JPRFM-2026-015-F — Approves Reforms to the Regulation Governing the Asset and Liability Exclusion and Transfer Scheme (ETAP)

RESOLUTION No. JPRFM-2026-015-F
THE BOARD OF FINANCIAL AND MONETARY POLICY AND REGULATION CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador prescribes that public servants and persons acting under state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law;

That, Article 227 of the same Constitution states that Public Administration constitutes a service to the community governed by principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That, the first paragraph of Article 303 of the constitutional norm determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Function and will be implemented through the Central Bank of Ecuador;

That, Article 309 of the Constitution of the Republic establishes that the national financial system is composed of the public, private, and popular and solidarity sectors. Each of these sectors will have specific and differentiated control norms and entities, responsible for preserving their safety, stability, transparency, and solidity;

That, on October 13, 2025, the Organic Law Reforming the Organic Monetary and Financial Code was published in the Sixth Supplement of the Official Register No. 142;

That, Article 13 of the Organic Monetary and Financial Code creates the Board of Financial and Monetary Policy and Regulation, part of the Executive Function, as an organ with functional, technical, institutional, and decision-making autonomy, responsible for the formulation of monetary, credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation. The Board of Financial and Monetary Policy and Regulation will be the highest governing body of the Central Bank of Ecuador;

That, Article 17 of the aforementioned Code, in its relevant part, determines that:

"(...) For the fulfillment of these functions, the Board will issue norms in matters within its competence, without being able to alter legal provisions.

RESOLUTION No. JPRFM-2026-015-F
The Board of Financial and Monetary Policy and Regulation may issue regulations by segments, economic activities, and other criteria. It may even reform or repeal regulations from the former Board of Monetary Policy and Regulation, the Board of Financial Policy and Regulation, or the Board of Monetary and Financial Policy and Regulation. All norms and policies issued by the Board of Financial and Monetary Policy and Regulation in the exercise of its functions, duties, and powers must be backed by duly substantiated technical and legal reports (...)";

That, Article 18 of the same Code establishes the specific functions of the Board of Financial and Monetary Policy and Regulation in the financial sphere, especially in numeral 2, which authorizes this Institution 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 24 of the same Code provides that the acts of the Board of Financial and Monetary Policy and Regulation enjoy the presumption of legality and will be expressed through resolutions that will have mandatory force, which will govern from their publication in the Official Register, or from the date of their issuance when so determined by the Board, in accordance with the subject matter;

That, Article 25.2 of the same Code determines that the Technical Secretariat of the Board of Financial and Monetary Policy and Regulation is exercised by the Central Bank of Ecuador, and Article 25.3 establishes as its functions the preparation of technical and legal reports supporting regulation proposals, providing technical and administrative support to the Board of Financial and Monetary Policy and Regulation, and any others assigned by said Board;

That, Articles 62 and 74 of the Organic Monetary and Financial Code regulate the supervision and control competencies of the superintendencies regarding financial entities of their respective sectors;

That, numerals 6 and 7 of Article 80 of the same Code, regarding the functions of the Deposit Insurance Corporation, Liquidity Fund, and Private Insurance Fund, establish:

"6. Establish, at the request of the control body and within a period not exceeding ten days, the least cost rule, for which it may request information it deems pertinent from the control body and/or the entity, which must deliver the information obligatorily;

RESOLUTION No. JPRFM-2026-015-F
7. Within the process of exclusion and transfer of assets and liabilities, acquire assets or rights at their nominal value or execute any other procedure that allows the application of the least cost rule regarding the payment of deposit insurance. If there are differences between the nominal value and the market value, the Deposit Insurance Corporation will become a creditor of the shareholders and administrators of the financial entity and administrators of the popular and solidarity economy entities";

That, Article 296 of the same Code establishes the process of exclusion and transfer of assets and liabilities in coordination with the temporary administrator and the control bodies of the entities of the sectors;

That, Article 298 of the same Code establishes that in the case where the process of exclusion and transfer of assets and liabilities of an unviable financial institution has concluded satisfactorily, the forced liquidation of the financial entity, as well as its non-transferred assets and liabilities, will proceed; and, likewise, in the case where the process of exclusion and transfer of assets and liabilities has not concluded satisfactorily, the forced liquidation of the financial entity, as well as all of its assets and liabilities, will proceed;

That, General Provision Twenty-Ninth of the same Code states: "In existing legislation where mention is made, indistinctly, of the Board of Monetary and Financial Policy and Regulation, the Board of Monetary Policy and Regulation; or, the Board of Financial Policy and Regulation, replace and understand as 'Board of Financial and Monetary Policy and Regulation';

That, Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities" Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, regulates the processes of Exclusion and Transfer of Assets and Liabilities;

That, First Transitional Provision of the Organic Law Reforming the Organic Monetary and Financial Code determines that the members of the Board of Financial and Monetary Policy and Regulation, sworn in on September 16, 2025, by the National Assembly, will continue to exercise their functions for the periods they were designated and will maintain their labor continuity and acquired rights;

That, through Office No. T.233-SGJ-25-098, dated September 5, 2025, signed by the Constitutional President of the Republic, addressed to the President of the National Assembly, the list of candidates for the designation of the Members of the Board of Financial and Monetary Policy and Regulation was sent; as well as, the temporality of their stay within the initial period;

That, the Plenary of the National Assembly, on September 16, 2025, designated and swore in the members of the Board of Financial and Monetary Policy and Regulation, in the persons of: Gustavo Estuardo Camacho Dávila; Silvia Daniela Moya Arteta; Roberto Javier Basantes Romero; and, María Isabel Camacho Cárdenas;

That, the Board of Financial and Monetary Policy and Regulation, through Extraordinary Session No. 009-2026, under electronic (asynchronous) modality, on April 3, 2026, reviewed the proposal sent via Memorandum No. BCE-BCE-2026-0122-M, dated April 2, 2026, signed by the General Manager, Acting, of the Central Bank of Ecuador, addressed to the President of the Board of Financial and Monetary Policy and Regulation; as well as, the Reserved Report No. BCE-GISI-017-2026 / BCE-SAF-036-2026 / BCE-GEEE-028-2026 / BCE-SEMF-028-2026, dated April 2, 2026; and, the Legal Report No. BCE-GJ-034-2026, dated April 2, 2026; and,

In exercise of its functions and in attention to Article 24 of the Organic Monetary and Financial Code, the Board of Financial and Monetary Policy and Regulation,

RESOLVES:

Article 1. - Add as the second paragraph of Article 3 of Section I "Exclusion and Transfer of Assets and Liabilities of Entities of the National Financial System", Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following text:

"For this effect, sufficient liquid resources will be reserved to attend the amounts owed to workers for remuneration, indemnities, profits, reserve funds, and retirement pensions charged to the employer, up to the amount of settlements practiced under the terms of the legislation that protects them, and the obligations towards the Ecuadorian Social Security Institute derived from labor relations."

Article 2. - Following Article 4 of Section I "Exclusion and Transfer of Assets and Liabilities of Entities of the National Financial System", Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, add the following text:

"Art 4.1.- In processes of exclusion and transfer of assets and liabilities where the fiduciary rights corresponding to the liquidity fund of the unviable financial entity are negotiated, prior to any partial restitution in favor of acquiring entities, the temporary administrator must compensate the pending balances corresponding to obligations derived from active operations with the Trust that administers the liquidity fund or other operations maintained by the unviable entity with the Central Bank of Ecuador, in cases where such fiduciary rights constitute collateral. For this effect, the temporary administrator will request updated information on pending obligations from the fiduciary administrator of the Liquidity Fund trusts.

Article 3. - Substitute Article 7 of Section I "Exclusion and Transfer of Assets and Liabilities of Entities of the National Financial System", Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text:

"Art. 7.- If total exclusion and transfer of assets and liabilities cannot be effected, the temporary administrator, in coordination with the competent control body, will partially exclude and transfer the liabilities of the unviable financial entity, along with the assets covering said liabilities, taking as reference the depositor base as of the date of the suspension of operations resolution. For the purposes of partial exclusion and transfer of liabilities, the following order will apply:

1. Depositors whose amounts do not exceed the deposit insurance coverage, excluding accrued interest. The exclusion and transfer of liabilities provided for in this numeral will apply only up to the limit of the current deposit insurance coverage, to the extent that such exclusion generates effective savings for the Deposit Insurance Trust.
   In no case will the exclusion of liabilities within the framework of the exclusion and transfer of assets and liabilities process imply the substitution, waiver, or encumbrance of the depositor's right to claim deposit insurance, so the exclusion of liabilities corresponding to depositors with amounts exceeding coverage will not be considered in this numeral, that is, all non-excluded depositors preserve their right to claim Deposit Insurance. To achieve the exclusion and transfer of depositors considered in this numeral, when so required by the temporary administrator, viable entities of the public financial sector may receive high-liquidity assets, other than credit portfolios, and low-value liabilities.

RESOLUTION No. JPRFM-2026-015-F
2. Depositors whose amounts exceed the deposit insurance coverage of persons belonging to priority attention groups defined in Article 35 of the Constitution of the Republic, which must be justified in accordance with current regulations. For this case, an order from lowest to highest will be considered, excluding accrued interest.
3. Other depositors whose amounts exceed the deposit insurance coverage. For this case, an order from lowest to highest will be considered, excluding accrued interest.
4. Other liabilities other than those indicated in the preceding numerals, for which an order from lowest to highest will be considered.
The temporary administrator must comply obligatorily with the order established in the preceding numerals, without exception, such that it cannot advance from one numeral to the next without having executed the previous one, based on available assets.
In the event that available assets are not sufficient to exclude all corresponding liabilities, a partial exclusion of liabilities may be effected, based on available assets; always complying with the established order.
The partial exclusion and transfer of assets and liabilities executed by the temporary administrator must be supported by an analysis of the available resolution alternatives that are viable, based on the conditions of the process and the interest of potential participants, including at least the comparative analysis of total exclusion and transfer, partial exclusion and transfer, and liquidation without exclusion and transfer.

RESOLUTION No. JPRFM-2026-015-F
The parameters used by the temporary administrator must be expressly, clearly, and duly justified in their final management report, including the technical support for the resolution alternative executed.
In the event that it has not been possible to execute the exclusion and transfer of assets and liabilities with a viable financial entity, the COSEDE may be requested to apply the Least Cost Rule.

Article 4. - Substitute Article 11 of Section I "Exclusion and Transfer of Assets and Liabilities of Entities of the National Financial System", Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text:

"Art. 11.- Upon expiration of the period established in the Organic Monetary and Financial Code for the exclusion and transfer of assets and liabilities, the temporary administrator will effect account reconciliation, close the accounting of financial statements, and present to the control body, within a term of three (3) days, the final management report. Such report must contain at least:
a) The identification, comparative evaluation, and quantification of the analyzed resolution alternatives, including the technical, financial, and operational assumptions used for their valuation, as well as the technical and economic justification of the implemented alternative; b) A detailed explanation of the methodology and results of the asset valuation applied during the exclusion and transfer process; c) The detail of the criteria for exclusion and transfer of liabilities, with express reference to applicable regulations; d) The initial and final financial statements, duly signed; and, e) The determination of cash asset exclusion that ensures adequate attention to the labor obligations of the unviable financial entity. While the corresponding control body issues the administrative act of forced liquidation, the unviable financial entity will maintain the suspension of operations and the temporary administrator will retain the position of legal representative thereof, without being able to celebrate new agreements for the transfer of assets and liabilities, being authorized only to perform operations authorized by the corresponding control body".

Article 5. - At the end of Article 1 of Section II "Norm that regulates the alienation of assets and rights acquired by the deposit insurance corporation, liquidity fund, and private insurance fund, for the application of the processes of exclusion and transfer of assets and liabilities", Chapter XXVI "On the Exclusion and Transfer of Assets and Liabilities", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, incorporate the following definition:

"Least Cost Rule: The participation of the Deposit Insurance in a process of exclusion and transfer of assets and liabilities must be equal to or lower than the threshold provided for the total payment of deposit insurance that would correspond to be made in the scenario of liquidation of the unviable entity, discounting the historical recovery rate of the payment of deposit insurance from liquidation processes. For this effect, COSEDE will justify the selected option by comparing the cost of an ETAP against a liquidation and subsequent estimated recovery based on the historical rate. The Board of Financial and Monetary Policy and Regulation may request COSEDE the detail of the calculation of the historical recovery rate obtained regarding the total of the claim in cases of liquidation with payment of deposit insurance. COSEDE must report at the request of the Board of Financial and Monetary Policy and Regulation the detail of the calculation of the historical recovery rate obtained regarding the total of the claim in cases of liquidation with payment of deposit insurance, information that will serve as a technical input for evaluation; and, if applicable, adjustment of the threshold for the application of the least cost rule. The application of the least cost rule may proceed once evaluated and discarded, in a duly motivated manner, the viability of market solutions or other resolution alternatives that involve the participation of viable financial entities and do not imply the use of resources from the Deposit Insurance".

FINAL PROVISION. - This resolution will enter into force from its issuance, without prejudice to its publication in the Official Register.

The publication on the institutional website and the update of the Codification of Monetary, Financial, Securities, and Insurance Resolutions are entrusted to the General Secretariat of the Central Bank of Ecuador.

NOTIFY AND PUBLISH. - Given in the city of Quito D.M., on April 3, 2026.

RESOLUTION No. JPRFM-2026-015-F
THE PRESIDENT
Mgs. Gustavo Estuardo Camacho Dávila
The resolution above was processed and signed by Master Gustavo Estuardo Camacho Dávila - President of the Board of Financial and Monetary Policy and Regulation, in the city of Quito D.M., on April 3, 2026.- I CERTIFY.
TECHNICAL SECRETARIAT
Mgs. Jennifer Mishel Carrillo Rosales