APC Mandatory - Ethics Flashcards
Ethics
Why do you want to become a member of RICS?
I want to become a member of RCS because I want to have industry recognition, provide a gold standard of excellence and develop my career.
What is the role of RICS?
- To maintain the highest standards of education and training. 2. To protect consumers through strict regulation of professional. 3. To be the leading source of information and independent advice on land, property, construction
What are the key functions of RICS?
ToÊpromotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure
What is a Royal Charter?
The Royal Charter allows the RICS to be self-governed. It maintains and promotes the usefulness of the profession for public advantage.
Who is the current RICS president?
Clement Lau
What do you understand by the term self-regulation?
RICS self-regulates, meaning that itÊoperates within it’s own published regulatory framework, rather than being legislated by Government. RICS regulation is led by an independently-chaired Regulatory Board and regional sub-boards.
Can you tell me what you understand by the principles of better regulation?
PACTT. 1. Proportionality - make the penalty proportional to the breach. 2. Accountability - Regulators must be able to explain their actions under public scrutiny. Promote complete fairness. 3. Consistency - treat everyone equally. 4. Targeting - focusing on serious breaches.
5. Transparency - Regulations are simple, clear and effectively communicated to all members, clients and public.
What is a Bye-Law?
Enabling Principle ratified by the Privy Council
Give an example of one of the RICS Bye-Laws.
There are 10 e.g. Conduct - complying with regulation and rules.
Explain to me the new RICS Rules of Conduct - what do they replace?
The new Rules of Conduct is a single document which replaces the old Rules of Conduct for members, Rules of Conduct for firms and global ethical principles
RICS Rules of Conduct: When do they take effect?
2 Febuary 2022
RICS Rules of Conduct: Who do they relate to?
Members and firms.
What are the 5 Rules?
1.Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
2.Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3.Members and firms must provide good-quality and diligent service.
4.Members and firms must treat others with respect and encourage diversity and inclusion.
5.Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
RICS Rules of Conduct: Give an example behaviour for each.
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS (Members and firms do not mislead others by their actions or omissions, or by being complicit in the actions or omissions of others.)
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise. (: Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.)
- Members and firms must provide good-quality and diligent service. (Members and firms understand clientsÕ needs and objectives before accepting any professional work.)
- Members and firms must treat others with respect and encourage diversity and inclusion. (Members and firms respect the rights of others and treat others with courtesy.)
- Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession (: Members and firms respond to complaints made against them promptly, openly and professionally.)
What are the core professional obligations of firms and members to RICS?
Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
What disciplinary procedures can the RICS impose and what circumstacnce can they be imposed?
- Action by Head of Regulation
- Regulatory Tribunal
- Appeal Panel
When did RICS last update their disciplinary panel rules?
1st October 2019
What are the different levels of disciplinary action within these procedures?
Investigations, Regulatory Complicane order, Diciplinary panel.
What do you understand by the term professional practice?
Professional practice means to upholding standards set by the profession.
What money laundering regulations or legislation are you aware of?
The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. RICS Professioanl Statement - Countering bribery and
corruption, money laundering
and terrorist financing 2019
What is a red flag of money laundering?
A warning or indicator suggesting a serious problem e.g., criminal activity.
What bribery legislation are you aware of?
Bribery Act 2010
What is a bribe?
A bribe is something given in expectation of a change in behaviour.
What are the penalties for accepting a bribe?
Penalties include fine or prison
What are the penalties for being involved in money laundering?
Penalties include fine or prison
What constitutes an offence under the Bribery Act 2010?
Giving a bribe, taking a bribe, bribing an official, not having systems in place to prevent a bribe.
What constitutes an offence under the current money laundering regulations?
Facilitating money laundering, not having systems in place and not reporting suspicious activity
What is Professional Indemnity Insurance (PII)?
Professional indemnity insurance
Can you tell me about the RICS requirements in relation to PII?
ÔFirms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity cover that meets the standards approved by RICS.Õ - If turnover =< £100k =PII of £250k
- If turnover £100-£200k =PII of £500k
-If turnover >£500k =PII of £1m
What would you do if you received a notice of a PII claim from a client or their solicitor?
Notify insurance
If you were providing services outside of your usual scope to a client, what might you need to do in relation to your PII cover?
Increase PI cover.
What is run off cover?
To ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade.
What RICS requirements are there relating to run off cover?
Run-off cover for 6 years with a minimmum of 1 million.
What changes did RICS recently make to the Minimum Approved PII Wording?
Under the new terms, insurers are not permitted without specific dispensation to exclude fire safety claims on a property four storeys or less and fire safety coverage must be provided as a minimum on an aggregate, defence cost inclusive basis.
Explain PII requirements relating to fire safety cover and cyber cover.
Since 2020, insurers have imposed a blanket fire safety exclusion on PII terms provided due to concern following high profile fire safety failures, meaning chartered surveying firms have increasingly been left uninsured for fire safety exposure on all aspects of their business. There is a new regulatory requirement for insurers to clarify the cyber cover provided in PII policies.
How long can a PII claim arise after the work is undertaken?
15 years
What is the Assigned Risks Pool (ARP)?
The assigned risks pool is for firms that are unable to obtain professional indemnity insurance (PII) in the insurance market
Who might need to access the ARP?
Firms unable to gain insurance.
Explain your understanding of the RICS Guidance Note Risk, Liability and Insurance (1st Edition).
This guidance note is intended to assist both members and their clients in understanding the main risks and liabilities associated with surveying.
Explain when you might agree a liability cap.
Where legally permissible and following the principles of good practice set out in the guidance note, as a way to manage the risk of their professional work, and to ensure that there is a fair allocation of risk and reward between members and their clients.
How would set out third party reliance in Terms of Engagement?
You would clear state it within the Terms of Engagements
What are the three key terms that should be considered from a risk perspective in the context of every instruction you undertake?
The scope of the work
The basis on which the fee will be calculated
The liability cap