Resolution JPRFM-2025-005-F Approving Reforms to Chapter XL on Closed Supplementary Pension Funds

RESOLUTION NO. JPRFM-2025-005-F
THE BOARD OF FINANCIAL AND MONETARY POLICY AND REGULATION

CONSIDERING:

That, number 6 of article 132 of the Magna Carta of Ecuador grants public control and regulatory bodies the authority to issue general norms in matters within their competence, without altering or innovating legal provisions;

That, the Constitution of the Republic of Ecuador, in article 226, prescribes that public servants and persons acting by virtue of state power shall exercise only the competencies and faculties attributed to them in the Constitution and the Law;

That, article 227 ibid states that the 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 Branch and will be implemented through the Central Bank of Ecuador;

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

That, the reformed article 13 of the Organic Code of Monetary and Finance creates the Board of Financial and Monetary Policy and Regulation, part of the Executive Branch, as an organ with functional, technical, and institutional autonomy, and in its decisions, 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, number 22 of article 18 ibid, among the specific functions of the Board, in the financial scope, establishes: "(...) 22. Regulate the constitution, organization, operation, liquidation, and registration of supplementary pension funds and their investments, as well as the minimum requirements to hold the position of administrators; (...)";

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 shall 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 ibid 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 that support regulatory proposals, provide technical and administrative support to the Board of Financial and Monetary Policy and Regulation, and those assigned by said Board;

That, General Provision Twenty-Ninth ibid 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, the Law on Credit Strengthening and Sustainability was published in the Fifth Supplement of the Official Register No. 136, of October 1, 2025;

That, the Second Transitional Provision of the aforementioned Law on Credit Strengthening and Sustainability, in its pertinent part, establishes:

"(...) The Board of Financial Policy and Regulation, or whoever acts on its behalf, within a maximum period of thirty (30) days counted from the publication of this Law, will issue secondary regulation that governs the transition process, which will also contain the requirements and procedures for the determination of the members and representatives of the Funds. This regulation will be mandatory for the Bank of the Ecuadorian Institute of Social Security. The transition period must be carried out within a maximum of four (4) months counted from the issuance of the regulation referred to in the preceding paragraph, except for exceptions motivated by the Superintendency of Banks. The Superintendency of Banks must issue reforms or normative provisions in the scope of its competencies, within the framework of the transition process of the Closed Supplementary Pension Funds in favor of the decision of their participants, within the maximum period defined by the Board in its secondary regulation";

That, Section V "On the Return Process of the Administration of the Closed Supplementary Pension Funds to the Participants", Chapter XL "On the Closed Supplementary Pension Funds", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, contains norms for the transition of administration of the Closed Supplementary Pension Funds;

That, the First Transitional Provision of the Organic Law Reforming the Organic Code of Monetary and Finance 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, of September 5, 2025, signed by the Constitutional President of the Republic, addressed to the President of the National Assembly, he sent the list of candidates for the designation of the Members of the Board of Financial Policy and Regulation; 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; María Isabel Camacho Cárdenas; and, Jeniffer Nathaly Rubio Abril;

That, the Board of Financial and Monetary Policy and Regulation, through ordinary session No. 005-2025, under mixed modality, on October 31, 2025, reviewed the proposal sent via Memorandum No. BCE-BCE-2025-0242-M, of October 29, 2025, by the General Manager of the Central Bank of Ecuador to the President of the Board of Financial and Monetary Policy and Regulation, as well as the Technical Report No. BCE-GEEE-053-2025/BCE-SEMF-076-2025, of October 29, 2025, and the Legal Report No. BCE-GJ-050-2025, of October 29, 2025; and,

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

RESOLVES:

Article 1.- Add article 32.1, immediately after article 32, in Paragraph I "On the general assembly" of Subsection IV "On government and administration" of Section II "Norms that regulate the constitution, registration, organization, operation, and liquidation of the Closed Supplementary Pension Funds", Chapter XL "On the Closed Supplementary Pension Funds", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following text:

"Art. 32.1. - It will correspond to the general assembly of participants or representatives to decide whether the legal representative of the CSF will be a natural or legal person of private law.
Likewise, it will correspond to that instance to elect, prior to a merit and opposition contest, the legal representative of the CSF".

Article 2.- Substitute article 33 of Paragraph II "On the board of directors" of Subsection IV "On government and administration" of Section II "Norms that regulate the constitution, registration, organization, operation, and liquidation of the Closed Supplementary Pension Funds", Chapter XL "On the Closed Supplementary Pension Funds", 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. 33.- Board of Directors of the CSF. The administration of the CSF will be in charge of a Board of Directors, integrated by five (5) or seven (7) principal members, with their respective alternates, as provided by the CSF statute.
The term of office of the members of the Board of Directors will be two (2) years, and they may be reelected only once.
The members of the Board of Directors must be participants, who must meet the regulatory requirements established by the Superintendency of Banks for their qualification".

Article 3.- Add, immediately after article 36, in Paragraph III "On the legal representative" of Subsection IV "On government and administration" of Section II "Norms that regulate the constitution, registration, organization, operation, and liquidation of the Closed Supplementary Pension Funds", Chapter XL "On the Closed Supplementary Pension Funds", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following articles:

"Art. 36.1.- Legal persons must meet the following requirements:

1. Legal personality and corporate object linked to the administration of CSFs or financial administration, which will be evidenced through the deed of constitution, with at least three years of experience;
2. Have a legal representative, for which purpose a valid appointment duly registered in the corresponding public registry will be presented;
3. Not have pending obligations with the Superintendency of Companies, Securities, and Insurance, which will be verified with the respective certificate of compliance with obligations from that control body;
4. Not have pending obligations with the Internal Revenue Service and the Ecuadorian Institute of Social Security, which will be verified with separate certificates issued by these institutions;
5. Not have been declared a non-compliant contractor or failed bidder by the State, which will be verified with the respective certificate issued by SERCOP;
6. Not have firm responsibilities, administrative or civil, established by the Comptroller General of the State;
7. The legal representative, shareholders, or partners cannot be participants of any CSF, for which purpose sworn declarations will be presented that certify such fact;
8. The Head or Coordinator of the technical team assigned for the administration of the CSF must have a fourth-level academic degree in economics, finance, or business administration, which will be accredited with SENESCYT certificates;
9. The technical team assigned for the administration of the CSF must demonstrate verifiable experience of at least three years at director levels in one of the following institutions: entities of the social security system in positions linked to the administration and investment of CSFs; administrators of CSFs; institutions in the financial sector. This requirement will be accredited through the IESS work history, tax withholding receipts, or equivalent documents issued abroad;
10. Certificate issued by the Financial and Economic Analysis Unit "UAFE" that the legal representative, attorney-in-fact, partners, or shareholders are not registered in the database of persons with firm conviction sentences for crimes related to substances subject to control provided for in the Organic Integral Penal Code;
11. Declaration of the legal representative certifying: (i) having physical and technological infrastructure to support the operational level of the CSF to which it applies; (ii) having the capacity to generate information for control bodies and its administration; (iii) having an information security audit based on ISO27001 standard; and, (iv) having an ethical hacking study, with respective action plans to remediate vulnerabilities if found; and,
12. Have a Code of Ethics and adherence agreements from all members of the team assigned to the management of the CSF, based on IOSCO (International Organization of Securities Commissions) guidelines or ISO 31000.

Art. 36.2.- The selection of the legal representative or manager of the CSFs will be carried out, in all cases and without exception, through a public merit and opposition contest, where the most suitable person, natural or legal, will be selected.
The merit and opposition contest will be processed by the board of directors of the CSF and will have two phases: (i) Merit Phase, where the documents presented by the applicants will be analyzed, verified, and qualified, in accordance with the corresponding regulatory requirements applicable to them; and, (ii) Opposition Phase, where the results report of the merit phase will be made known to the participants to, if applicable, resolve any claim or observation that arises.

Art. 36.3.- The qualification rules will be clear, prior, and public, with objective qualification criteria, making the selection of the best candidates to form a shortlist to be constituted by the board of directors predictable and verifiable.
The merit and opposition contest procedure will be approved and carried out by the board of directors, under principles of legality, transparency, and equality. The qualification criteria established must promote the appointment of a professional administration, with extensive experience and impeccable probity.
It corresponds to the general assembly of participants or representatives to designate the legal representative.

Art. 36.4.- The legal representatives of the CSFs currently in office, whose ratification is resolved by the general assembly of participants or representatives, will not need to participate in the merit and opposition contests promoted, provided they meet the requirements established in the current regulatory framework.

Art. 36.5.- The consideration that the CSF recognizes to the administrator for their services will be established by the board of directors, and made known to the general assembly of participants or their representatives.

Art. 36.6.- The legal representative, prior to being sworn in, must obtain the qualification of the Superintendency of Banks. In the qualification process, in addition to regulatory requirements, compliance with the regulated process for their designation will be verified".

Article 4.- Substitute Section V "On the Return Process of the Administration of the Closed Supplementary Pension Funds to the Participants", Chapter XL "On the Closed Supplementary Pension Funds", 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:

"SECTION V: NORM FOR THE TRANSITION OF THE ADMINISTRATION OF THE CLOSED SUPPLEMENTARY PENSION FUNDS TO THEIR PARTICIPANTS

Art. 179.- Object and Purpose. - This norm aims to establish the legal and operational regime applicable for the transition of the administration of the CSFs to their participants, in accordance with the provisions of the Law on Credit Strengthening and Sustainability.
Its purpose is to guarantee an orderly, transparent, technically supported process with continuity in pension coverage, preserving the rights of participants, ensuring the financial sustainability of the funds, and strengthening supervision mechanisms.

Art. 180.- Guiding Principles. - The administration transition process will be governed by the following principles:
a) Solidarity and pension sustainability, prioritizing the preservation of acquired participant rights and the financial stability of the funds. b) Transparency and accountability, through the complete and verifiable delivery of information and audited financial statements. c) Administrative continuity, avoiding interruptions in the payment of benefits and pension services. d) Temporality and gradualness, establishing defined deadlines for the transition and adaptation of administrative structures. e) Public control and social participation, through the supervision of the Superintendency of Banks and the active participation of participants in decision-making.

Art. 181.- Scope of Application. - The provisions of this norm are mandatory for all CSFs currently maintained under the administration of the Bank of the Ecuadorian Institute of Social Security (BIESS) and which will be transferred to the direct administration of their participants.

Art. 182.- Legal Representative. - The current legal representative of the CSF will remain in office during the transition process, without the need for ratification by the general assembly of participants or representatives, nor requiring a new qualification process by the Superintendency of Banks.
Such functions will be exercised until the legal representative is duly replaced or ratified, in accordance with the provisions established herein.

Art. 183.- Call for the general assembly of participants or representatives. – The legal representative, within a term of three (3) days counted from the issuance of this resolution, must call the general assembly of participants or representatives, which must be held within a maximum term of five (5) days.
In said assembly, the legal representative will present a detailed report containing the current legal, financial, administrative, and technological situation of the CSF.
Once the information on the CSF situation is presented, and given that BIESS cannot continue with its administration once the transition process is concluded, the general assembly of participants or representatives must resolve, in accordance with the provisions of this section, one of the following options:
a) Continue operation under private administration; b) Facilitate a merger process; or, c) Order voluntary dissolution and liquidation Within a term of five (5) days, counted from the celebration of the assembly, the legal representative of the CSF must notify the Superintendency of Banks and the BIESS of the decision adopted by the general assembly of participants or representatives, sending a certified copy of the respective minutes.

Art. 184.- Formation of the Temporary Board of Directors. – In case the general assembly of participants or representatives resolves to continue the operations of the CSF, under a private administration regime, the members of the temporary board of directors must be appointed in the same Assembly. The members of the temporary board of directors will be selected in accordance with the number of votes each candidate obtains, and the documentation required for the qualification of the aforementioned temporary board members must be sent to the Superintendency of Banks within a term of five (5) days. The Superintendency of Banks, for its part, must carry out the qualification process of the aforementioned members within a maximum term of thirty (30) days, in accordance with current legal regulation.

Only for this transition period, the temporary board of directors will be integrated by three (3) or five (5) members, without the need to designate alternates. The designated members must meet the requirements to be qualified, in accordance with the regulation issued by the Superintendency of Banks.
The members of the temporary board of directors will remain in office until the definitive board of directors is designated, in accordance with the provisions established in this section.

Art. 185.- Duration of the administration transition. – The administration transition process begins from the issuance of this norm until the signing of the handover-receipt act between the legal representative or delegate of BIESS, the temporary board of directors, and the legal representative of the CSF.
This period cannot exceed a maximum term of four (4) months.
The request for the signing of the handover-receipt act with the formal communication of the temporary board members qualified by the Superintendency of Banks must be presented to BIESS, with a notice period of one (1) month, prior to the expiration of the aforementioned four (4) months.
Once the act is signed, the CSF will assume full administrative, patrimonial, and operational autonomy, and the responsibility of BIESS will cease, without prejudice to that derived from its actions during the period in which it exercised the administration of the CSF.

Art. 186.- Handover-Receipt Act. – The legal representative or delegate of the Bank of the Ecuadorian Institute of Social Security, in their capacity as outgoing administrator of the CSF, must sign the handover-receipt act with the temporary board of directors of the CSF and its legal representative.
This act must contain a report that includes, at a minimum, the following information:
a) Legal and financial situation of the CSF from the last fiscal year; b) Detail of individual participant accounts as of the month immediately preceding the signing of the act; c) Balance sheet and income statement, as of the month immediately preceding the signing of the act; d) Total number of active and inactive participants, as of the month immediately preceding the signing of the act; e) Detail of administrative expenses incurred by the CSF in the last fiscal year;

f) The list of administrative and service personnel linked to the CSF, with the detail of the status of labor obligations, as of the month immediately preceding the signing of the act; g) The last management report of the legal representative of the CSF; h) Information on judicial and extrajudicial actions in progress, as of the month immediately preceding the signing of the act; i) The status of technological, administrative, and financial infrastructure, as of the month immediately preceding the signing of the act;