Resolution No. JPRM-2022-003-M

THE MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

That, the Constitution of the Republic of Ecuador, in its article 226, prescribes that 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 the Public Administration constitutes a service to the community that is governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That, the first paragraph of article 303 of the Constitution of the Republic 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, items 1 and 14 of article 36 of the Organic Monetary and Financial Code, as functions of the Central Bank of Ecuador, establish: “1. Implement policy in the monetary sphere, to promote the sustainability of the monetary and financial system in accordance with the provisions of this Code; (...) / 14. Act as fiscal, financial agent and depository of public resources and provide banking services to entities in the public sector and to the national financial system according to the market remuneration determined by the Monetary Policy and Regulation Board; (...)”;

That, article 36.2 of the Code ibidem provides: “The Central Bank of Ecuador, to carry out its operations, may open and maintain current accounts in its books for: 1. National financial entities and entities in the public sector; / 2. Foreign banks, central banks; international financial institutions and, when necessary, foreign governments, international organizations, and donor organizations; and, / 3. Entities participating in the Securities Market, except issuers. The Central Bank of Ecuador will not open current accounts for natural persons. / The Monetary Policy and Regulation Board will prescribe the conditions for opening current accounts in the books of the Central Bank of Ecuador.”;

That, article 47.1 of the Organic Monetary and Financial Code created the Monetary Policy and Regulation Board, as part of the Executive Function, responsible for the formulation of monetary policy, the highest governing body of the Central Bank of Ecuador, and determines its composition;

That, article 47.6 of the same Code, regarding the functions of the Monetary Policy and Regulation Board, among others, establishes: “1. Formulate policy in the monetary sphere and observe its application by the Central Bank of Ecuador, to preserve the integrity and sustainability of the dollarization monetary system and the financial system, in accordance with the provisions of this Code; (...) 7. Formulate the policy of the operations of the Central Bank of Ecuador; (...) 26. Those others conferred by law (...)”;

That, article 160 ibidem provides: “The national financial system is integrated by the public financial sector, the private financial sector and the popular and solidarity financial sector.”.

That, article 161 ut supra states: “The public financial sector is composed of: 1. Banks; and, / 2. Corporations.”.

That, article 162 of the referred Organic Code establishes: “The private financial sector is composed of the following entities: / 1. Multiple banks and specialized banks: / a) A multiple bank is the financial entity that has authorized operations in two or more credit segments; and, / b) A specialized bank is the financial entity that has authorized operations in one credit segment and that in the other segments its operations do not exceed the thresholds determined by the Monetary and Financial Policy Regulation Board. / 2. Financial services: general warehouses, exchange houses and corporations for the secondary market development of mortgages; and, / 3. Auxiliary services of the financial system, such as: banking software, transactional, transport of monetary species and securities, payments, collections, networks and automatic teller machines, accounting and computing and others qualified as such by the Superintendence of Banks within the scope of its competence.”.

That, article 163 ibidem determines: “The popular and solidarity financial sector is composed of: / 1. Savings and credit cooperatives; / 2. Central boxes; / 3. Associative or solidarity entities, communal boxes and banks and savings boxes; and / 4. Auxiliary services of the financial system, such as: banking software, transactional, transport of monetary species and securities, payments, collections, networks and automatic teller machines, accounting and computing and others qualified as such by the Superintendence of Popular and Solidarity Economy within the scope of its competence. / Mutual savings associations for housing credit are also part of the popular and solidarity financial sector. / The associative or solidarity entities, communal boxes and banks and savings boxes shall be governed by the provisions of the Organic Law of the Popular and Solidarity Economy and the regulations issued by the Monetary and Financial Policy Regulation Board”.

That, the Fifty-Fourth Transitory Provision of the indicated Code prescribes: “Resolutions contained in the Codification of Monetary, Financial, Securities and Insurance Resolutions of the Monetary and Financial Policy Regulation Board and norms issued by control bodies, will remain in force until the Monetary Policy Regulation Board and the Financial Policy Regulation Board decide what corresponds, within the scope of their competencies”;

MONETARY POLICY AND REGULATION BOARD

RESOLUTION No. JPRM-2022-003-M

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That, Section IV “Current and Securities Accounts in the Central Bank of Ecuador”, of Chapter VI “Monetary Policy Instruments”, of Title I “Monetary System”, of Book I “Monetary and Financial System”, of the Codification of Monetary, Financial, Securities and Insurance Resolutions, issued by the former Monetary and Financial Policy Regulation Board, regulates the opening of Current Accounts of the Central Bank of Ecuador;

That, article 36.2 of the Organic Monetary and Financial Code, strictly establishes the type of entities that can have current accounts in the Central Bank of Ecuador. Therefore, it is necessary that new provisions be issued that adjust to current regulations, in such a way that it expressly states which entities are authorized to open and maintain accounts; as well as, establish a deadline and procedure for the closure of those that no longer adjust to current legal provisions;

That, it is the faculty of the Monetary Policy and Regulation Board, to resolve on the regulations contained in the Codification of Monetary, Financial, Securities and Insurance Resolutions, issued by the former Monetary and Financial Policy Regulation Board, within the scope of its attributes and competencies, with the purpose of incorporating these provisions into the own regulations of the Monetary Policy and Regulation Board, prior to the analysis of the pertinence of each norm and provision, in a disaggregated manner;

That, the Monetary Policy and Regulation Board, in extraordinary session by mixed modality, on January 20, 2022, reviewed the proposal sent via memorandum No. BCE-BCE-2022-0012-M, of January 19, 2022, by the General Manager of the Central Bank of Ecuador to the President of the Monetary Policy and Regulation Board; as well as, report No. BCE-SGSERV-2022-002/DNSF-2022-006 of January 11, 2022, and the legal report No. BCE-CGJ-009-2022, of January 18, 2022; and,

In exercise of its functions and in attention to article 47.7 of the Organic Monetary and Financial Code, the Monetary Policy and Regulation Board, resolves to issue the resolution for the:

OPENING OF CURRENT ACCOUNTS IN THE CENTRAL BANK OF ECUADOR

Article 1.- The Central Bank of Ecuador may open and maintain current accounts for the following types of entities:

1. Regulatory body of public finances through the Single Treasury Account and its subaccounts;
2. Public Banks and Public Financial Corporations;
3. National Private Banks;
4. Mutual Savings Associations for Housing Credit;

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5. Savings and Credit Cooperatives;
6. Central Box;
7. Entities of Auxiliary Services authorized by the Central Bank of Ecuador as Auxiliary Payment Systems;
8. Entities in the Public Sector;
9. Public Companies;
10. Mixed economy companies and anonymous societies, with State participation;
11. Decentralized Autonomous Governments;
12. Entities attached to Decentralized Autonomous Governments;
13. Trusts in which the Central Bank of Ecuador acts as Trustee Administrator;
14. Trusts whose contributions come from entities, institutions and bodies of the Public Sector included in articles 225 and 315 of the Constitution of the Republic;
15. Foreign banks, central banks, international financial institutions, foreign governments, international organizations and donor organizations;
16. Securities Houses;
17. Stock Exchanges;
18. Decentralized Securities Depositories;
19. Fund Administrators; and,
20. Social Security Entities.

The Central Bank of Ecuador may open current accounts in its name for control, internal processes, compensation and/or settlement.

Article 2.- For the opening of current accounts in the Central Bank of Ecuador, the following general conditions must be considered:

a) The requirements for opening current accounts must be specific, in attention to the nature of the entities indicated in the preceding article;

b) Current accounts will not be opened for natural persons;

c) Prior to the opening of current accounts, public entities will have the authorization of the regulatory body of public finances;

d) Prior to the opening of current accounts, the Central Bank of Ecuador must implement the due diligence process and others that are determined for this effect;

e) Current accounts that do not present movements for more than one hundred eighty (180) days, must be classified as immobilized accounts. The legal representatives of the respective entities must present the justifications for them to be activated.

The specific requirements and procedure will be established by the Central Bank of Ecuador, who will verify compliance with the general conditions established in this resolution.

SINGLE GENERAL PROVISION: The Monetary Policy and Regulation Board recognizes the provisions contained in Section IV “Current and Securities Accounts in the Central Bank of Ecuador”, of Chapter VI “Monetary Policy Instruments”, of Title I “Monetary System”, of Book I “Monetary and Financial System”, of the Codification of Monetary, Financial, Securities and Insurance Resolutions, issued by the former Monetary and Financial Policy Regulation Board, as part of the regulations on which it corresponds to resolve.

TRANSITORY PROVISIONS

FIRST.- The General Management of the Central Bank of Ecuador, within a period of three (3) months, will issue the necessary administrative regulations for the implementation of what is resolved in this resolution.

SECOND.- Those entities that on the date of entry into force of this resolution maintain current accounts in the Central Bank of Ecuador and are not within the type of entities authorized to maintain a current account, according to current regulations, must close said accounts within a period of six (6) months.

Upon completion of the aforementioned deadline and if the accounts have not been closed, the Central Bank of Ecuador will categorize them as immobilized and will require the legal representative of said entities to indicate the account in the national financial system in which said resources must be transferred.

SINGLE REPEALING PROVISION: Section IV “Current and Securities Accounts in the Central Bank of Ecuador”, of Chapter VI “Monetary Policy Instruments”, of Title I “Monetary System”, of Book I “Monetary and Financial System”, of the Codification of Monetary, Financial, Securities and Insurance Resolutions, issued by the former Monetary and Financial Policy Regulation Board, is expressly repealed.

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

Ensure its publication on the institutional website of the Central Bank of Ecuador, to the Document Management and Archive Directorate.

COMMUNICATE AND PUBLISH.- Given in the Metropolitan District of Quito, on January 20, 2022

THE PRESIDENT

Tatiana Rodríguez

TATIANA MARIBEL RODRÍGUEZ CERÓN

The preceding resolution was signed by doctor Tatiana Maribel Rodríguez Cerón, in her capacity as President of the Monetary Policy and Regulation Board, in the Metropolitan District of Quito, on January 20, 2022.- I CERTIFY.

ADMINISTRATIVE SECRETARY

María Alexandra Guerrero del Pozo

MARÍA ALEXANDRA GUERRERO DEL POZO