3 - Ethics Flashcards
Tell me about RICS PII Requirements
- Rule 9 for Firms
- Must be Each and Every or ITAWRTCR
- Must be as per minimum levels and uninsured excess
- Must be by RICS approved insurer
- Must have run off cover
- Take note of minimum policy wording
What are the different types of RICS Publications?
- Professional Statements
- Guidance Notes
- Data Standards
- International standards
- Assessment standards
Name some Professional Statements
- Client Money Handling
- Conflicts of Interest
- Countering Bribery, money laundering, corruption and terrorist financing
Name some Guidance Notes
- Asbestos
- Surveying Safely
- Lessons Learned
Explain the Principles of Better Regulation
Better Regulation Executive set out 5 principles:
- Proportional
- Accountable
- Consistent
- Targeting
- Transparent
Explain how the RICS abides by the Principles of Better Regulation
- Proportional - Fines fit the punishment
- Accountable - To the members and public
- Consistent - Treats all members/firms equally
- Targeting - Doesn’t have a scattergun approach
- Transparent - Clear, concise and easily followed
Name all the RICS Standards of Conduct
- Countering Bribery, corruption, money laundering and anti-terrorist financing
- Conflicts of Interest
- Ethics
- Rules of Conduct
- Client Money
- Risk, Insurance and Liability
What are the RICS requirements for a CHP?
- Rule7 for Firms
- Must be in at least two stages 1) deal with it internally and 2) refer to independent redress
- Acknowledge within 7 days, respond within 28
- Must be clearly stated as available in the ToE/Service Agreement
- Must be freely provided
- Must have a form of ADR approved by the RICS
- Must keep a Complaints Log
- Must notify insurer if required!
When does the RICS get involved in Complaints?
Usually only if the Firm has not responded to the complaint or has prevented the complainant accessing the independent redress mechanism in some way
What are the Ethical Standards? Name them.
The standards set by the RICS that all members should uphold in the course of their work.
- Act with integrity
- Act in a way that promotes trust in the profession
- Always provide a high standard of service
- Treat other with respect
- Take responsbility
When was RICS formed? What is the structure?
- Formed in 1868
- Awarded Royal Charter in 1881
- Privvy Council - Awards RC and ratifies changes
- Governing Council - Sets strategic direction
- Management Board - Day to day management
- Standards and Regulation Board - Sets S&Rs
- Audit Committee - Internal audit across entire organisation
- Regulatory Tribunal - Independent body that acts as the disciplinary panel
What do you need to do when setting up a Firm?
- Register with Companies House
- Register with RICS - at least 25% of directors needs to be MRICS
- Appoint a contract officer/principal representative
- Comply with the Rules for Firms
- Submit an Annual Return to RICS
- Abide by Companies Act 2006
- Submit annual accounts
What do you need to do when closing down a Firm?
- Inform RICS
- Hand over Clients to others
- Return Client Money
- Keep files for 15 years (recommended)
- Obtain run-off cover
Can you tell me what is in the Countering Bribery Professional Statement?
Split in to 3 parts:
1 - Effectively sets out what firms must and must not do, such as:
- have procedures in place to prevent such as doing identify/credit checks
- report suspicious activity
- retain records
- conduct reviews and risk assessments of activity
2- Sets out Guidance and Good Practice such as:
- Having a record of all hospitality
3- Offers further Guidance and a Glossary of terms
- Examples of suspicious purchases, e.g. an unknown young person buying a flat for millions in cash
Tell me about the Proceeds of Crime Act 2002
- Allows Government to recover proceeds of crime
Also established the following crimes:
- Using criminal property
- Knowingly entering in to an agreement where criminal property/proceeds are involved
Tell me about the Money Laundering and Terrorist Financing Regulations 2019
- Duty for companies to undertake risk assessment
- Perform DD on Clients
- Be aware of PEPs or PSC
- 10K Euro limit on Cash transactions
- Keep records and data for 5 years
- Be aware of the RICS Red Flag Indicators
- 14 years in Prison / Unlimited Fine
- 5 years in Prison / Unlimited Fine for Tipping Off
What is T&T’s CHP process?
- Complain received and logged
- Raise to Director and Client Lead
- CAR (Corrective Action Record) created to record actions needed to be taken. Agreed by the parties.
- Review the CAR at later date to see if resolved.
- If not, chain of escalation.
- Ultimately, use form of ADR in appointment. If none stated, use RICS DRS for Business claims
- Insurer Notified
How do you act with Integrity? Give an example for your Case Study
- Be honest and trustworthy in all that I do; never accept a bribe.
- I was honest about my concerns over the programme benefit offered in Option 2.
How do you treat others with respect? Give an example for your Case Study
- Practice Active Listening
- Respected the Developer by ensuring they were aware of the offer from Contractor and could go back to back
How do you act in a way that promotes trust in the profession? Give an example for your Case Study
- I conduct myself professionally in both my work and personal life, particularly with regards to social media.
- Short timescales for the production of Options Appraisal - promised the Client I would have it done in time and I did.
How do you provide a high standard of service? Give an example for your Case Study
- Have reports, some forms of communication and complex emails peer reviewed and checked by colleagues.
- I went above and beyond for the Sustainability team to help them understand more about the conventions of construction and relevant project processes,
How do you take responsibility? Give an example from your Case Study
- On behalf of the team I own any mistakes made by the project team and manage them fully to resolution, including keeping the Client informed of progress.
- Consulted extensively with Planning Consultant to show the impact to the master schedule.
What is a Bribe? Tell me about the Bribery Act.
- A payment in money or in kind as an inducement for a party to act unethically, illegally or a breach of trust.
- Bribery Act 2010 - Sets out 4 main crimes:
1) To bribe
2) To be bribed
3) To bribe a foreign official
4) Corporate offence of failing to prevent Bribery
- 6 Principles of prevention that companies must engage with:
1) Top level commitment
2) Due Diligence
3) Communication
4) Risk Assessment
5) Proportionality
6) Monitoring and Review
- Outlaws Facilitation Payments - be aware!
10 year sentence/unlimited fine for individuals
Unlimited fine for companies
What should be in a Service Agreement or Terms of Engagement with a Client?
- Scope
- Basis on which fee is calculated
- Liability Cap (specific attention drawn)
- Advise over CHP
What actions must you take before undertaking work for a Client?
- Check whether any conflicts of interest
- Risk assessment over DD if applicable
- Have a contract/agreement in place
What questions does the RICS Ethical Decision Tree post?
- How does your action fit with the ethical standards?
- Is what you’re doing legal?
- Ultimate test - Would you be happy to have your actions made public?
What is T&T’s Gifts and Hospitality Policy?
- Fundamentally follow the ABC training and assess your decision in line with the ethical standards and best practice
- No cash or vouchers
- Anything else must be below certain levels and recorded on the hospitality register
- Should not be more than once every 3 months
What are the RICS Disciplinary Proceedures?
- CPD Sanctions and Fines for when members have not completed CPD or provided information when required. Usually a stepped process (i.e. first time is a warning)
- Regulatory Compliance Order - Agreement between Firm and RICS that something needs to be improved. Action plan to address.
- Disciplinary Panel Hearing - For serious cases or continued breaches.
Usually only gets involved when it finds something in audit, information isn’t provided, CPD isn’t done or complain/whistleblowing from another party
What are the most common causes for RICS to conduct disciplinary proceedings?
- Not completing required CPD
- Mishandling Client Money
- Not acting in a professional manner
Tell me about the Modern Slavery Act 2015
Sets out the varying types of modern slavery including:
- Debt bonded labour
- Arranged/Child Marriage
- Human Trafficking
Require companies to:
- Produce S.54 statement stating what they have done in the past year to combat MS.
- Perform Due Diligence checks on Clients/Supply Chain as required.
- Report anything suspicious to the Home Office
What did RICS do as a result of the Merrett vs. Babb Case?
- Set up the Member Support Service
- Set recommended liability wording
- Mandated run off cover
What are the 3 Key Sectors in the RICS?
- Land
- Property
- Construction
Name 6 Professional Groups
- Project Management
- Facilities Management
- Minerals and Waste
- Arts and Antiquities
- Quantity Surveying and Construction
- Dispute Resolution
What is the purpose of the Professional Groups?
- Steer and set the entry and assessment requirements to that pathway
- Contribute to development of RICS standards, strategy and direction
- Act as a network for knowledge sharing and support
- CPD support
What is the Levitt Review?
- Review in to dismissal of directors who raised concerns about alleged mismanagement of funds
- Report has been issued
- Many recommendations
- Exec team stepped down
- Further review being undertaken by Lord Bichard
What did RICS do in response to Grenfell?
- Lobbied and provided advice to government
- Provided guidance to landlords and residents
- Set up dedicated Fire Safety Hub online
- Produced documentation on the External Fire Wall review process (EWS) and the EWS1 Form
- Worked with insurers to remove blanket exclusion on fire safety in terms of PII
What are the 4 main roles of the RICS and the purpose under the Royal Charter?
- Regulate and promote the profession
- Maintain the highest professional and educational standards
- Protect Clients and Consumers via a strict code of ethics
- Provide impartial advice and guidance
“Promote the usefulness of the profession for the public advantage in the UK and in other parts of the world”
What are the RICS Standards of Conduct?
- Ethics
- Rules of Conduct for Members and Firms
- Client Money
- Conflict of Interest
- Bribery, Corruption, Money Laundering and Terrorist Financing
- Risk, Liability and Insurance
Can you tell me about Client Money Handling?
CMH Professional Statement sets out what firms must do when managing client money. 3 key reasons:
1) Keep Client money safe
2) Ensure that robust processes are in place for managing money
3) Client Money accounts are used for appropriate purposes only
Key requirements:
- Must never go overdrawn
- Must have full audit trail and ledger
- Must have the word ‘Client’ and the full name in the account title
- Must be fully accessible and visible to the Client at all times
What is the Client Money Protection Scheme?
- Provides protection, as a last resort, in instances where an RICS Regulated firm is unable to repay a client’s money, up to the limits and exceptions set out in the scheme rules.
What is the Royal Charter?
- Establishes separate legal entity of the body itself rather than just the individuals
- Allows members to use ‘Chartered’ in their title
- Requires RICS to promote usefulness of profession
- Secure advancement of knowledge
- Sets out rights such as to self regulate, and obligations such as to appoint a governing council
What is the RICS Vision?
“To be recognised in key international markets as the leading body that develops and enforces professional standards, and offers access to the most sought-after professional status”
What is the purpose of the RICS?
- Regulate and promote the profession
- Maintain the highest professional and ethical standards
- Protect Clients and Consumers via a strict code of ethics
- Provide impartial advice and guidance
What the 4 key elements of the new business plan? What is the mnemonic?
TIPS!
- Trusted by our stakeholders and society
- Influential thought leader
- Professional qualifications remain in demand
- Sustainable 21st Century professional body
What are the 6 key principles of the Bribery Act? What is the mnemonic?
DTM and CPR!
- Due Diligence
- Top Level Commitment
- Monitoring and Review
- Communication
- Proportionality
- Risk Assessment
What are the 9 Rules for Members? What is the mnemonic?
ICE - CSCS - IC
- Interpretation
- Communication
- Ethical behaviour
- CPD
- Service
- Competence
- Solvency
- Information to RICS
- Cooperation
What are the 15 Rule for Firms?
- Interpretation
- Communication
- Professional Behaviour
- Training and CPD
- Competence
- Service
- Advertising
- Solvency
- Use of Designations
- Cover Arrangements
- Client Money
- Complaints Handling
- PII
- Information to the RICS
- Cooperation
Can you tell me about the current senior staff at the RICS?
President - Clement Lau Interim CEO - Richard Collins President Elect - Ann Gray Senior VP - Tina Paillet Chair of GC - Nicholas Maclean
Can you talk about any articles you have seen in Modus?
- IPCC report on climate change
Construction responsible for 39% of emissions
What is the RICS HQ Address?
12 Great George St. Parliament Square
Why do you want to join the RICS?
- Validate my competency in the most prestigious way
- Access to network of professionals
- Great base for further development via professional groups and forums
What should you check before starting work for a client?
- Terms of Engagement/Service are clear and agreed
- No conflicts of interest
- Competent to undertake the work
- Basis of Fee
- Scope agreed
- Statement of liability etc.
Can you name me two pieces of legislation that are related to ethics?
- Bribery Act 2010
- Money Laundering and Terrorist Financing Regulations 2019
What are the RICS Bye-Laws? Can you give some examples?
Set out the specific internal RICS rules that it must abide by itself. Examples:
- Setting the value of membership fees
- Specifies what designations can be used by who
- Members to notify if they may be receiving a custodial sentence
What does the RICS stand for?
Promotion and enforcement of the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure.
What are the three professional statements related to Ethics?
- Conflict of Interest
- Client Money
- Countering Bribery, Corruption, Money Laundering, and Terrorist Financing
What two tools did the RICS produce to assist with CPD?
- CPD Tree
- CPD Checklist
What changes were there to the PII requirements this year?
- Greater fire safety cover
- Assigned risks pool increased
- Increased number of insurers
What is the Client Money Protection Scheme? What are the limits?
- Last resort to protect Client money in the event RICS firm can’t pay it back.
- £50k limit per claim
- Absolute maximum £20.3m aggregate.
What are some of the Client Money rules?
- Must have the name and the word ‘Client’ on the account name
- Ledger must be kept
- Full access at all times
- Cannot go overdrawn
- Full records
What is a regulatory compliance order?
Agreement between RICS and a member or firm that accepts liability for a wrongdoing and:
- admits that they have fallen short of the standards expected
- agrees to an appropriate sanction
- in some cases, take steps to meet the standards expected and/or to prevent it happening again
What are the 7 cautions/reprimand for regulatory compliance orders?
- Caution
- Reprimand
- Undertakings in the future
- Stop doing something
- Fine (£2000 action)
- Conditions on individual membership
- Conditions on firm regulation in future
What is the Bichard Review?
- Result of the Levitt review and one of the key recommendations.
- Independent review of the RICS based on three key requirements from the Governing Council:
- Clarity on RICS purpose
- To make proposals for how RICS can become a beacon of best practice, transparency and legitimacy to strengthen its reputation.
- Ensure governance structure and culture are fit for today and can be more easily changed in future.
Why is the 15 year limitation limit the absolute backstop for contract liability?
Latent Defect Act 1986 provided an additional 3 years on the 1980 Limitation Act 12 year backstop, from the point they know about the issue, to put together a claim. Hence 12 + 3 = 15.
What is the Purpose of the RICS?
- Be leading global body for the profession
- Create standards that are in the publics interest
- Develop members professionally
- Provide opportunities for it members
- Promote usefulness of the profession for the public advantage in the UK and in other parts of the world
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How is the governing council elected?
By members every 3 years
How do you become involved in a professional group?
- Sector forum - after APC
- Leader’s forum - after APC
- Working group - anyone at any time
What is a complaint?
Expression of dissatisfaction
What is meant by Fully Retroactive?
Covers all current and previous work done
What is meant by a Full Civil Liability basis?
- Widest cover available - all aspects included unless it’s specifically not.
- Covers acts of liability that non-negligent.
What are the typical PI premiums? What are they based on?
- 1-5% of turnover
- Based on overall risk profile of your firm
Who makes the RICS disciplinary rules?
- Regulations and byelaws allow Standards and Regulation board to administer the rules
What are the Bye Laws set by the RICS?
1 - Definitions
2 - Membership and Registration
3 - Designations
4 - Contribution to funds
5 - Conduct
6 - Governing Council, Officers and Staff
7 - Subordinate Boards, Committees and Groups
8 - Procedure for General Meetings and Voting
9 - Accounts and Audit
10 - General
