Fintech Regulation Guide

Ecuador

Does your jurisdiction regulate Fintech services under the traditional Financial Services laws or does it have any ad hoc regulatory frameworks for fintech services? (Financial Services Laws/Ad Hoc Framework/Hybrid)

Fintech services are regulated under the “Organic Law for the Development, Regulation and Control of Technological Financial Services (Fintech Law)” which entered into force on 12-22-22 through its publication in R.O.Second Supplement No. 215.  However, while the Regulations to the Law and other secondary regulations are issued, Fintechs have operated as auxiliary companies of the financial system.

Make a list of fintech services that may obtain a licence in your jurisdiction? 

a) Technological infrastructures for channeling means of payment; 

b) Technological financial services; 

  • Digital credit granting
  • Neobanks
  • Personal finance and financial advisory services

c) Specialized electronic deposit and payment companies; 

d) Technological services for the securities market; 

  • Transaction systems
  • Securities market infrastructure
  • Crowdfunding and digital crowdfunding
  • Blockchain

e) Insurance technology services. 

  • Alternative transaction systems

What is(are) the name(s) of the regulatory authority(ies) responsible to grant licences and regulate fintech service providers? If there is more than one, please list which fintech services are regulated by which authority.

Fintech services by the Monetary Policy and Regulation Board with respect to payment systems; and by the Financial Policy and Regulation Board, with respect to financial activities that represent financial risk. Technological financial services by the Central Bank of Ecuador, the Superintendency of Banks and the Superintendency of Popular and Solidarity Economy, as appropriate. The technological services of the securities and insurance markets by Superintendence of Securities.

Are there any specific restrictions on the types of fintech services that can be offered in and/or from your jurisdiction?

The Fintech Law establishes the permitted financial services.  However, the Regulations and other secondary regulations to the Law will define the scope of the services to be provided, as well as the requirements that must be met, and therefore could contemplate restrictions for such services.

Is reverse solicitation allowed in your jurisdiction, for fintech firms licensed in other reputable jurisidictions? (Meaning that a third-country fintech firm can offer services to clients in your jurisdiction providing its at the exclusive initiative of the client).

Any Fintech company that wants to provide Fintech services in Ecuador must comply with the requirements and operating permits established in the Ecuadorian regulations and in the complementary regulation issued for its operation.

The Law does not speak about Fintech companies accredited in other jurisdictions, but it is possible that the regulation to the law and other complementary regulations will pronounce on the matter.

Are there any specific requirements for companies providing fintech services in your jurisdiction?

Yes, companies wishing to provide Fintech services must be incorporated as national companies or be authorized as branches of foreign companies in Ecuador. Additionally, they must obtain operating authorization from the aforementioned control bodies as appropriate, in accordance with the complementary regulations to be issued.  Finally, the corporate purpose of the companies must be exclusively for the performance of Fintech activities. Financial System Institutions may not be shareholders.

Are there any specific consumer protection measures that apply to fintech services in your jurisdiction?

Now, there are no specific measures to protect Fintech consumers. However, the Regulations and other complementary regulations to the Fintech Law are being drafted, which may contain Fintech consumer rights. 

However, in Ecuador there is the Consumer Defense Law and the Financial System User’s Rights Code, both of which protect consumers in relation to the financial services they receive.

Are there any other legal issues that companies should be aware of when providing fintech services in your jurisdiction?

At the moment, the only regulation governing Fintechs is the Fintech Law. Complementary regulations are currently being drafted.   Until the secondary regulations are issued, Fintechs may participate as Auxiliary companies of the Financial System, complying with the provisions of the current regulations in this regard. It is worth mentioning that the Fintech Law has mentioned the creation of a regulatory Sandbox, however, this tool has not been put into practice.

Are virtual assets (such as cryptocurrencies and) permitted in your jurisdiction? (Yes/No)

No

If the answer is Yes, is there any licensing /authorisation/notification process that needs to be followed for a person to issue a new virtual asset? (Yes/No)

No

If the answer is Yes, please provide a summary of the process that needs to be followed by a person to issue a new virtual asset).

N/A

Are Virtual Asset service providers regulated in your jurisdiction? (Yes/No)

No

If the answer to your previous question is Yes, please provide a summary of the framework that regulates such service providers explaining which licence(s) need to be obtained from which authority(ies).

N/A

Are you as a firm providing services and advice relating to Virtual Assets? (Yes/No)

No

Please feel free to add any pertinent comments in addition to your answers.

The firm has supported some technology services companies that have grown in the market, and has been involved in the creation of regulations for the generation of this kind of services.

The firm’s experience in technological services and in the financial field makes it an important player in the market.

Avenida 12 de Octubre No 26-48 y Lincoln, edificio Mirage, Piso 16.
Tel: +(593 2) 381 0950

Avenida 9 de Octubre 100 y Malecón Simón Bolívar, edificio La Previsora, piso 27, oficina 2703.
Tel: +(593 4) 381 0950

C.M2 entre Avenida 24 y C.23, edificio Manta Business Center, oficina 1204,Torre B.
Tel: +(593 5 ) 500 2810

Av. 25 de Junio y avenida del Sol, edificio Professional Center, Piso 3 – Oficina # 313
Tel: +(593 7 ) 2593080