JPRF-F-2025-0143 — Reforming Article 3 of Section II "Asset and Contingent Weighting Factors"

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
Resolution No. JPRF-F-2025-0143
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That Article 82 of the Constitution of the Republic enshrines 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 226 of the Magna Carta mandates 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; That Article 227 ibid establishes that the Public Administration constitutes a service to the collectivity that is governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, participation, and among others; That Article 303 of the Constitution prescribes that the formulation of monetary, credit, exchange rate, and financial policies is the exclusive faculty of the Executive Branch; That Article 308 of the Fundamental Law states that financial activities are a service of public order; That Article 309 ibid 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 safety, stability, transparency, and solidity; That Article 13 of the aforementioned Organic Code was reformed by the Organic Law Reforming the Monetary and Financial Organic Code for the Defense of Dollarization, published in the Official Register Supplement No. 443 of May 3, 2021, which created the Financial Policy and Regulation Board, part of the Executive Branch, as a public law legal entity, with administrative, financial, and operational autonomy, responsible for the formulation of policy and regulation of credit, financial, securities, insurance, and prepaid comprehensive health care services; That Article 14 of the cited Organic Code, which refers to the scope of the Financial Policy and Regulation Board, determines that this collegiate body is responsible for formulating financial policy; issuing regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial system; and also, issuing micro-prudential regulations for the national financial sector, based on proposals presented by the respective superintendencies, within their areas of competence and without prejudice to their independence; That Article 14.1 ibid, in number 7, letter b), states that it is the responsibility of the Financial Policy and Regulation Board to fulfill the duty and exercise the faculty of issuing the prudential regulatory framework to which financial entities must be subject, a framework that must be coherent, not give rise to regulatory arbitrage, and must establish "minimum capital levels, technical equity, and risk weightings of assets, their composition, method of calculation, and modifications"; That, as established in Articles 150 and 151
of the Monetary and Financial Organic Code, Book I, financial entities will be subject to the regulation issued by the Financial Policy and Regulation Board, which must recognize the nature and particular characteristics of each of the sectors of the national financial system;

Resolution No. JPRF-F-2025-0143

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
That Article 190 of the Monetary and Financial Organic Code, Book I, refers to the solvency and technical equity of entities of the national financial system, financial groups, and popular and solidary groups; That the Twenty-Ninth General Provision of Book 1 of the Monetary and Financial Organic Code, Book I, added by the Organic Law Reforming the Monetary and Financial Organic Code for the Defense of Dollarization, provides: "In the current legislation where reference is made to the 'Monetary and Financial Policy and Regulation Board', replace it with 'Financial Policy and Regulation Board';" That the Fiftieth-Fourth Transitional Provision of the aforementioned Code determines the transitional regime of resolutions of the Codification of the Monetary and Financial Policy and Regulation Board, establishing 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 their areas of competence."; That Article 15 of the Administrative Organic Code incorporates the principle of responsibility and 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 subjects of private law acting in the exercise of a public power delegated by the State and their dependents, controlled entities, or contractors; That, through Resolution No. JPRF-F-2023-071 of June 30, 2023, issued by the Financial Policy and Regulation Board, Chapter VII "Relationship between total technical equity and assets and contingents weighted by risk of entities of the public and private financial system", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions was reformed, with the aim of strengthening the resistance capacity of the National Financial System through the approximation of the regulation to international best practices; That the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2025-0013-M of March 17, 2025, submits to the President of the Board the Technical Report No. JPRF-CTSF-2025-007 and the Legal Report No. JPRF-CJF-2025-007, both dated March 17, 2025, as well as the respective draft resolution; That the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on March 17, 2025, and carried out via video conference on March 19, 2025, reviewed the Memorandum No. JPRF-ST-2025-0013-M of March 17, 2025, issued by the Technical Secretary of the Board; as well as the Technical Report No. JPRF-CTSF-2025-007 and the Legal Report No. JPRF-CJF-2025-007, both dated
March 17, 2025, 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 extraordinary session held by technological means, convened on March 17, 2025, and carried out via video conference on March 19, 2025, reviewed and approved the following Resolution; and, In exercise of its functions,

Resolution No. JPRF-F-2025-0143

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
RESOLVES:
ARTICLE FIRST.- In item 2 of Article 3 of Section II "Asset and Contingent Weighting Factors", Chapter VIII "Relationship between Total Technical Equity and Contingents Weighted by Risk for entities of the Public and Private Financial System", of Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, following the clause that says "130710 Restricted availability - Deposits subject to restriction (1)", incorporate the following:
"130715 Restricted availability - Securities for reserve requirements (1)"
ARTICLE SECOND.- In item 3 of Article 3 of Section II "Asset and Contingent Weighting Factors", Chapter VIII "Relationship between Total Technical Equity and Contingents Weighted by Risk for entities of the Public and Private Financial System", of Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, delete the clause that prescribes:
"130715 Restricted availability - Securities for reserve requirements".
FINAL PROVISION.- This Resolution will 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 (2) days from its issuance.
NOTIFY.- Given in the Metropolitan District of Quito, on March 19, 2025.
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 March 19, 2025.- I CERTIFY.
TECHNICAL SECRETARY,
Mgs. Luis Alfredo Olivares Murillo