News Alert: New rules on adequate guarantees, risk rating, and technical equity

Quito, March 2026 The Financial and Monetary Policy and Regulation Board (JPRFM) issued Resolution No. JPRFM-2026-012-F, reforming relevant provisions of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, introducing new prudential criteria applicable to adequate guarantees, investment management, and the calculation of technical equity for entities within the national financial system.

Below, we summarize the most relevant changes:

1. New risk rating requirements for sovereigns as adequate guarantees The possibility of establishing pledged financial investments in instruments issued by the following as adequate guarantees is expressly incorporated:

• Sovereign governments
• Central banks
• Multilateral organizations
• Supranational organizations

However, their acceptance is subject to minimum risk rating requirements:

• Sovereign governments and central banks: The country of origin must have a minimum rating of “AA-” or its equivalent, for long or short term, granted by Standard & Poor’s, Fitch Ratings, or Moody’s Investors Service.
• Multilateral and supranational organizations: These are exempt from the country risk rating requirement, but the issuing entity must likewise maintain a minimum rating of “AA-” or equivalent, granted by one of the aforementioned international agencies.

In the event of ratings provided by more than one agency, the most conservative rating rule (i.e., the lowest) shall mandatorily apply.

2. Express exclusion of securities linked to OFAC and UN lists The Resolution introduces an express and categorical prohibition:

• Securities issued by countries or entities appearing on the OFAC (Office of Foreign Assets Control) or United Nations restrictive lists may not be accepted as adequate guarantees.

This provision reinforces the focus on risk management, compliance, and the prevention of international sanctions, requiring financial entities to strengthen their due diligence processes regarding issuers and jurisdictions.

3. New investment weighting in technical equity The Resolution introduces relevant changes to the risk weighting factors applicable to investments for the purposes of calculating required technical equity:

• 0.00 Weighting: Investments in multilateral and supranational organizations that meet the established requirements.
• 0.10 Weighting: Investments in sovereign governments and central banks that meet the required risk rating standards.

These weightings favor assets considered to be of high credit quality and low risk, positively impacting the solvency indicators of financial entities.

4. Reporting obligations and entry into force

• Entities within the national financial system must report quarterly to their supervisory body the investments covered by this regulation, in the established formats.
• The Resolution entered into force upon its issuance on March 23, 2026, notwithstanding its publication in the Official Gazette.

Final Commentary These reforms align Ecuadorian regulation with international prudential standards, strengthen risk management, and promote investments in high-credit-quality assets. However, they also involve technical, accounting, and regulatory compliance adjustments, particularly regarding risk ratings, monitoring of restrictive lists, and technical equity calculations.

The content of this newsletter is for informational purposes only and does not, under any circumstances, constitute legal or professional advice. For specific cases, we recommend consulting with our specialists.