JPRF-F-2024-0134 — Expansion of the Extraordinary and Temporary Financial Relief Mechanism Applicable to the National Financial System

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-2024-0134
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 norms 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 ibid 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; That, Article 309 of the Fundamental Norm indicates that “the National Financial System is composed of the public, private, and popular and solidary sectors (…)”. Each of these sectors will have specific and differentiated control norms and 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, created the Financial Policy and Regulation Board, 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 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: “1. Regulate the creation, constitution, organization, activities, operation, and liquidation of financial entities; (...); 7. Issue the prudential regulatory framework to which financial entities, securities, insurance, and prepaid comprehensive health care services entities must adhere. framework that must be coherent, not give rise to regulatory arbitrage, and cover (...); (...); 27. Exercise the other functions, duties, and faculties assigned to it by this Code and the law.”; 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, 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 current legislation where reference is made to the “Monetary and Financial Policy Board,” it shall be replaced by “Financial Policy and Regulation Board”;

Resolution No. JPRF-F-2024-0134

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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, through Ministerial Agreement No. MEM-MEM-2024-0027-AM of August 15, 2024, the Ministry of Energy and Mines declared an emergency in the national electricity sector, with the aim of safeguarding the continuity of the public electricity service; That, the Organic Law for Financial Relief and Economic Strengthening of Generations in Ecuador, published in the Official Register Supplement No. 699, on December 9, 2024, aims to generate financial relief for natural and legal persons due to the urgent situation caused by issues derived from energy rationing. The relief will be implemented through financial incentives to ensure immediate economic progress, greater labor insertion, and stimulation of entrepreneurship as a fundamental sector for the economic and social development of a country; That, Article 6 of the aforementioned Organic Law provides that entities constituting the public, private, and popular and solidary financial sectors may establish extraordinary and temporary deferral programs for financial obligations. Furthermore, it orders the Financial Policy and Regulation Board to regulate such programs; That, Transitional Provision Fifth of the aforementioned Law prescribes that “within fifteen (15) days from the publication of this Law, existing measures must be reviewed; and, within the scope of their competencies, the continuity or modification of said measures must be established.”; That, on November 5, 2024, the Financial Policy and Regulation Board issued Resolution No. JPRF-F-2024-0123 which modifies Section VII “Extraordinary and temporary financial relief mechanism applicable to the public and private 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” and Chapter LXI “Extraordinary and temporary financial relief mechanism applicable to the financial sector of the popular and solidary economy” of Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions; That, the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0113-M of December 20, 2024, submits to the President of the Board the Technical Legal Report No. JPRF-CTCJ-2024-014 of December 20, 2024, as well as the respective draft resolution; That, the Financial Policy and Regulation Board, in an ordinary session held via technological means, convened on December 20, 2024, and carried out through video conference on December 23, 2024, reviewed the Memorandum JPRF-ST-2024-0113-M of December 20, 2024, issued by the Technical Secretary of the Board; as well as the Technical Legal Report No. JPRF-CTCJ-2024-014 of December 20, 2024, issued by the Technical Coordination of Policy and Regulation of the Financial System and by the Legal Coordination of Policy and Financial Norms, and the corresponding draft
resolution; That, the Financial Policy and Regulation Board, in an ordinary session held via technological means, convened on December 20, 2024, and carried out through video conference on December 23, 2024, reviewed and approved the following Resolution; and, In exercise of its functions,

Resolution No. JPRF-F-2024-0134

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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 |
RESOLVES:
ARTICLE FIRST.- Substitute the text of the first paragraph of Article 27 of Section VII “Extraordinary and temporary financial relief mechanism applicable to the public and private sectors”, Chapter XVII “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, with the following:
“Financial entities of the public and private financial sectors shall consider, on a case-by-case basis, to refinance or restructure credit operations that present overdue balances between August 10, 2023, and December 31, 2024, prior agreement with the debtor and upon request by the latter. The implementation of such mechanisms may be applied on an additional occasion to that provided for in the current regulation.”
ARTICLE SECOND.- Substitute the text of the first paragraph of Article 1 of LXI “Extraordinary and temporary financial relief mechanism applicable to the financial sector of the popular and solidary economy”, Title II “National Financial System”, Book I “Monetary and Financial System” of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following:
“Entities of the popular and solidary financial sector shall consider, on a case-by-case basis, to refinance or restructure credit operations that present overdue balances between August 10, 2023, and December 31, 2024, prior agreement with the debtor and upon request by the latter. The implementation of such mechanisms may be applied on an additional occasion to that provided for in the current regulation.” FINAL PROVISION. – This Resolution shall enter into force from the present date, without prejudice to its publication in the Official Register. Publish this Resolution on the website of the Financial Policy and Regulation Board, within a maximum term of two days from its issuance. COMMUNICATE.- Given in the Metropolitan District of Quito, on December 23, 2024. THE PRESIDENT, Mgs. 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 23, 2024.- I CERTIFY. TECHNICAL SECRETARY, Mgs. Luis Alfredo Olivares Murillo