Ecuador mandates new capital requirements for investment funds

Ecuador has implemented new capital requirements for investment fund and trust administrators. Approved by the Junta de Política y Regulación Financiera y Monetaria on August 20, the rule affects 119 entities, including 85 active investment funds and 34 administrators.

The regulation mandates that administrators maintain a minimum capital consisting of a fixed US$400,000 component plus a variable component based on assets under management. The variable portion is calculated using a progressive scale: 1.81% for the first US$50 million managed, decreasing to 0.88% for amounts exceeding US$700 million.

Firms have two years to comply with the new standards, though they must submit a regularization plan within the first month. While the capital is intended to protect the administrator’s operations rather than the investors' assets directly, non-compliant firms will be prohibited from distributing profits, reducing capital, or returning contributions until they meet the requirements set by the Superintendencia de Compañías, Valores y Seguros.