Co-operative Societies (Amendment) Bill

Mr Speaker, Sir, thank you for allowing me to speak on this Bill.

Co-operative societies play a significant role in Singapore's economic landscape. This has been evident in recent years, especially during the pandemic, when the co-operatives did much to help those displaced at the workplace or struggling with reduced take-home pay. Our co-operative societies also help cushion price rises and an increased cost of living caused by the volatile global economic and political environment.

The Co-operative Societies (Amendment) Act 2024 is a significant legislative reform that impacts broader operations and provides flexibility to the co-operative movement. This Act marks a new chapter with enhanced governance for co-operative societies in Singapore by streamlining regulatory processes, reducing bureaucratic hurdles and simplifying compliance. By allowing dividends and honoraria to be paid from reserves with the Registrar's approval, the Act acknowledges our need for greater operational flexibility.

In the current volatile and uncertain economic landscape, it may not be practical for the finances of an organisation to be considered purely on a 12-month block. While this remains the case for corporate entities, there is merit in introducing some form of flexibility, accompanied by the appropriate governance controls for co-operatives, as they play an essential and unique role in strengthening Singapore's ecosystem.

These welcome changes empower leadership and ensure co-operative societies can respond more rapidly to changing member needs and market conditions while maintaining the movement's core democratic principles.

This amendment represents a pragmatic shift towards a more efficient and responsive co-operative governance. The introduction of the new section 72A, specifying the allocation, distribution, and payment of reserves, is particularly noteworthy. This addition allows societies to allocate reserves to various funds, subject to the Registrar's approval, ensuring flexibility in financial management and maintaining adherence to strong regulatory and member interests.

These funds could act as financial buffers, allowing societies to navigate economic uncertainty. Funds for social and environmental efforts can also strengthen the co-operative's reputation and member loyalty. The introduction of section 72A ensures transparency and accountability in financial decisions and can further align the societies' financial practices with their long-term sustainability and members' collective welfare.

I would like to take this opportunity to seek some clarifications on this Bill.

How will obtaining the Registrar's approval for distributing dividends or paying from reserves work in practice? Has the Ministry made an assessment on the impact of these new amendments on members' rights and benefits? Also, what impact if any is expected on member engagement and investment in co-operative societies? Also, with the increased responsibilities and decision-making powers regarding financial distributions from reserves, what additional guidelines or best practices should the Committee of Management or COM follow to ensure transparency and accountability? Lastly, has an assessment been made on how quickly will co-operatives be able to respond to changing economic cycles to help their members under the new approval process?

Mr Speaker, Sir, co-operative societies have historically been bastions of financial stability and community support for their members. By offering a wide range of financial services, including savings and loan options tailored to their members' needs, co-ops play a crucial role in ensuring the financial well-being of individuals within the community.

As we look ahead, we must leverage these legislative changes to foster innovation, enhance member engagement and drive sustainable growth. We must also empower various social institutions, such as co-operatives, to play a greater role in strengthening our social compact in a relevant and meaningful way.

This dual focus on financial and community support is at the heart of the co-operative movement, illustrating the significant role co-ops play in strengthening the social fabric of Singapore. The Bill's focus on transparency, accountability and member-centric governance benefits co-operative societies significantly. Mr Speaker, Sir, notwithstanding my clarifications, I stand in support of this Bill, Sir.

Mr Speaker, Sir, I support the Co-operative Societies (Amendment) Bill. It offers greater operational and corporate flexibility to co-operatives in Singapore. Co-operatives play an important role in promoting mutual assistance and self-help, aligning with principles of economic and social benefit to members.

The first co-operative was set up close to a century ago. Co-operatives are also important institutions for nation-building, such as the FairPrice Group, which seeks to moderate the cost of living for Singaporeans, amongst other objectives. They have become an important institution in Singapore, contributing to nation-building. They also represent an important ethos of mutual help. And for larger co-operatives, such as the FairPrice Group, they serve important national imperatives.

The proposed amendments, allowing co-operatives to pay dividends and honoraria from the reserves with the Registrar's approval, and issue bonds and debentures, will facilitate their growth and enhance benefits for their members. While welcoming these changes, I suggest some measures for further consideration by the Ministry.

First, there is a diverse range of co-operatives with different levels of resources and governance capabilities. We can consider enabling the well-governed and better-performing co-operatives to take slightly more investment risk or distribute more surpluses to members that will level the playing field and enhance their effectiveness. This is compared to the options offered by other corporate governance structures, which might offer more flexibility in investing accumulated resources.

Regarding investment risk, I propose revisiting the default 10% limit on credit co-ops' total assets for investing in restricted investments approved by the Registrar. Increasing this limit, especially for co-ops with robust governance structures, will enable them to hedge against inflation and the higher cost of funds and running businesses more effectively. This is especially needed when there are newer asset classes and instruments that may require more capital outlay.

Second, I hope that the Ministry can explore how co-ops can modernise and access productivity grants available currently to SMEs. Utilising Government's support for capacity building and technical assistance would enhance governance, management and operational efficiency, optimising resources and activities for membership self-help.

Next, on the Central Co-operative Fund or CCF grants. The CCF grants serve as an important tool in promoting the progress of co-ops. For example, the recently unveiled Sustainability Grant provides funding support to enable co-ops to kick-start their sustainability journey in line with Singapore's Green Plan 2030. Can the Ministry share on the uptake of the Sustainability Grant to date?

The Progressive Workplace Grant, which provided a one-off grant for adopting the Tripartite Standards in 2023, has been given out to 25 co-operatives. This translates into 25 more co-operatives with more progressive workplace standards. In considering the changing needs of the workforce, progressive workplace standards must now be the norm, as opposed to the exception. This is especially so whereby co-ops are established for the purpose of doing good for members. Can the Ministry consider extending or enhancing the Progressive Workplace Grant to encourage greater adoption of tripartite standards? Promoting progressive workplace standards aligns with the ethos of co-ops, aiming to benefit their members.

In conclusion, co-ops play a crucial role in promoting the public good and these amendments will empower them to better serve their members and their community and ultimately, Singapore. Mr Speaker, I support the Bill.

Sir, I rise in support of the Bill. Co-operative Societies or co-ops are an interesting commercial vehicle. The principles of co-ops referred to in the Act have been elaborated by the Ministry of Culture, Community and Youth (MCCY) to include, amongst other things, democratic control as well as members' economic participation and compensation. In this regard, co-ops allow a large number of people to participate in commercial activities. Indeed, the widespread involvement in co-ops is indicated by the fact that although there are only 80 co-ops, they have between them, over one million members.

Sir, the proposed amendments will enable co-ops to have more flexibility in the use of their reserves. Importantly, Committee of Management or COM members can now receive honoraria as well as allowances. I think this is fair. While sitting on the COM may be a form of service to members, co-ops are, after all, economic-driven vehicles and COM members should be compensated fairly for the contributions to their co-op.

In order for co-ops to avail of the new provisions under the Act, they must first seek approval from the Registrar and then the AGM of their members. The AGMs and members' involvement and scrutiny therefore becomes more critical. These members will range from those who are more savvy about their rights and some that may not be so. Some of the provisions in the Act can be quite technical. The present amendments also expand the scope of matters that may be brought to the AGM.

In this regard, I would like to ask the Minister what efforts MCCY makes and will be making to educate co-op members of their rights under the Act, what they will be doing to educate COM members on their duties, including efforts taken in cooperation with the Singapore National Co-operative Federation. Sir, notwithstanding my clarifications, I support the Bill.

Mr Speaker, Sir, I rise in support of the proposed amendments to the Co-operative Societies Act, which aim to enable co-ops to better utilise their reserves, provide legal clarity and make the necessary technical updates.

The proposed amendments seek to address several key areas, including the broadening of the use of reserves by co-ops. Currently, co-ops face limitations in declaring dividends solely from the preceding year's surplus, which may not always align with their members' needs, especially in volatile environments. I have no objections to the amendments which would permit co-ops to use their reserves to distribute dividends to members or pay honoraria to members of the COM, subject to the approval of the Registrar of Co-operative Societies.

While these amendments represent progress towards enhancing the regulatory framework for co-ops, there are certain aspects that warrant further scrutiny and deliberation. As we navigate through the clauses of the Bill, I would like to pose the following questions for consideration.

Clause 2 defines the term "reserves" and makes consequential amendments to the definitions of "dividend" and "honorarium". Would the Minister elaborate on the criteria and considerations for the Registrar's approval of the distribution of dividends or payment of honoraria from reserves?

Clause 5 reduces the number of signatories required for the registration of amendments to by-laws from three to one person. What measures will be in place to ensure accountability and transparency in the decision-making process regarding such amendments? Mr Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Clause 8 specifies that any distribution of dividends or payment of honoraria from reserves must be approved by the members of the society in the Annual General Meeting. How will the Registrar ensure that members are adequately informed and empowered to make informed decisions during these meetings?

Clause 11 removes the requirement for the Registrar's approval for the issuance of bonds or debentures by co-ops. What safeguards will be put in place to prevent misuse or mismanagement of funds raised through such instruments?

(In English): Sir, co-ops are different from other business entities in that they are based on members working towards common economic and social objectives. Hence, it is imperative that legislative changes enhance transparency, accountability and good governance. I look forward to the Ministry's response and clarifications on how the amendments will serve the best interests of our co-operative societies and their members.

Mr Speaker, Sir, co-operative societies play an important role in fostering community-driven economic development by empowering individuals to collectively address mutual needs and achieve social progress. Today, there are 79 co-ops in Singapore, comprising consumer and service co-ops that provide goods and services to their members and credit co-ops that provide financial services, such as taking in deposits and granting loans to members.

The current proposed amendment seeks to allow co-ops to use their reserves to pay dividends to members or pay honorarium to the Committee of Management. This is subject to the Registrar's approval as a prudential safeguard, as it means that co-ops may declare dividends even if no surplus is achieved in the preceding year.

This provision appears to deviate from the strict corporate practice of paying out dividends only from retained profits, prompting concern, especially for credit co-ops that are subject to prudential ratios. Currently, credit co-ops that do not meet the minimum Capital Adequacy Ratio, or CAR, of 10% are bound by strict loan limits on unsecured general loans and must seek the Registrar's written approval to distribute dividends from that year's surplus. The intent behind these rules is to ensure that credit co-ops build up sufficient institutional capital that absorb operational losses.

By allowing the use of reserves to pay out dividends may put credit co-ops at risk of reducing institutional capital and potential CAR impairment. Given the increasing volatility of our operational and financial environment, I would like to confirm if there are other advisory and fiduciary safeguards in place, in addition to the Registrar's approval, to help credit co-ops to better assess dividend-related decisions in a prudent and objective manner.

With the broadening of the use of reserves, consistent policies, procedures and processes are even more critical to good governance in co-ops. The Registry of Co-operative Societies (RCS) and Singapore National Co-operative Federation (SNCF) have done a good job in producing various governance guides in internal controls, loan management and investment management and training the co-op sector in the use of these joint reserves.

Looking ahead, I propose two recommendations for the RCS and SNCF. First, to investigate the feasibility of creating a shared secretariat service, modelled after the Singapore Chinese Chamber of Commerce, to assist smaller trade associations (TAs) with limited resources. This would help in administrative and operational tasks, aiding their members more effectively. Second, to develop a shared service offering that could address collective concerns of co-operatives, such as cybersecurity threats and the adoption of new technologies like artificial intelligence, thereby enhancing overall efficiency and growth.

Some of this work can be done through a centralised pool of technology providers or audit firms that can build up their understanding of and customisation of solutions and services for the co-op sector over time. This will enable co-ops to better manage costs to minimise the need for them to dip into their reserves on a sustained basis.

Finally, co-ops are lean outfits that often struggle to attract and retain talent. In addition to ongoing efforts to build capabilities through the sector Competency Framework and youth outreach and engagement, the co-op sector can consider putting in place a formal secondment programme for mutual exposure opportunities between co-ops and public and private sector organisations. For high potential co-op officers, this will enable them with policy and/or commercial exposure and enable them to enhance their skillsets to foster innovation within co-ops.

In conclusion, the proposed amendments to the Co-operative Societies Act are designed to empower co-ops to serve their members' interests more effectively. However, these changes must be implemented alongside robust safeguards to ensure prudent risk management.

It is also imperative that co-ops persist in seeking efficiencies and enhancing their effectiveness to maintain sustainability over the long term. Mr Speaker, Sir, notwithstanding my questions and recommendations presented, I express my support for the Bill.

Mr Speaker, Sir, before I answer Members' questions, I would like to take the opportunity to thank, recognise and also acknowledge the contributions that you, Mr Speaker, Sir, have made to the co-operative sector over many decades, including as Chair of the SNCF. The Members have very robustly and thoughtfully acknowledged the contributions of the co-op sector to Singapore's social development. So, thank you, Mr Speaker, Sir, for your years of developing the co-op sector.

Turning now to the specificities of the Bill, I would also like to thank Members, Mr Mark Lee, Mr Neil Parekh, Mr Don Wee, Mr Yip Hon Weng, Mr Desmond Choo and Mr Raj Joshua Thomas for speaking on the Bill. There are also many other Members who have come up to me and also expressed their views about the Bill, including Mr Liang Eng Hwa for his Parliamentary Question about the role of co-ops in strengthening this social compact that I mentioned earlier on.

First, let me address the need for the safeguards for use of reserves. Mr Mark Lee commented that allowing co-ops to pay dividends from their reserves contrasts with the corporate practice of paying out dividends only from retained profits. He made a comparison. Mr Mark Lee also noted that this may be of concern for credit co-ops particularly given that the drawdown of reserves would reduce their institutional capital and therefore their CAR. Mr Mark Lee also asked about the safeguards to help credit co-ops make prudent decisions as they pay dividends from their reserves.

Currently, a co-op may only pay dividends from the preceding year's surplus. We propose to allow them to tap their reserves to pay dividends and honoraria, subject to the Registrar's approval. This will allow co-ops to tap only on their general, unallocated reserves, such as the "Accumulated Surplus" and reserves allocated specifically to the payment of dividends or honoraria as the case may be. This will be made clear to co-ops through issued guidelines.

I also agree with Mr Mark Lee that credit co-ops must maintain adequate capital buffers and ensure adequate safeguards to protect members' interests. There are two layers of safeguards over using reserves to pay dividends or honoraria.

First, co-ops must seek the Registrar's approval. The Registrar will also consider factors, like reasonableness of proposed rates compared to previous years, past compliance track records of the co-op's, strength of governance and particularly for credit co-ops, if these credit co-ops have met prudential requirements. Credit co-ops must also demonstrate that they can meet the prevailing minimum CAR after their proposed dividend or honoraria payment. Second, of course, co-ops must obtain members' approval.

Moving on to the second category of questions on the process for Registrar's approval, Mr Neil Parekh, Mr Don Wee and Mr Yip Hon Weng asked questions regarding the obtaining of Registrar's approval for payment from reserves and the impact that this approval may have.

The Registrar will issue guidelines to co-ops on the information and documents that co-ops need to submit or provide to the Registrar. These will set clear expectations for co-ops on the pre-requisites for the application and allow the Registry to focus on co-ops which satisfy the pre-requisites.

Upon receiving Registrar’s approval, the co-op must seek members’ approval with a specific resolution at their AGM. This will ensure adequate disclosure on the proposed use of reserves. Members will also be able to refer to the co-op’s audited financial statements, which will also be tabled for members’ approval. This enables members to understand the financial impact of such payments on the reserves, if any, before making an informed decision. Co-ops must hold their AGMs within six months from the financial year-end, so there is enough time for them to obtain Registrar’s approval before conducting their AGM.

Mr Yip Hon Weng also proposed a review and monitoring mechanism to ensure that this and other legislative changes are meeting their intended objectives. We will monitor implementation of the new changes and will refine the administrative processes over time, if and where necessary, and this is to facilitate co-ops' operations and to ensure that there are adequate safeguards in place.

The third category refers to Members' questions on the review of the dividend cap. Under the current legislative framework, a co-op must not pay a dividend on paid-up share capital or subscription capital exceeding 10% per annum. Mr Choo asked if MCCY can allow better governed co-ops to distribute more to their members. Mr Yip asked if we can apply a differentiated approach to allow for more flexibility for co-ops with better fiduciary governance.

I thought it was important for me to make two points to these suggestions. First, as Members already know, co-ops are uniquely different from other corporates due to their membership-based structure and social mission. Co-ops’ reserves are built up slowly over years through collective efforts by past and present co-op officers and members. These reserves are therefore very critical for them to meet any losses or operational needs due to unforeseen events. Co-ops must therefore very be prudent when using their reserves.

The current 10% dividend seeks to help co-ops to prioritise their long-term financial health and sustainability, while fulfilling their social mission and objectives, and also their members’ specific needs. While some may compare dividend payments to that of other corporates, the dividend yields for most larger public listed companies typically do not exceed 10%. The dividend cap for co-ops also reflects a balance between providing decent returns to their members and retaining funds for co-ops’ operations and growth. As such, the current cap would generally be adequate for co-ops.

Second, we recognise the broad diversity of our co-op sector. Some are large-scale and professionally run, while others are smaller and mainly volunteer-run. Naturally, governance capabilities and the size of reserves across this whole spectrum vary. MCCY will study this further to assess how to meet the needs of different types of co-ops across this spectrum, while ensuring adequate safeguards to protect members’ interests as well as co-ops’ long-term financial health and sustainability.

The fourth category of questions relate to amendments to facilitate co-ops’ operations. I will now address queries on the safeguards for two amendments aimed at facilitating co-ops’ operations. Mr Don Wee and Mr Yip Hon Weng asked how the proposed reduction of signatories required for an application to register by-law amendments would impact accountability and also to prevent abuse.

Sir, the legislation will continue to require amendments to by-laws to first be approved by members at a general meeting or a referendum. In the case of a general meeting, the resolution to make amendments must be passed by at least three-quarters of the members present and voting. The co-op must thereafter submit an extract of the resolution of the general meeting to the Registrar together with the application form. This will help ensure that the co-op had followed due process in calling for the general meeting and that members have duly approved the amendments. Most co-ops would also have sought Registry’s comments on the proposed by-law amendments prior to tabling them at the general meeting. We will continue with this general practice.

Mr Don Wee also touched on removing the requirement for Registrar’s approval for the issuance of bonds and debentures by co-ops. He asked what safeguards will be in place to prevent misuse or mismanagement of funds raised through such instruments.

Sir, I would like to assure Mr Don Wee that MCCY is mindful that co-ops need more flexibility in their operations. Since co-ops are already subjected to relevant laws on issuance of bonds and debentures, there is no need for an additional layer of Registrar’s approval. When making such issuances, the co-op’s management must explain to potential investors the structure of the bonds and debentures, and how these proceeds will be used. As a membership-based organisation, the co-op’s COM is ultimately accountable to its members for the management of the co-op’s funds. Should any co-op be found to have mismanaged its funds, the Registrar will take action under the Act.

Fifth, Members asked questions about support for and development of the sector. To this end, I thank Members for recognising the important role that co-ops play in our society as well as the support that both MCCY and SNCF provides in the development of our co-op sector.

Mr Desmond Choo suggested studying how to help co-ops modernise and use productivity grants that are available for small and medium enterprises (SMEs). As I mentioned, co-ops can access grants from the CCF. MCCY also works closely with SNCF to ensure the grants remain relevant. Over the last five years, CCF disbursed about $2.7 million in grants to co-ops. In addition to grants to assist eligible new co-ops with start-up costs, co-ops can also apply for development grants, training grants, basic support grants and special grants, that address emerging risks and needs.

MCCY has also supported conferences and events organised by SNCF to raise awareness of topics such as data protection, sustainability and cybersecurity.

Mr Mark Lee suggested exploring the feasibility of a shared secretariat service to assist co-ops with limited resources. He also suggested a shared service that could address concerns such as cybersecurity threats and the adoption of new technologies. Mr Yip Hong Weng also asked if Government could help smaller co-ops digitalise.

Members will know that it is challenging to standardise the scope of works for shared services given the diverse needs of co-ops across the co-op sector and spectrum. Our general approach is to provide the CCF Development Grant, which gives co-ops flexibility to engage suitable service providers to meet their own unique operational needs and to tailor these programmes to their specific requirements. Nevertheless, I think it is a very good suggestion and so, we are open to exploring with SNCF and the sector on centralised services where it is appropriate and where co-ops find it useful.

We also work with SNCF to raise awareness of emerging issues such as cybersecurity, as well as offer a CCF Cybersecurity Grant which co-funds a recommended subscription-based solution to manage cybersecurity risks that Mr Lee and Mr Yip mentioned earlier.

Mr Lee and Mr Yip highlighted co-ops’ struggle to attract and retain talent. Mr Yip asked how Government could help in this area and Mr Lee suggested a secondment programme between co-ops and public and private sector organisations. We will explore Mr Lee’s idea further with SNCF and the co-ops.

Mr Lee also mentioned ongoing initiatives to build the capabilities of co-ops’ COM and staff. These include customised courses unique for the sector. MCCY for example is working with SNCF to introduce a new customised Audit Committee course for credit co-ops in May 2024. This course aims to enhance Audit Committee members’ understanding of their roles and responsibilities, and to sharpen their knowledge of relevant topics like risk management, internal controls, audit and financial reporting.

SNCF has also established the Emerging Leaders Programme in 2022, which aims to groom 100 leaders in five years. SNCF also organises conferences, networking events and sharing sessions to expose co-op officers to best practices and practical solutions adopted by their peers.

On members' rights, which Mr Raj Joshua Thomas raised relating to efforts to educate co-op members on their rights under the Act, I would like to respond that as member-owned organisations, co-ops are governed by their own by-laws as well as requirements under the Act. But we aim to foster an environment of both accountability and transparency, by ensuring co-ops make sufficient disclosures to members.

One of our proposed amendments is a case in point. While co-ops must already obtain members’ approval for payment of allowance, honoraria and other benefits to the COM, we proposed amending the Act to make this an explicit function of the AGM. This will help ensure that members’ approval is obtained for such benefits. In 2019, the Registrar also notified co-ops about the minimum information they need to disclose in an annual report to inform members about activities of the co-op and make informed decisions. These include, for example, adequate disclosure of its activities and financial performance. Co-ops are also encouraged to disclose more information as they deem fit.

Mr Desmond Choo also asked about the sustainability grant. I seek his indulgence because we just set up the grant on 1 January 2024. We will provide more statistics as the take-up rate becomes steady.

Next, I will move on to Mr Yip's questions about whether the Government would allow credit co-ops to advertise their loans to create greater awareness of their services. Credit co-ops are generally set up to serve their members who share a pre-existing common bond, such as the same industry, organisation or the same community. Credit risks are mitigated as many credit co-ops have arrangements with their members’ employers for salary deductions for loan repayments to co-ops. As a membership-based organisation, credit co-ops are not regulated to the same degree as other financial institutions. Hence, they are not open to the general public and should not advertise in mass media.

Nonetheless, credit co-ops are not precluded from advertising directly to their members. In the course of the Registry’s engagement with the co-ops and public consultation for the current Bill, we received feedback to review the advertising restriction for credit co-ops. So, we are studying this matter further.

Mr Speaker, Sir, I would like to conclude by addressing Mr Liang’s related Parliamentary Question on co-ops. Mr Liang asked if Singapore needs new co-ops to meet the evolving socio-economic landscape and if the roles and social missions of co-ops can be strengthened under Forward Singapore.

In view of our refreshed social compact and renewed sense of social solidarity, co-ops indeed offer an additional platform for Singaporeans to come together and address societal evolving needs. To remain relevant and increase co-ops’ impact, they must continue to build their capabilities and competencies – the point that Members have been raising in this debate. This would strengthen confidence in and enhance recruitment into the sector. Co-op leaders themselves should also ensure they can lead their co-ops in a rapidly evolving environment. They should adopt a growth mindset, participate in professional development and continuous learning courses, and put in place succession planning to ensure their co-ops’ longevity and continued relevance. MCCY will continue to work with our partners, the CCF Committee and SNCF, to support co-ops and co-operators along their journey. Mr Speaker, Sir, I beg to move.

Thank you, Mr Speaker. I have a clarification for the Minister of State. According to the 2023 annual report published by the Registry of Co-operative Societies, co-ops in Singapore currently hold a staggering $19.4 billion worth of total assets. However, as we all know, the co-ops vary in sizes and correspondingly, also vary in standards of governance.

In 2018, I had proposed to the Ministry to consider implementing an annual ranking or annual grading system for credit co-ops. Such a system would promote better governance and better accountability. With the proposed changes in this Bill, I would like to ask if the Ministry would implement an annual ranking or grading system to be applied to all co-ops?

Through such a system, we can recognise co-ops that are better governed while maintaining the necessary checks on co-ops with weaker financial positions.

Sir, I thank Mr Melvin Yong for his supplementary question and also his contributions to the co-op sector. I have addressed Mr Yong's first query regarding the Rule 13, which is the review of the 10% cap, just earlier on. Just to reiterate – we think the 10% cap is generally sufficient for co-ops as it reflects the balance in providing decent returns to members and also safeguarding reserves for co-ops operations and growth.

On Mr Yong's suggestion for an annual ranking to identify co-ops that are better governed, as well as those that are weaker and which require more checks, earlier I mentioned that there is a spectrum of different strengths, sizes and capabilities and governance for co-ops. There is currently no public ranking of co-ops, given that co-ops are membership-based organisations and these members are also privy to the co-op's financial positions and other matters which are surfaced in the audited financial statements, which I mentioned earlier on.

They are also surfaced in annual reports as well as their general meetings. But when in doubt, members can and should also reach out to the co-ops' COM to seek clarification. The RCS does, in fact, have monitoring mechanisms in place to monitor co-ops and adopts a differentiated regulatory approach for co-ops. To give you an example, the Registry conducts periodic special audits on credit co-ops and reviews the co-op's financial statements and annual reports to assess their financial health and their governance.

For those, if RCS identifies weaker co-ops, for example, the Registry will engage these co-ops to provide assistance to improve their financial health and governance. I mentioned earlier on, yesterday and today as well, that governance as well as improving the ability of the co-ops to manage these are critically important. So, I would like to assure Mr Melvin Yong that the Registry, SNCF and others, and MCCY will continue to raise governance standards of co-ops.

Thank you, Speaker. I would like to thank Minister of State Tan and express that I am especially encouraged by the Emerging Leaders Programme that is jointly organised by SNCF.

I would like to ask, given that the co-op community holds so much assets and that it can play a pretty transformative role in terms of helping Singapore to cater to some of the more complex social needs: does MCCY have any plans to provide opportunities, for example, under the Emerging Leaders Programme for youths and young people interested in the social enterprise and co-op operations, to gain experience and learning from other regional economies – who may have a more matured development or who are at a more advanced stage of their development in their social economy – including co-operatives and the way that they have advanced and developed in their own countries?

Sir, I thank Ms Carrie Tan for her supplementary question. The short answer is yes.

In addition to the Emerging Leaders Programme, there are many young youths who are involved with our co-operative sector. I have met many of co-op through my interactions with SNCF and through the many co-operatives get-together. In addition to the Emerging Leaders Programme, there are many other programmes that co-ops can use through the grants that are provided to them, to increase leadership; to increase governance standards; to increase capabilities about things like audit, finance; and also to help look at emerging areas, such as cybersecurity, sustainability and the likes.

In fact, when I speak to youths in the co-operative sector, one of the main attractiveness of the co-operative sector is to allow them to explore some of these emerging issues as well as emerging opportunities. So, the short answer is yes, there is interaction between the youths within this co-operative sector in Singapore and then also, if we do not already have, to explore learning from others outside of Singapore as well.