RESOLUTION No. JPRM-2022-010-M

THE MONETARY POLICY AND REGULATION BOARD

CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador 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, 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; (...) 12. Regulate the central payment system, as well as the regulation, permission, registration, surveillance and supervision of auxiliary payment systems; (...)”;

That, Article 40 of the aforementioned Code states: “(...) Entities of the national financial system and those qualified within auxiliary payment systems will participate in the collection of public resources, through collector accounts in the name of non-financial public entities, in accordance with the regulations issued by the Monetary Policy and Regulation Board. The balance of said accounts will be transferred to the accounts corresponding to the respective public institution at the Central Bank of Ecuador, in accordance with the regulation issued for this effect. (...)

Auxiliary payment systems may not collect public resources in their own accounts. (...)”;

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That, Article 103 of the aforementioned Code states: “The national payment system comprises the set of policies, norms, instruments, procedures and services through which transfers of resources managed through payment means and the settlement of values between its different participants are effected, directly or indirectly.

The national payment system is integrated by the central payment system and the auxiliary payment systems. The Central Bank of Ecuador will establish the requirements for authorization, operation, registration and disclosure of information of these systems. The corresponding tariff regime will be regulated by the Monetary Policy and Regulation Board.

The reports issued by the servants and officials of the Central Bank of Ecuador, in the exercise of the functions of supervision of the national payment system, will be written and reserved, as well as the documents that the General Manager qualifies as such, in order to safeguard the stability of the system. These reports will not be disclosed to third parties, in whole or in part, by the bank, by the supervised entity nor by any person acting on their behalf, except when required by the Monetary Policy and Regulation Board or when there are indications of criminal responsibility, which must be reported to the Attorney General's Office.”

That, Article 105 of the aforementioned norm provides: “Auxiliary payment systems are the set of policies, norms, instruments, procedures and services articulated and coordinated, public or private, authorized by the Central Bank of Ecuador, established to effect transfers of resources, money remittances or compensation between their different participants.”;

That, the first paragraph of Article 108 of the aforementioned Code establishes: “The Central Bank of Ecuador is the compensator and liquidator of resources in the central payment system and liquidator of resources in the auxiliary payment systems. These auxiliary systems, as well as the entities of the national financial system, will remit with the periodicity and in the form determined by the Monetary Policy and Regulation Board the detail and results of the compensation processes to be settled.”

That, Article 109 of the aforementioned Code determines: “The Central Bank of Ecuador will carry out the surveillance and supervision of the auxiliary payment systems and their administrative entities, as well as any payment infrastructure or transfer of monetary resources that act in the market, to ensure the

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correct functioning of the channels, instruments and payment means that are processed through them.

The Monetary Policy and Regulation Board will adopt the regulations to determine the operation, governance, risk control and financial requirements that auxiliary payment systems and their administrative agencies must comply with.

The administrators of auxiliary payment systems, including any payment infrastructure or transfer of monetary resources, for their operation must have the authorization of the Central Bank of Ecuador, and are obliged to remit the information that this requires and within the deadlines determined. (...)”

That, Article 110 supra states: “The Central Bank of Ecuador will order the application of corrective measures to the auxiliary payment systems that have failed to comply with the corresponding regulations.”; and, in concordance, Articles 111 and 112 of the same Code establish the corresponding infractions and sanctions;

That, the Fifty-Fourth Transitory Provision of the indicated Code prescribes: “The resolutions contained in the Codification of Monetary, Financial, Securities and Insurance Resolutions of the Monetary Policy and Regulation Board and Financial, 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 resolve what corresponds, within the scope of their competencies.”;

That, Chapter IV: “Of Auxiliary Payment Systems”, 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 Policy and Regulation Board and Financial, regulates everything related to entities classified as auxiliary payment systems and their administrative entities, as well as any payment infrastructure or transfer of monetary resources;

That, it is necessary to adapt the regulatory norms applicable to auxiliary payment systems that includes the scope and definitions, authorization, supervision and surveillance; and corrective measures, infractions and sanctions regarding auxiliary payment systems, in accordance with current regulations;

That, it is the faculty of the Monetary Policy and Regulation Board to resolve on the norm contained in the Codification of Monetary, Financial, Securities and Insurance Resolutions, issued by the former Monetary Policy and Regulation Board and Financial,

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that has to do with the monetary sphere, in order to incorporate said provisions into the own norm 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 March 11, 2022, reviewed the proposal sent via memorandum No. BCE-BCE-2022-0055-M of March 10, 2022, by the General Manager of the Central Bank of Ecuador to the President of the Monetary Policy and Regulation Board; as well as, the technical report No. BCE-DNRO-2022-040, of March 9, 2022, and the legal report No. BCE-CGJ-041-2022, of March 9, 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:

NORM THAT REGULATES AUXILIARY PAYMENT SYSTEMS

CHAPTER I.- SCOPE AND DEFINITIONS

Art. 1.- Auxiliary Payment Systems. As stated in the Organic Monetary and Financial Code, auxiliary payment systems are the set of policies, norms, instruments, procedures and services articulated and coordinated, public or private, established to effect transfers of resources, money remittances or compensation between their different participants.

Art. 2.- Scope. This norm governs all administrators of auxiliary payment systems (ASAP) and the services they provide to financial entities, financial users and establishments, under the terms established in the preceding article.

Art. 3.- The services that administrators of Auxiliary Payment Systems can provide are the following:

1. Payment aggregation.
2. Compensation.
3. Payment gateway.
4. Transactional switch for payment services.
5. Collection of public resources.
6. Money remittances.

Art. 4.- Definitions. For the purposes of this norm, the following definitions will be considered:

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1. Administrator of Auxiliary Payment Systems (ASAP): Entities of auxiliary services of the financial system authorized by the Central Bank of Ecuador, so that through a payment infrastructure they effect transfers of monetary resources or compensation between their different participants. Additionally, companies authorized by the Superintendence of Companies, Securities and Insurance to carry out money remittance activities are also ASAPs.

2. Payment Aggregation: Service by which an ASAP links affiliated commercial establishments to the payment system, through its service and technological infrastructure, to accept payments through the use of electronic payment means, collecting on behalf of such merchants the product of the settlement of authorized payments, to transfer or credit them in favor of the commerce. The payment aggregator must celebrate the agreements or contracts that correspond, both with the establishments, as with the acquirers.

3. Compensation: Process of recording operations and calculating net positions of transactions carried out by financial entities through the service administered by ASAPs.

4. Acquiring Entity: Entity of the financial system authorized to act as an operator of debit, credit or payment cards; as well as, to receive and process payments through the network of affiliated merchants and through the contracts signed to authorize payment aggregators to affiliate merchants.

5. Payment Gateway: Technological payment processing solution provided by an ASAP that allows accepting payments through the use of different electronic payment means, according to the agreements or contracts celebrated for this effect both with the establishments, as with the acquirers.

6. Transactional Switch for Payment Services: Technological service provided by an ASAP to integrate applications for payment or billing processing, between a point of sale and an establishment.

7. Resource Collection: Service of resource collection provided by an ASAP to public entities.

8. Money Remittances: Service offered by an ASAP for the delivery of money coming from abroad.
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CHAPTER II.- OF AUTHORIZATION

Art. 5.- Entities of auxiliary services of the financial system to provide services that imply transfers of resources or compensations and entities that provide the remittance service, must request from the Central Bank of Ecuador their authorization to operate as ASAP, complying with the requirements that by administrative resolution issued by the Central Bank of Ecuador.

Art. 6.- In the authorization issued by the Central Bank of Ecuador, the payment means related to the service to be granted, the channels to be used and the scope of the service will be specified.

These specifications and those that the Central Bank of Ecuador considers, will be in the authorization request for each type of service requested.

In any type of contract, agreement or arrangement that ASAPs sign with establishments, their clients, acquirers or any other natural or legal person, and that refer to their quality of ASAP, it must specifically state the type of service for which the authorization to act as ASAP has been granted.

Art. 7.- The authorization conferred by the Central Bank of Ecuador to the administrators of auxiliary payment systems does not constitute any guarantee or certification on the part of the Central Bank of Ecuador, regarding their legal, financial and operational capacity, nor does it represent any guarantee or certification regarding the operations of their participants.

Art. 8.- The administrators of auxiliary payment systems that are duly authorized and that carry out compensation processes of transactions carried out with electronic payment means, will settle their operations through the specialized clearing houses at the Central Bank of Ecuador.

CHAPTER III.- OF SURVEILLANCE AND SUPERVISION

Art. 9.- The surveillance and supervision exercised by the Central Bank of Ecuador regarding auxiliary payment systems, will include the evaluation of the operation, governance, risk control and financial requirements, promoting efficiency, interoperability and innovations.

Art. 10.- Administrators of auxiliary payment systems must remit to the Central Bank of Ecuador the information that this requires, in the periodicity and format that is established.
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RESOLUTION No. JPRM-2022-010-M

CHAPTER IV.- OF CORRECTIVE MEASURES, INFRACTIONS AND SANCTIONS

Art. 11. As a result of the supervision and surveillance carried out by the Central Bank of Ecuador, action plans with mandatory corrective measures may be requested, under the terms and deadlines established in the supervision reports.

In case of non-compliance with the action plan, the corresponding sanctions will be imposed, which will be notified by administrative resolution and communicated to the respective control body.

GENERAL PROVISIONS

FIRST. The Monetary Policy and Regulation Board recognizes the provisions contained in Chapter IV: “Of Auxiliary Payment Systems”, 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 Policy and Regulation Board and Financial, as part of the monetary regulation on which it corresponds to resolve.

SECOND. The settlement and distribution of payments that ASAPs carry out, will be carried out through the national financial system.

TRANSITORY PROVISIONS

FIRST. The General Management of the Central Bank of Ecuador within one (1) month will issue the necessary regulation for the implementation of what is resolved in this resolution.

SECOND: The Central Bank of Ecuador will elaborate a schedule for the supervision and surveillance of auxiliary payment systems and will make known to the Monetary Policy and Regulation Board the respective results report with a semi-annual periodicity and whenever specifically required.

THIRD: The Central Bank of Ecuador within three (3) months, will proceed to reclassify the categories of services granted to authorized auxiliary payment systems, according to the categories established in its resolution or in default revoke its authorization.

FOURTH: The Central Bank of Ecuador will carry out the follow-up of natural or legal persons who without having obtained the authorization to operate as ASAP, are providing this type of services and will take the corresponding legal measures.

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SINGLE REPEALING PROVISION.** Chapter IV: “Of Auxiliary Payment Systems”, 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 Policy and Regulation Board and Financial, is expressly repealed.

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

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

COMMUNICATE.** Given in the Metropolitan District of Quito, on March 11, 2022.

THE PRESIDENT

Signature: Tatiana Rodríguez

Dr. TATIANA MARIBEL RODRÍGUEZ CERÓN

The preceding resolution was signed by Dr. Tatiana Maribel Rodríguez Cerón - President of the Monetary Policy and Regulation Board, in the Metropolitan District of Quito, on March 11, 2022. I CERTIFY.

ADMINISTRATIVE SECRETARY

Signature: María Alexandra Guerrero

Law. MARÍA ALEXANDRA GUERRERO DEL POZO
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