaluations and supporting documentation in the debtor's file. Art. 2.- The period for the application of the mechanism established in this chapter is from August 30, 2024, the date of issuance of Resolution No. JPRF-F-2024-0120 of the Financial Policy and Regulation Board, and will remain in effect until May 31, 2025.” ARTICLE FIFTH.- The following General Provisions are added to Chapter LXI "Extraordinary and temporary financial relief mechanism applicable to the financial sector of the popular and solidarity economy", Title II “National Financial System”, Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions:

“GENERAL PROVISIONS FIRST.- The Superintendency of Popular and Solidarity Economy will establish the corresponding supervision and control actions, in order to verify compliance with what is provided in this norm. It will also remit information, in order to identify operations subject to this mechanism; with monthly frequency to this regulatory body from November 2024 until November 2025, which will at least contain:

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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 | a) Number of refinanced, restructured, and new operations granted, by entity; b) Amount of refinanced, restructured, and new operations granted, by entity; c) Province to which each operation belongs; and, d) Risk classification corresponding to these operations. SECOND.- Financial entities of the popular and solidarity financial sector will establish specific policies and procedures, as well as information and accounting systems for the identification, management, and follow-up of refinancings and restructurings applied in accordance with the provisions of this chapter.” ARTICLE SIXTH.- The following Transitional Provision is added to Chapter LXI "Extraordinary and temporary financial relief mechanism applicable to the financial sector of the popular and solidarity economy", Title II “National Financial System”, Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions:

“SINGLE TRANSITIONAL PROVISION.- Financial entities of the popular and solidarity financial sector may, during the fiscal years 2024 and 2025, constitute new generic provisions. These provisions will represent up to 5% of the total gross portfolio at December of the immediately preceding year and will form part of the secondary technical equity; these provisions will be considered for the effects of what is provided in numeral 11 of article 10 of the Organic Law of the Internal Tax Regime. This transitional provision will remain in effect until December 31, 2025.” GENERAL PROVISIONS FIRST.- The corresponding control body will communicate to the respective controlled entities 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 30, 2024. THE PRESIDENT, Mgs. María Paulina Vela Zambrano The preceding 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 30, 2024.- I CERTIFY. ACTING TECHNICAL SECRETARY Mgs. Luis Alfredo Olivares Murillo