External Financial Institutions (EFI) are entities that perform intermediation transactions solely between supply and demand for securities, cash or precious metals located outside the country (commonly called "off-shore" banking activities).
According to the legal and regulatory framework (Decree 381/89), EFIs can operate exclusively with non-resident customers, with whom they can carry out all financial intermediation activities and related services, including collecting demand and current account deposits in foreign currency and authorize the issuance of checks from those accounts.
These entities require Authorization from the Executive Power to operate for reasons of legality, timeliness and appropriateness, with prior favorable report from the Central Bank of Uruguay. Additionally, they require authorization from the Superintendency of Financial Services to start operating in the financial system. See requirements for approval and permission to operate (Art. 14 et seq of the Central Bank of Uruguay Communications Compilation of Financial System Regulation and Control Rules RNRCSF in Spanish).
In these cases, supervision is primarily aimed at protecting the stability and solvency of the entities, based on the systematic and regular implementation of different supervisory mechanisms, which seek to promote entities to manage their risks in a professional way (such as the risk of being used for money laundering or terrorist financing), to prepare financial reports in a timely and consistent manner, to operate with caution and maintain adequate compliance with regulations (capital and liquidity requirements among other). Through these procedures, it is possible to have early warnings of problems and thus company managers can take appropriate measures to solve them in a timely manner.
The role of protecting financial users is also performed by responding to inquiries and denouncements.
See List of External Financial Institutions authorized to operate in the Uruguayan financial system.