Resolution JPRF-F-2025-0163: Norm for the Subscription of Association Agreements of Entities of the National Financial System

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-2025-0163 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That Article 82 of the Constitution of the Republic establishes 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 84 of the Magna Carta provides that every body with normative power shall have the obligation to formally and materially adapt laws and other legal norms to the rights provided for in the Constitution; That Article 132, number 6 of the Constitution of the Republic of Ecuador, grants public control and regulation bodies the authority to issue general norms in matters within their competence, without altering or innovating legal provisions; That Article 141 of the same normative body provides that the Executive Function is integrated by the Presidency and Vice-Presidency of the Republic, the State Ministries, and other bodies and institutions necessary to fulfill, within the scope of their competence, the attributes of direction, planning, execution, and evaluation of national public policies and plans created to execute them; 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 Public Administration constitutes a service to the community governed by principles of effectiveness, efficiency, quality, hierarchy, coordination, participation, among others; That Article 308 of the Constitution of the Republic of Ecuador prescribes that Financial Activities are a public order service; That Article 309 of the Fundamental Norm indicates that the National Financial System is composed of the public, private, and popular and solidarity sectors; and each of these sectors will have specific norms and control entities, which will be responsible for preserving their security, stability, transparency, and solidity; That Article 13 of the Organic Monetary and Financial Code, Book I, reformed by the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Official Registry Supplement No. 443 of May 3, 2021, created the Financial Policy and Regulation Board, part of the Executive Function and as a public law entity, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; That the Organic Law of Public Integrity, published in the Third Supplement of the Official Registry No. 68 of June 26, 2025, reformed several articles of Book I of the Organic Monetary and Financial Code, among them, substituted article 13 and created the Financial and Monetary Policy and Regulation Board, part of the Executive Function, as a public law legal person, responsible for the formulation of monetary, credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; That the Tenth Transitional Provision of the Organic Law of Public Integrity mentions that, within one month from the entry into force of this Law, the President of the Republic will submit to the National Assembly the list of candidates for the designation of the members of the Financial and Monetary Policy and Regulation Board;

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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 second paragraph of the Fourth Transitional Provision of the Organic Law for the Strengthening of Protected Areas, published in the Fourth Supplement of the Official Registry No. 80 of July 14, 2025, states that the structure and functions of the Financial Policy and Regulation Board, established in the Organic Monetary and Financial Code before June 26, 2025, will remain in effect until the designation of the members of the Financial and Monetary Policy and Regulation Board by the General Assembly; That the Regulation to the Organic Law of Public Integrity, in its Fifteenth Transitional Provision, mentions that the Financial Policy and Regulation Board will guarantee, during the transformation process, the continuity of administrative, contractual, judicial, and extrajudicial processes; as well as of the various services, programs, projects, and processes already initiated; That numeral 2 of Article 14 of the Organic Monetary and Financial Code, prior to the reform effected by the Organic Law of Public Integrity, published in the Third Supplement of the Official Registry No. 68 of June 26, 2025, established that the Financial Policy and Regulation Board has competence to issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and prepaid comprehensive health care services systems; That Article 14.1 of the aforementioned Organic Code prescribes that for the performance of its functions, the Policy and Regulation Board must comply with the following duties and exercise the following faculties, among which are: "(...); 3. Evaluate risks to financial stability and issue macroprudential regulations within the scope of its competence, in consultation with the Monetary Policy and Regulation Board, without prejudice to its independence; (...); 7. Issue the prudential regulatory framework to which financial, securities, insurance, and prepaid comprehensive health care services entities must be subject, a framework that must be coherent, not give rise to regulatory arbitrage (...); (...); 9. Issue the non-prudential regulatory framework for all financial, securities, insurance, and comprehensive services entities (...); (...); 25. Apply the provisions of this Code and resolve cases not provided for in it; (...); 27. Exercise other functions, duties, and faculties assigned to it by this Code and the law; (...)"; That Article 143 of the ibidem defines financial activity as the operations and services linked to financial flows or risks, carried out habitually by the entities that make up the financial, securities, and insurance systems. Thus, financial activities are a public order service, regulated and controlled by the State; 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 160 of the cited Code establishes that the national financial system is integrated by the public financial sector, the private financial sector, and the popular and solidarity financial sector; That Article 177 of the same normative body defines association as the union of two or more entities of the financial system that are in operation for the expansion and provision of specific services, without any losing its identity or legal personality; That the Fifty-Fourth Transitional Provision ibidem establishes that resolutions contained in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of the Financial Policy and Regulation Board, of the Securities and Insurance Policy and Regulation Board of the Monetary and Financial Policy and Regulation Board, will maintain their validity until the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board resolve what corresponds, within the scope of their competencies; That Articles 3, 9, and 28 of the Organic Administrative Code determine the following: "Art. 3.- Principle of effectiveness. Administrative actions are carried out based on the fulfillment of the purposes provided for each body or public entity, 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 | "Art. 9.- Principle of coordination. Public administrations develop their competencies in a rational and orderly manner, avoiding duplicities and omissions." "Art. 28.- Principle of collaboration. Administrations will work in a coordinated, complementary manner, providing mutual aid (...);" That Article 15 of the Organic Administrative Code recognizes the principle of responsibility, which establishes 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 private law subjects acting in the exercise of a public power; That Article 144 of the Organic Law of Popular and Solidarity Economy defines that the regulation of the Popular and Solidarity Economy and the Popular and Solidarity Financial Sector is under the responsibility of the Financial Policy and Regulation Board; That through Technical Legal Report No. JPRF-CTCJ-2025-003 of August 1, 2025, the Technical Coordination of Policy and Regulation of the Financial Sector and the Legal Coordination of Policy and Financial Norms analyze and present the technical and legal arguments to issue the "Norm for the Subscription of Association Agreements of Entities of the National Financial System" with the objective of strengthening and harmonizing the regulatory framework applicable among the entities involved in the subscription or renewal of association agreements; That the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2025-0052-M of August 14, 2025, submits to the President of the Board the Technical Legal Report No. JPRF-CTCJ-2025-003 of August 1, 2025, issued by the Technical Coordination of Policy and Regulation of the Financial System and the Legal Coordination of Policy and Financial Norms, as well as the respective draft resolution; That the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on August 15, 2025, and carried out via video conference on August 20, 2025, reviewed the Memorandum No. JPRF-ST-2025-0052-M of August 14, 2025, issued by the Technical Secretary of the Board; as well as Technical Legal Report No. JPRF-CTCJ-2025-003 of August 1, 2025, and the corresponding draft resolution; That the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on August 15, 2025, and carried out via video conference on August 20, 2025, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: ARTICLE ONE.- Substitute Chapter VI "Subscription of Association Agreements between Financial Entities Subject to the Control of the Banking Superintendence", of Title II "National Financial System", of Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, and Incorporate the following: Norm for the Subscription of Association Agreements of Entities of the National Financial System, according to the following text:

"CHAPTER VI: NORM FOR THE SUBSCRIPTION OF ASSOCIATION AGREEMENTS OF ENTITIES OF THE NATIONAL FINANCIAL SYSTEM Art. 1.- Object and Scope: This norm aims to determine the conditions and requirements that entities of the national financial system, hereinafter "entities", must meet so that the Banking Superintendence or the Popular and Solidarity Economy Superintendence, as applicable, grant, if applicable, the authorization for the subscription of association agreements.

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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. 2.- For the application of this norm, the following definitions will be considered:

1. Association Administrator.- It is the entity of the national financial system that, according to the association agreement, provides the greatest contribution of services or benefits to the parties signing said agreement. It is responsible for controlling the correct implementation of the signed agreement for the provision of specific services, according to what is established in Book I of the Organic Monetary and Financial Code.
2. Participating Entities.- They are the entities of the national financial system that sign an association agreement.
3. Feasibility Study.- It is the instrument that allows establishing the financial and operational viability of the association.
4. Administrative and Operational Regulation Manual.- It contains the policies and procedures that allow unifying, conceptualizing, and operationalizing the object of the association agreement of the participating entities. Art. 3.- Association agreements are agreements signed between two or more entities of the national financial system in current operation, through which, without affecting their autonomy, identity, or legal personality, the parties establish a relationship of collaboration to jointly develop projects oriented towards the expansion or provision of specific services. By virtue of these agreements, entities share physical, technological, or operational resources, as well as the risks and benefits derived from the association. Their objective may include the development of new financial products or services, new attention channels, or the expansion of the geographic coverage of their services through the offices of the participating entity/entities. This type of agreement differs from a service contract in that there is no unilateral performance nor a relationship of subordination between the parties, but rather a cooperation between equals to achieve common goals. Art. 4.- Duration: Association agreements will have the duration defined by the participants and may be renewed. Art. 5.- Participants: Two or more entities of the national financial system may participate in the subscription of an association agreement. Art. 6.- Prerequisites for association: For entities of the national financial system to be authorized to sign an association agreement by the corresponding control body, they must meet the following conditions:
5. Not present non-compliance with the established parameters of technical equity and risk-weighted assets in the last 12 months.
6. Not register, at the date of submission of the request, a deficiency in provisions or, if applicable, have complied by the date of the request with the current schedules for the deferral of the constitution of provisions.
7. At the date of submission of the request, the participating entities must have the corresponding authorization to provide the specific services that are the subject of the agreement.
8. Present audited financial statements of the last fiscal year with an unqualified opinion by the external audit firm.
9. Not present significant risk events identified by the corresponding control body, regarding which the entities have not adopted the pertinent corrective measures.

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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 | The control bodies may request clarifications or any other information required to complete the analysis of the requirements demanded by this norm. The Banking Superintendence or the Popular and Solidarity Economy Superintendence, as applicable, will deny the request if one of the participating entities does not meet all the requirements established in this article. Art. 7.- Requirements for authorization: For the subscription of an association agreement, entities must previously request authorization from the corresponding control body. For this effect, they must present the following:

1. Authorization request for the subscription of association agreements signed by the legal representatives of the participating entities;
2. Minutes of the board session or body acting on its behalf, of the participating entities, in which the association was approved;
3. Draft of the association agreement of the participating entities that at least contains the minimum clauses established in this norm;
4. Feasibility study justifying the association, under the terms provided in the article "Feasibility Study" in this norm;
5. Manual regulating the administration and operability of the association, approved by the parties, which, among other things, will contain the policies, processes, and procedures to be adopted by the participating entities, the responsibilities of each of them, and the system to be used for the compensation of values, if necessary. In the case that participants belong to different sectors of the national financial system, each must have the authorization of their respective supervision and control bodies. Art. 8.- Content of the agreement: Association agreements must contain at least the following clauses:
6. Parties.- The denominations of the entities appearing to sign the agreement will be recorded, with the first and last names of the legal representative.
7. Background.- The background motivating the signing of the agreement and the reference to the number and date of the document by which the corresponding control body authorizes its signing will be included.
8. Object.- The specific object of the association will be established, and the specific services to be provided or expanded by virtue of the signing of the association agreement and the operational relationships between the participating entities of the agreement will be specified in a broad, clear, and detailed manner.
9. Of the administration and association.- The entity that administers the association will be established; the obligations of each of the participants in the agreement; the way in which accounts will be compensated, if applicable; the responsibilities assumed by each entity before the association regarding possible risks, errors, failures, or deficiencies, or before third parties; and, the annexes, instructions, manuals, regulations, and any other document that constitutes an integral part of the agreement will be detailed. It will be clearly established that the participating entities are obligated to keep their own accounting and to establish the system of value compensation through the use of reciprocal accounting accounts, all of which must be recorded in the respective manual that will be previously approved by the parties and brought to the knowledge of the Popular and Solidarity Economy Superintendence or the Banking Superintendence, as applicable.

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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 | 5. Costs.- The costs for the provision of mutual services and other charges to be charged by virtue of the application of the agreement will be clearly stipulated. 6. Term.- The duration term of the association agreement will be established. 7. Training.- If applicable, the type and form of training that the participating entities will provide and receive will be indicated and detailed. 8. Termination of the agreement.- A clause will be included stipulating the causes for the termination of the agreement, which must be: a. By fulfillment of the term. b. By mutual agreement of the parties. c. By liquidation or extinction of the legal personality of any of the participating entities. d. By fortuitous event or force majeure that prevent the fulfillment of the agreement. e. By disposition of the corresponding control body in the event of non-observance of legal and regulatory provisions that put the viability of the association agreement or the entity at risk. f. By non-compliance with the object of the agreement. Within five (5) days following the termination of the association for any of the causes provided for in this numeral, except for letter e. when the participating entities are subject to the control of the same control body, the entity administering the agreement will communicate the particular to the Banking Superintendence and/or the Popular and Solidarity Economy Superintendence, as applicable. 9. Controversies.- The forms of resolution in cases of controversy will be stipulated, which may resort to alternative dispute resolution methods, determining the legal domicile of the parties. Any subsequent modification to the association agreement must be brought to the knowledge of the control body for its approval. The agreement cannot contain abusive clauses and, therefore, may cause or cause damage to the entities, partners, and/or clients or users. Art. 9.- Feasibility Study: The feasibility study must contain at least the following:

1. Analysis of the macroeconomic and financial environment.- Diagnosis of the current situation of financial services and its impact on the economic and financial development of the country.
2. Market study, must contain the following: 2.1. Analysis of the supply and demand of the specific services that are the object of the association agreement, detailed for each of the participating entities. 2.2. Determination of the existence of unmet demand for the specific services that are the object of the agreement detailed by each participating entity. 2.3. Analysis of the prices (tariffs) of the specific services to be offered as a result of the association agreement by each participating entity. 2.4. Analysis of the commercialization mechanisms of each participating entity.
3. Technical study, must present the following: 3.1. Analysis and determination of the optimal size of the specific service provision project by each participating entity. 3.2. Analysis of the specific services to be developed and used by each participating entity. 3.3. Analysis of investments in physical and technological infrastructure of each participating entity. 3.4. Information technology infrastructure of each participating entity.