Organic Statute of the Financial Policy and Regulation Board (JPRF) — BCE — EC

Resolution No. JPRF-A-2022-044
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That, Article 226 of the Constitution of the Republic of Ecuador, published in the Official Register 449 of October 20, 2008, orders 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. They shall have 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 Magna Carta determines that: "Public administration constitutes a service to the community that is governed by the principles of effectiveness, efficiency, quality, hierarchy, decentralization, concentration, coordination, participation, planning, transparency, and evaluation";

That, Article 308 of the Fundamental Norm, first paragraph, establishes that: "Financial activities are a service of public order, and may be exercised, with prior authorization from the State, in accordance with the law; their fundamental purpose is to preserve deposits and meet financing requirements for the achievement of the country's development objectives. Financial activities efficiently intermediated the resources captured to strengthen national productive investment, and socially and environmentally responsible consumption";

That, Article 309 ibidem, provides that: "The national financial system is composed of the public, private, and popular and solidary sectors, which intermediated public resources. Each of these sectors shall have specific and differentiated control norms and entities, which shall be responsible for preserving their security, stability, transparency, and solidity. These entities shall be autonomous. The directors of the control entities shall be administratively, civilly, and criminally responsible for their decisions";

That, the Reforming Law to the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Supplement of the Official Register No. 443 of May 3, 2021, created the Financial Policy and Regulation Board as the institution responsible for the formulation of credit, financial, securities, insurance, and comprehensive prepaid health care services policy and regulation;

That, Article 9 of the Organic Law on Prevention, Detection, and Eradication of the Crime of Money Laundering and Financing of Crimes, Official Register Supplement 802 of July 21, 2016, establishes that the Financial Policy and Regulation Board shall exercise leadership in matters of money laundering and crime financing prevention, as well as issue public policies, regulation, and supervision, credit, exchange, financial, insurance, and securities, for the prevention of money laundering and crime financing;

That, Article 4 of the Law of the Bank of the Ecuadorian Social Security Institute, Official Register Supplement 587 of May 11, 2009, dictates that the Financial Policy and Regulation Board issues general norms to regulate the operations of the Ecuadorian Social Security Bank, as well as authorizes the BIESS to exercise additional activities;

That, the Organic Law Regulating Companies that Finance Comprehensive Prepaid Health Care Services and Insurance Companies that Offer Medical Assistance Insurance Coverage, published in the Supplement of the Official Register No. 863 of October 17, 2016, establishes in its First General Provision that the Financial Policy and Regulation Board shall have the power to issue regulations applicable to companies that finance comprehensive prepaid health care services, of an economic, financial, and accounting nature; and, in relation to the methodology and method of calculation of technical reserves;

Resolution No. JPRF-A-2022-044

That, the Organic Law of Humanitarian Support to combat the health crisis derived from Covid-19, Official Register Supplement 229 of June 22, 2020, in the Sixth General Provision, establishes that the Board must issue regulations to include within educational credit lines, an interest rate and term preferential in better conditions than the current ones for public financial entities and popular and solidary economy;

That, Article 14 of the Organic Monetary and Financial Code, Book I, substituted by the Reforming Law to the Organic Monetary and Financial Code for the Defense of Dollarization, published in the Supplement of the Official Register No. 443 of May 3, 2021, determines that, within the scope of competence of the Financial Policy and Regulation Board, it corresponds to: formulate credit, financial, including insurance, comprehensive prepaid health care services, and securities policies; issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and comprehensive prepaid health care services systems; issue micro-prudential regulations for the national financial, securities, insurance, and comprehensive prepaid health care services sectors; formulate policies and issue regulations that promote financial inclusion in the country; and, regulate the criteria and protocols to determine the existence of a systemic crisis, in consultation with the governing body of public finances; and, in the event that one or more of the criteria for determining its existence occur, the Institution shall communicate on the matter to the President of the Republic and shall have, within the scope of its competencies, the exclusive attribution to adopt the decisions and direct the actions it considers necessary to face them;

That, Article 19 of the Organic Monetary and Financial Code, Book I, in concordance with what is provided in Article 14.1, number 20 ibidem, provides that the Financial Policy and Regulation Board shall issue the norms that regulate its functioning;

That, Article 143 of the same Organic Code conceptualizes financial activities and determines: "For the purposes of this Code, these are the operations and services linked to financial flows or risks; and that, are carried out habitually, by the entities that make up the financial, securities, and insurance systems, with prior authorization from the control bodies, using, under any title, third-party resources for credit operations; investment in fixed or variable income securities; insurance services; services or instruments for risk management and protection; buy-sell, intermediation, or subscription services of securities; as well as for other operations defined by the Financial Policy and Regulation Board based on the development or innovation of the financial services, securities, and insurance market. Financial activities are a service of public order, regulated and controlled by the State.";

That, Article 9 of the Code ibidem, Book II, mentions that the Board shall ensure the observance and compliance of the norms governing the securities market; regulate concerning activities and operations of the securities market, accounting and operation recording systems, and other aspects of the performance of participants in the market;

That, Article 84 of the Commercial Code, Official Register Supplement 497 of May 29, 2019, mentions that the Board issues regulations for securities traded on the stock exchange, in Art. 112, dictates that the Financial Policy and Regulation Board issues regulations for the assignment of Securities;

That, through Office No. SPN-SNP-2022-0369-OF of April 29, 2022, the National Planning Secretariat, issues the Institutional Relevance Report in the Territory of the Financial Policy and Regulation Board where it indicates that the JPRF will not have decentralization, in order to continue with the process of designing institutional management instruments;

Resolution No. JPRF-A-2022-044

That, with Office No. MEF-DM-2022-0337-O of October 7, 2022 and addendum with Office No. MEF-DM-2022-0348-O of October 14, 2022, the Ministry of Economy and Finance, issues a favorable budgetary opinion for the redesign of the Institutional Structure, the Organic Statute, and the job valuation of the Higher Hierarchical Level of the Financial Policy and Regulation Board;

That, with Office No. MDT-VSP-2022-0358-O, of October 19, 2022, the Ministry of Labor, approves and issues a favorable report for the redesign of the Institutional Structure, Organic Statute, and job valuation of the Higher Hierarchical Level of the Financial Policy and Regulation Board;

That, the Technical Secretariat of the Financial Policy and Regulation Board through Memorandum No. JPRF-SETEC-2022-0076-M of November 1, 2022, sends to the President of the Institution, the Technical Report No. JPRF-UATH-2022-043 of October 31, 2022 and the Legal Report No. JPRF-CJ-2022-0044 of October 31, 2022, which support the relevance of the Institution having the Organic Statute;

That, the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on November 1, 2022, on November 2, 2022, resolved to know the Technical Report No. JPRF-UATH-2022-043 of October 31, 2022 and the Legal Report No. RF-CJ-2022-0044 of October 31, 2022, regarding the viability of issuing the Organic Statute in the terms contained in this resolution; and,

In exercise of its constitutional and legal powers and attributions;

RESOLVES:
Issue the ORGANIC STATUTE OF THE FINANCIAL POLICY AND REGULATION BOARD

CHAPTER I
ON STRATEGIC DIRECTION
Article 1.- The Financial Policy and Regulation Board aligns with its mission and defines its Organizational Structure supported by its legal basis and institutional strategic direction determined in its Competency Matrix, Institutional Planning, and Institutional Management Model.

Article 2.- Mission: Promote the well-being of Ecuadorian society, safeguard financial stability, and foster inclusion through the formulation of policies and regulations.
Vision: Build an institution that generates confidence in financial actors and society, based on best practices and innovative principles.

Article 3.- Principles and Values: The servants and workers of the Financial Policy and Regulation Board, for the daily performance of their competencies, attributions, and activities, shall observe the values and principles detailed below:

Integrity: as an ethical principle linked to the valuation of honesty, respect, and transparency in professional and personal interactions.
Honesty: which shall be understood as a basic moral value related to always acting with truth, remaining free from falsehood and lies.
Respect: which must be reflected in consideration in interpersonal relationships within the framework of tolerance and observance of human rights and dignity in all interactions with internal and external users, demonstrating permanently a positive attitude and service, through: Punctuality, Cordiality; Empathy and welcome to norms, principles, and democratic values.

Resolution No. JPRF-A-2022-044

Transparency: refers to the behavior that allows guaranteeing access to clear and timely information about its actions, resources, and decisions.
Responsibility: refers to the person's awareness that allows them to reflect, administer, guide, and value the consequences of their actions.
Loyalty: understood as that value of maintaining a noble attitude, rectitude, and defense of the institution's interests over any particular, personal, or external interest.
Independence: which must be reflected in the formulation of policies and technical norms based on objective facts, recognizing its autonomy within the limits established by law.
Confidentiality: refers to the moral obligation to maintain confidentiality regarding information, decisions, and facts that, being part of the institution, are not necessary to disclose outside of it.
Inclusion: understood as the capacity to integrate individual differences, experiences, and identities, allowing each collaborator to feel valued and integrated into the institution.
Quality: with the purpose of satisfying the expectations of internal and external clients, in addition to implementing a culture of continuous improvement as a path to excellence.

Article 4.- Institutional Objectives:

Formulate policy and issue regulations for the financial sector applying best practices.
Formulate policy and issue regulations for the securities market sector applying best practices.
Formulate policy and issue regulations for the insurance and prepaid medicine sector applying best practices.
Formulate policy and issue regulations based on best practices to promote financial inclusion.
Strengthen the institutional capacities of the Financial Policy and Regulation Board.

CHAPTER II
ON THE SERVICE QUALITY MANAGEMENT COMMITTEE
AND INSTITUTIONAL DEVELOPMENT
Article 5.- Service Quality Management and Institutional Development Committee.- In accordance with what is provided in Article 138 of the General Regulation to the Organic Law of the Public Sector (LOSEP), the Financial Policy and Regulation Board has the Service Quality Management and Institutional Development Committee, which shall have the responsibility to propose, monitor, and evaluate the application of policies, norms, and priorities relative to the improvement of institutional efficiency.

The Committee shall have the quality of permanent, and shall be integrated by:
a) The nominating authority or its delegate, who shall preside; b) The person responsible for the strategic management process; c) One person responsible for each of the processes or administrative units; and, d) The person responsible for the UATH or their substitute.

CHAPTER III
ON PROCESSES AND ORGANIZATIONAL STRUCTURE
Article 6.- Institutional Processes.- To fulfill the mission of the Financial Policy and Regulation Board, determined in its strategic planning and institutional management model, the following processes shall be managed in the Organizational Structure:

Governing Processes.- Those processes that provide guidelines, policies, and strategic plans, for the direction and control of the Financial Policy and Regulation Board.
Substantive Processes.- Those processes that carry out essential activities to provide the products offered to its clients and/or users, which are focused on fulfilling the mission of the Financial Policy and Regulation Board.
Adjective Processes.- Those processes that provide products or services to the governing and substantive processes, classified into advisory and support adjective processes.

Article 7.- Graphic Representation of Institutional Processes.
Value Chain:

Article 8.- Organizational Structure. – The Financial Policy and Regulation Board, for the fulfillment of its competencies, attributions, mission, and vision, and management of its processes, has defined the following Organizational Structure:

CENTRAL MANAGEMENT LEVEL
1.1. Governing Body.-
Responsible: Members of the Financial Policy and Regulation Board
1.2. Governing Processes:
1.2.1. Director Level.-
1.2.1.1. Strategic Direction.
Responsible: President of the Financial Policy and Regulation Board
1.3. Substantive Processes:
1.3.1. Director Level.-
1.3.1.1. Technical Direction.
Responsible: Technical Secretary

Resolution No. JPRF-A-2022-044

1.3.2. Operational Level.-
1.3.2.1. Technical Management of Policy and Regulation of the Financial System
Responsible: Technical Coordinator of Policy and Regulation of the Financial System
1.3.2.1.1. Technical Management of the Private and Public Financial Sector
Responsible: Technical Director of the Private and Public Financial Sector
1.3.2.1.2. Technical Management of the Popular and Solidary Financial Sector
Responsible: Technical Director of the Popular and Solidary Financial Sector
1.3.2.2. Technical Management of Policy and Regulation of the Securities and Insurance System
Responsible: Technical Coordinator of Policy and Regulation of the Securities and Insurance System
1.3.2.2.1. Technical Management of the Securities Sector
Responsible: Technical Director of the Securities Sector
1.3.2.2.2. Technical Management of the Insurance Sector
Responsible: Technical Director of the Insurance Sector
1.3.2.3. Technical Management of Financial Inclusion and Prepaid Health Policy
Responsible: Technical Coordinator of Financial Inclusion and Prepaid Health Policy
1.3.2.3.1. Technical Management of Financial Inclusion
Responsible: Technical Director of Financial Inclusion
1.3.2.3.2. Technical Management of Financial Users
Responsible: Technical Director of Financial Users
1.3.2.4. Legal Management of Financial Policy and Norms
Responsible: Legal Coordinator of Financial Policy and Norms
1.3.2.4.1. Legal Management of the Financial System and Financial Inclusion
Responsible: Legal Director of the Financial System and Financial Inclusion
1.3.2.4.2. Legal Management of the Securities, Insurance, and Prepaid Health System
Responsible: Legal Director of the Securities, Insurance, and Prepaid Health System
1.4. Adjective Processes:
1.4.1. Advisory Level.-
1.4.1.1. Strategic Planning and Management Management
Responsible: Person in charge of the Strategic Planning and Management Unit
1.4.1.2. Social Communication Management
Responsible: Person in charge of the Social Communication Unit
1.4.2. Support Level.-
1.4.2.1. Financial Administrative Management
Responsible: Financial Administrative Director
1.4.2.1.1. Human Talent Administration Management
Responsible: Person in charge of the Human Talent Administration Unit
1.4.2.1.2. Administrative Management
Responsible: Person in charge of the Administrative Unit

Resolution No. JPRF-A-2022-044

1.4.2.1.3. Financial Management
Responsible: Person in charge of the Financial Unit
1.4.2.2. General Secretariat Management
Responsible: Person in charge of the General Secretariat Unit

Article 9.- Graphic Representation of the Organizational Structure:
Organizational Structure of the central level:

CHAPTER IV
ON THE DESCRIPTIVE INSTITUTIONAL STRUCTURE
Article 10.- Descriptive Organizational Structure. - In accordance with the structural index established in Article 8, below, the descriptive organizational structure is detailed, in accordance with the following scheme:

CENTRAL MANAGEMENT LEVEL
1.1 Governing Body

Mission
Formulate credit, financial, securities, insurance, and comprehensive prepaid health care services policy and regulation, through the issuance of regulations and resolutions, to maintain the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and comprehensive prepaid health care services systems; and, promote financial inclusion.

Resolution No. JPRF-A-2022-044

Responsible: Members of the Financial Policy and Regulation Board
Attributions and Responsibilities
a) Dictate policies in the credit, financial, insurance, securities, and comprehensive prepaid health care services fields; b) Issue policies and regulations to promote financial inclusion, promoting the participation of the public and private sectors; c) Issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial, securities, insurance, and comprehensive prepaid health care services systems; d) Issue norms, regulations, resolutions, and other documents related to the financial, securities, insurance, and comprehensive prepaid health care services sectors; e) Interpret or reform regulations or resolutions related to the financial, securities, insurance, and comprehensive prepaid health care services sectors; f) Present to the President of the Republic proposals for the creation or modification of legislation in financial, securities, insurance, and comprehensive prepaid health care services matters; g) Present the Financial Stability Report to the National Assembly, elaborated in coordination with the Central Bank of Ecuador and the superintendencies; h) Regulate the criteria and protocols to determine the existence of a systemic crisis, in consultation with the governing body of public finances. In the event that one or more of the criteria for determining the existence of a systemic crisis occur, communicate on the matter to the President of the Republic. Adopt the decisions and direct the actions it considers necessary to face it, pertaining to the national financial system and the securities, insurance, and comprehensive prepaid health care services systems, through the corresponding control bodies based on the respective technical reports; i) Establish measures to prevent and seek to eradicate fraudulent and prohibited practices, including money laundering and the financing of crimes such as terrorism, considering the current and applicable international standards; j) Establish measures to protect the privacy of individuals in relation to the dissemination of their personal information, as well as national security information; k) Request from the Superintendent of Banks, the Superintendent of Companies, Securities, and Insurance; the Superintendent of Popular and Solidary Economy; and, the General Manager of the Corporation for Deposit Insurance, Liquidity Fund, and Private Insurance Fund, reports on the situation of the entities or areas under their charge, as well as specific analyses and reports or proposals for financial regulation and control results; l) Know and resolve the proposals for regulation projects presented by the Superintendent of Banks, the Superintendent of Companies, Securities, and Insurance; the Superintendent of Popular and Solidary Economy; the President of the Monetary Policy Board; and the Corporation for Deposit Insurance, Liquidity Fund, and Private Insurance Fund, through its legal representative, with the backing of the respective technical reports;
m) Require non-binding comments from entities of the national financial system, control bodies, and others it considers necessary, regarding preventive regulation proposals, prior to their approval; n) Present to the President of the Republic and the National Assembly the institutional management report; o) Approve the strategic plan, Code of

Resolution No. JPRF-A-2022-044

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