JPRF-V-2024-095 — Incorporates a Transitional Provision in Chapter III "Intermediation and Negotiation", Title VIII "Securities Houses", Book II "Securities Market" of the Codification of Monetary, Financial, Securities and Insurance Resolutions

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-V-2024-095
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That, Article 226 of the Constitution of the Republic of Ecuador prescribes 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 for the fulfillment of their purposes and to make effective the enjoyment and exercise of the rights recognized in the Constitution; That, Article 227 of the Fundamental Norm establishes that public administration constitutes a service to the community that is governed by the principles of effectiveness, efficiency, quality, hierarchy, decentralization, deconcentration, coordination, participation, planning, transparency, and evaluation; That, Article 13 of the Organic Code of Monetary and Financial Law, Book I, reformed by the promulgation of the Organic Law Reforming the Organic Code of Monetary and Financial Law 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 the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care service policy and regulation; That, Article 14 ibidem, Book I, in its numbers 1 and 2, determines that, within the scope of the Financial Policy and Regulation Board, it corresponds to formulate securities policy, as well as to issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the securities system; establishing that, for the fulfillment of these functions, it 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 Code of Monetary and Financial Law, 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, 9, and 27, which are: regulate the creation, constitution, organization, activities, operation, and liquidation of securities entities; issue the non-prudential regulatory framework for all securities entities, which will include, among others, norms on transparency and disclosure of information, market integrity, and consumer protection; and, exercise the other functions, duties, and faculties assigned to it by the cited Code and the law; That, Article 9 of the Organic Code of Monetary and Financial Law, Book II (Securities Market Law), enumerates the attributions that currently correspond to the Financial Policy and Regulation Board in the context of this Law, among which are those indicated in numbers 1, 4, and 6, which are, respectively: establish the general policy of the securities market and regulate its functioning;
issue the resolutions necessary for the application of the cited Law; and, regulate the creation and functioning of securities houses, as well as the services they provide; That, Article 10 ibidem, when referring to the attributions and functions of the Superintendence of Companies, Securities and Insurance, states that, in addition to the functions indicated in the Companies Law, the control body will exercise those of surveillance, audit, intervention, and control of the securities market with the purpose that the activities of this market are subject to the legal order and attend to the general interest;

Resolution No. JPRF-V-2024-095

---

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
That, the unnumbered Article added after Article 58 of the Organic Code of Monetary and Financial Law, Book II (Securities Market Law), determines, in its numbers 1, 3, and 9, among others, the following obligations of securities houses: (i) keep the records that the Financial Policy and Regulation Board determines; (ii) provide their principals with updated information on the securities in circulation in the market and regarding the legal, administrative, financial, and economic situation of issuing companies; and, (iii) those other that the Financial Policy and Regulation Board determines, respectively; That, the Fiftieth Fourth Transitional Provision of the Organic Code of Monetary and Financial Law, Book I, prescribes: "Transitional Regime of Resolutions of the Codification of the Monetary and Financial Policy and Regulation Board. 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 the control bodies will maintain their validity until the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board decide what corresponds, within the scope of their competencies."; That, the Financial Policy and Regulation Board, through Resolution No. JPRF-V-2023-083 of October 16, 2023, reformed the norms applicable to securities houses contained in Title VIII "Securities Houses", Book II "Securities Market" of the Codification of Monetary, Financial, Securities and Insurance Resolutions; That, the Quito Stock Exchange (BVQ) and the Guayaquil Stock Exchange (BVG), through Letter s/n of November 6, 2023, presented to the Financial Policy and Regulation Board a proposal for modification to Resolution No. JPRF-V-2023-083 of October 16, 2023, requesting the incorporation of a transitional provision that establishes a transitional period of ninety (90) days for the implementation of what was resolved in the aforementioned resolution, regarding the formats of commercial commission contracts and negotiation orders; That, the Technical Secretariat of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0012-M of January 30, 2024, sends to the President of the Board the Technical-Legal Report No. JPRF-CTCJ-2024-001 of January 30, 2024; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on January 30, 2024 and carried out through video conference on January 31, 2024, learned of Memorandum No. JPRF-ST-2024-0012-M of January 30, 2024, sent by the Technical Secretariat of the Board; as well as the aforementioned Technical-Legal Report No. JPRF-CTCJ-2024-001, in addition to the corresponding draft resolution; That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on January 30, 2024 and carried out through video conference on January 31, 2024, learned of and approved
the following Resolution; and, In exercise of its functions, RESOLVES:
ARTICLE ONLY.- Incorporate the following Transitional Provision in Chapter III "Intermediation and Negotiation", Title VIII "Securities Houses", Book II "Securities Market" of the Codification of Monetary, Financial, Securities and Insurance Resolutions:

Resolution No. JPRF-V-2024-095

---

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
"TRANSITIONAL PROVISION.- Securities Houses must implement the formats of Commercial Commission Contracts and Negotiation Orders determined in Resolution No. JPRF-V-2023-083 of October 16, 2023, within a maximum period of three (3) months, counted from the date of entry into force of this Resolution."
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 January 31, 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 January 31, 2024.- I CERTIFY.
TECHNICAL SECRETARY,
Mgs. Nelly Arias Zavala