Amended Co-operative Societies Act aims to strengthen co-op movement and better protect members' interests

1. The Co-operative Societies (Amendment) Bill was passed in the Parliament today. Most amendments will take effect within the first half of 2018¹.

2. Co-operative societies (“co-ops”) have played an important role in the development of Singapore’s social fabric by meeting different social and economic needs. There are currently 85 registered co-ops in Singapore.

3. The Registry of Co-operative Societies seeks to protect members’ interests, for example, by managing risks and protecting deposits of credit co-ops. It also ensures that the relevant legislation continues to support the operation and development of co-ops. The Bill is the result of regular policy reviews, as well as consultations with the co-op sector. Public feedback on the proposed amendments was also sought before the Bill was introduced.

4. The key amendments to the Co-operative Societies Act include:
   

   1. Strengthen the competency and governance standards of the individuals overseeing and/or managing co-ops

      • To ensure that competent individuals oversee and/or manage co-ops, the Minister can make Rules to prescribe qualification, experience and training requirements for the Committee of Management (“COM”) and key employees. At this juncture, the Registrar’s primary focus is on credit co-ops, given that they receive members’ deposits and disburse loans.

      • Except with the Registrar’s approval, an individual who fails to complete the required training is not eligible to be re-elected or co-opted into the COM.

      • To strengthen the COM, a co-op² or the Registrar may appoint up to two individuals (who need not be members of the co-op) to the COM even if there is no vacancy, to serve till the next Annual General Meeting.

   2. Enhance regulatory powers to act swiftly in severe situations, so as to better protect co-op members’ interests

      • A credit co-op that fails to meet any prudential requirement is putting members’ deposits at risk, and may be subjected to a cap on dividends it may pay, deposit restrictions or subsequently be deregistered as a credit co-op.

      • Enhance the Registrar’s powers to act swiftly when the COM of a co-op is not performing duties properly, if there has been misconduct or mismanagement, or if it is necessary to protect members’ interests.

      • Except with the Registrar’s approval, an individual cannot be a COM member of any co-op or a key employee of a credit co-op if he was previously removed from a COM or suspended by the Registrar.

   3. Facilitate development and operations of co-ops

      • The minimum number of individuals to set up a co-op is reduced from ten to five.

      • Outdated membership prohibitions are removed to ensure a more inclusive co-op movement.

      • The minimum age to qualify as a COM member is reduced from 21 to 18 years of age.

      • Expand sources of capital by introducing a new class of permanent shares which co-ops may issue to institutional members.

5. A copy of the Bill can be accessed here.

Registry of Co-operative Societies
Ministry of Culture, Community and Youth
9 January 2018

¹ All Bills must go through three readings in Parliament and receive the President’s assent to become an Act of Parliament or a law. (https://www.parliament.gov.sg/about-us/parliament-information/functions)

² This is provided the co-op has allowed for such appointment in its by-laws.