Resolution No. JPRF-F-2024-096: Standard for the Application of the First Transitory Provision of the Organic Law Reforming Various Legal Bodies for the Strengthening, Protection, Promotion, and Impulse of Popular and Solidarity Economy Organizations

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
Resolution No. JPRF-F-2024-096
THE FINANCIAL POLICY AND REGULATION BOARD
CONSIDERING:
That Article 132, number 6 of the Constitution of the Republic of Ecuador determines that a law will be required to “6. Grant public control and regulation bodies the authority to issue general norms in matters within their competence, without altering or innovating legal provisions.”; That Article 226 of the Magna Carta mandates that State institutions, their bodies, 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; That Article 227 ibid establishes that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, participation, and others; That Article 303 of the Fundamental Law determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Branch; That Article 309 of the Supreme Norm signals that the national financial system is composed of the public, private, and popular and solidarity sectors, which intermediated public resources, which will have specific and differentiated control norms and entities, which will be responsible for preserving their security, stability, transparency, and solidity; That Article 311 ut supra prescribes that the popular and solidarity financial sector will be composed of savings and credit cooperatives, associative or solidarity entities, communal banks and savings banks; That Article 13 of the Organic Monetary and Financial Code, Book I, reformed by the Organic Law Reforming the Organic Monetary and Financial Code for the Defense of Dollarization, published in Official Register No. 443 on May 3, 2021, created the Financial Policy and Regulation Board as a legal person of public law and responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation; That Article 14 of the aforementioned Code provides that it corresponds to the Financial Policy and Regulation Board, among others, to issue microprudential regulations for the national financial, securities, insurance, and prepaid comprehensive health care services sectors; That Article 14.1 ibid grants the Financial Policy and Regulation Board, among others, the following duties and faculties: “1. Regulate the creation, constitution, organization, activities, operation, and liquidation of financial entities, securities, insurance, and prepaid comprehensive health care services; (…) 27. Exercise the other functions, duties, and faculties assigned to it by this Code and the law. (…)”; That Article 150 of the aforementioned legal body establishes that entities of the national financial system will be subject to the regulation issued by the Financial Policy and Regulation Board; That Article 160 ibid stipulates that the national financial system is integrated by the public financial sector, the private
financial sector, and the popular and solidarity financial sector;

Resolution No. JPRF-F-2024-096

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
That Article 163 of the aforementioned Code and Article 78 of the Organic Law of the Popular and Solidarity Economy determine that the popular and solidarity financial sector is composed of savings and credit cooperatives, associative or solidarity entities, communal banks and savings banks; That Article 444 of the Organic Monetary and Financial Code, Book I, and Article 144 of the Organic Law of the Popular and Solidarity Economy stipulate that popular and solidarity financial entities are subject to the regulation of the Monetary and Financial Policy and Regulation Board; That General Provision Twenty-Ninth of the Organic Monetary and Financial Code, Book I, provides that in current legislation where mention is made of the “Monetary and Financial Policy and Regulation Board,” replace it with “Financial Policy and Regulation Board”; That the last paragraph of Article 54 of the Organic Law of the Popular and Solidarity Economy, reformed by the Organic Law Reforming Various Legal Bodies, for the Strengthening, Protection, Promotion, and Impulse of Organizations of the Popular and Solidarity Economy, Artisans, Small Producers, Microenterprises, and Entrepreneurship, published in Official Register Supplement No. 311 on May 16, 2023, establishes that: “Savings and credit cooperatives are exempt from the form of surplus distribution contained in this article. These may allocate the balance of surpluses, if any, to the payment of an annual interest for contribution certificates, which will be regulated by the Financial Policy and Regulation Board in accordance with existing regulations. In all other respects, they will be subject to what is provided in the Organic Monetary and Financial Code.”; That the First Transitory Provision of the aforementioned Organic Law prescribes that: “Within the term of 180 days following the publication of this Law in the Official Register, the Financial Policy and Regulation Board will issue the regulation for the payment of an annual interest for contribution certificates, which will be paid from the surpluses, if any.”; That the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2024-0014-M of February 1, 2024, submits to the President of the Board the Technical Report No. JPRF-CTSF-2024-001 and the Legal Report No. JPRF-CJF-2024-003, both of February 1, 2024; That the Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on February 1, 2024, and carried out via video conference on February 2, 2024, reviewed the Memorandum No. JPRF-ST-2024-0014-M of February 1, 2024, issued by the Technical Secretary of the Board; as well as the Technical Report No. JPRF-CTSF-2024-001 and the Legal Report No. JPRF-CJF-2024-003 of February 1, 2024, issued by the Technical Coordination of Policy and Regulation of the Financial System and by the Legal Coordination of Policy and Financial Norms, and the corresponding draft resolution; That the
Financial Policy and Regulation Board, in an extraordinary session held by technological means, convened on February 1, 2024, and carried out via video conference on February 2, 2024, reviewed and approved the following Resolution; and, In exercise of its functions,

Resolution No. JPRF-F-2024-096

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Government Financial Management Platform. Red Block, 8th floor
| Postal Code: 170507 | Quito - Ecuador |
RESOLVES:
SINGLE ARTICLE.- Incorporate Section XXVIII “Standard for the Application of the First Transitory Provision of the Organic Law Reforming Various Legal Bodies, for the Strengthening, Protection, Promotion, and Impulse of Organizations of the Popular and Solidarity Economy, Artisans, Small Producers, Microenterprises, and Entrepreneurship” following Section XXVII “Standard for Social Balance for Savings and Credit Cooperatives and Mutual Savings Associations for Housing”, Chapter XXXVI “Popular and Solidarity Financial Sector”, 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 XXVIII: STANDARD FOR THE APPLICATION OF THE FIRST TRANSITORY PROVISION OF THE ORGANIC LAW REFORMING VARIOUS LEGAL BODIES, FOR THE STRENGTHENING, PROTECTION, PROMOTION, AND IMPULSE OF ORGANIZATIONS OF THE POPULAR AND SOLIDARITY ECONOMY, ARTISANS, SMALL PRODUCERS, MICROENTERPRISES, AND ENTREPRENEURSHIP Art. 425.- In accordance with the last paragraph of Article 54 of the Organic Law of the Popular and Solidarity Economy, Savings and Credit Cooperatives may dispose of the payment of an interest with the balance of their surpluses, if any, as resolved by the General Assembly. The payment of such distribution must be carried out in an equitable and solidarity manner, in accordance with the principles governing the Popular and Solidarity Economy, established in said Law.” FINAL PROVISION.- This Resolution will enter into force from its publication in the Official Register. Publish this Resolution on the website of the Financial Policy and Regulation Board, within a maximum term of two days from its issuance. COMMUNICATE.- Given in the Metropolitan District of Quito, on February 2, 2024. THE PRESIDENT, Mgs. María Paulina Vela Zambrano The preceding Resolution was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on February 2, 2024.- I CERTIFY. TECHNICAL SECRETARY, Mgs. Nelly Arias Zavala