The Board of Financial and Monetary Policy and Regulation (the "Board") issued, on August 20, Resolution JPRFM-2026-034-V (the "Resolution"), introducing substantial changes to the regulation of fund and trust administrators (the "Administrators"). The Resolution establishes new equity parameters and limits for these entities.

Minimum Equity. –

Minimum equity is made up of two parts.

• Fixed component. – The fixed component of USD 400,000.00 is maintained, corresponding to the minimum capital already required by law to incorporate and authorize the operation of an Administrator.
• Variable component. – Calculated on the net assets of the investment funds managed by each entity, applying decreasing rates according to the volume under management. The scheme is progressive and cumulative.
• From 0 to USD 50 million: 1.81% of net assets under management.
• From USD 50 million to USD 150 million: 1.60% on this bracket.
• From USD 150 million to USD 300 million: 1.25%.
• From USD 300 million to USD 700 million: 0.99%, and
• Above USD 700 million: 0.88%.

The larger the volume under management, the lower the required equity coefficient, in recognition that larger Administrators generally have more sophisticated risk and liquidity structures. Nonetheless, compliance remains mandatory at all times, without exception.

Regulatory Equity. –

The Resolution precisely defines "regulatory equity" by specific reference to financial statement accounts. The following accounts are added together:

• 301 (capital, less the minimum capital required when the Administrator has other corporate purposes),
• 303 (share premium from primary stock issuance),
• 304 (reserves),
• 306 (retained earnings), and
• 307 (current-year results). This ensures that the measurement is objective, auditable, and free of conflicting interpretations between the competent authority (the "SCVS") and the regulated entities.

The Resolution establishes that regulatory equity must be, at all times, equal to or greater than the required minimum equity. Non-compliance constitutes a breach of the prudential parameters. The consequences are immediate and restrictive. An Administrator that does not reach this equity level may not distribute profits, reduce its capital, return contributions, or carry out any transaction that decreases its regulatory equity; meaning that operational growth is suspended until it regularizes its position.

Supervision. –

The SCVS plays a central role in implementation. The Resolution orders that the content of the rule be communicated to all regulated entities within ten days of its publication; that is, by August 30. In addition, it must implement, within one year, the technological tools and administrative structure needed to continuously monitor compliance with these limits. This suggests that equity reports will need to be integrated into a more sophisticated monitoring system than the current one.

Deadlines. –

The Resolution recognizes that not all Administrators must comply immediately with these new requirements, and therefore grants a period of up to two years, counted from the effective date of the Resolution, to come into compliance; that is, until August 20, 2028.

Administrators that, as of the effective date, do not have the required regulatory equity have one month to submit to the SCVS a regularization plan setting out the specific measures they will implement. This plan must be approved by the SCVS before it is carried out. The rule instructs the SCVS to establish, by means of a general regulation, the procedure for submitting, evaluating, and approving these plans, as well as for monitoring compliance with them.

Practical Implications. –

For mid-sized Administrators, the Resolution may call for a review of their capital structures. Some may need additional shareholder contributions, while others will seek mergers or strategic alliances to reach operating scales that make the equity coefficients more efficient. For large Administrators, the impact should be smaller, since their required coefficients are lower.

For the clients of these Administrators — institutional investors and individuals who rely on them — the Resolution represents greater soundness. The equity requirements are, in essence, a stronger protection mechanism. They ensure that, if something goes operationally wrong, the Administrator would have its own resources to respond before the assets of the funds under its management are compromised.

Ultimately, this Resolution reflects the maturity of Ecuadorian financial regulation. It is not a merely punitive measure; it is a prudential one. It recognizes that the growth of the securities market must be accompanied by increasingly clear and quantifiable equity requirements. Those of us who operate in this space have a responsibility to understand these rules in depth and to advise our clients on how to navigate them. The stability of the national financial system depends on every actor complying rigorously. Through this Resolution, the Board has made clear that there is no room for lax interpretations.

Observations on the Resolution