Conduct Rules, Ethics and Professional notice Flashcards
what rules set out the standards of professional conduct and practice expected of members and firms registered for regulation by RICS
RICS rules of conduct for members
RICS rules of conduct for firms
what does a firm need to do to confirm with the Money Laundering, Terrorist Financing and Transfer of Funds (Information of the payer) regulations 2017
-Money Laundering and terrorist financing risk assessment
-Implement systems, controls and procedures to address the terrorist financing risk assessment
-Apply the above across firms structure
-Adopt appropriate internal controls
-Provide training for staff
Comply with Customer Due Diligence (CDD) ,Enhanced Due Diligence and Simplified Due Diligence
-Comply with regulations for Politically Exposed Persons (PEP)
Record keeping and data protections and compliant
Who manages complaints at the RICS
Head of regulation
Why would you want to become a member of the RICS
-Part of a large network of 130k other members
-international recognition by clients
-competitive advantage -known mark of quality
consumer protection for clients due to strict rules of conduct &global professional ethical standards
where are hearings posted for claims/cases against surveyors
In the Black o Modus
why should a chartered surveyor remain solvent
- it’s a rule for members and firms (rules of conduct)
- could be vulnerable to bribery
- doesn’t promote trust in the profession
why do firms have to have PI insurances
- to protect the client in the case of poor advice
- it’s a rule for regulated firms (rules of conduct)
why do chartered surveyors have to do CPD
- it’s a rule of conduct
- market, technology, economy, regulations change, need to keep up to date to offer client informed advice
How much PI cover must a regulated firm have
-turnover £100k or less= £250k limit of indemnity
-100,001 to £200k= £500k limit of indemnity
Over 200k=£1m limit of indemnity
where can you find more about PI requirements for RICS firms
RICS regulation- Professional Indemnity Insurance Requirements
(Version 5 with effect from 2 Jul 2019)
where you can find more about PI requirements for RICS firms
-RICS regulation-Professional Indemnity Insurance Requirements
(Version 5 with effect from 2 July 2019)
what are the CPD requirements for a MRICS
20 hours. 10 formal and 10 informal
Definitions of formal /informal online
where must CPD be recorded by
End of December, record on online CPD portal
what are ethics CPD requirements
One CPD on ethics every 3 years at least
what must you do if you were to set up a firm of chartered surveyors
=state if you are to handle clients money. If so, confirm arrangements for handling clients money
- complaints handling procedure
- PII (estimate turnover to calculate)
- 50% must be MRICS (until Feb 2020, reduces to 25%)
- Company name, number
- Register company/ company’s house
- make clear what the professional service you are offering
- have provisions in place for incapacity or death of sole practitioner
- appoint a contact officer
what would handling client money procedures have to state
- bank account must have ‘client’ in the name
- account must be separate
- state arrangement for interest
- transparent with reconciliation
- fast access
what are your company’s complaints handling procedures
AECOM
what is the RICS complaints handling procedure
RICS CHP Help Sheet 2011 states CHP requires two stages:
-consideration of the complaint by a senior member of the firm or the firm’s designated complaints handler
-if the complaint cannot be resolved, referral to an independent third party with the authority to award redress
RICS Complaints Handling 2016 provides furter guidance
what are the RICS global professional and ethical standards
- take the responsibility
- treat other with respect
- act with integrity
- provide a high level of service
- promote trust in the profession
Give an example of a high level of service
- always be available to take a call or reply to an email
- prepare comprehensive handover notes before annual leave
- client commendation
what does promoting trust in the profession mean
- be careful of your actions outside of the workplace, social media, etc
- promote the profession to external acquaintances
what would you do if your colleague was acting outside of the Global Professional and Ethical Standards
- ascertain the facts to ensure they are acting outside of the rules
- use ethical decision tree to confirm
- remind them of the rules
- if no change, report to RICS
what is your company’s gift policy
To be confirm
Examples:
-any gift must be noted in the Register of Interest
-Maximum threshold is £100 for an individual, £250 for a group
a. Approval is required for gifts/entertainment provided to or accepted from clients or other external organisations
as follows:
Region + Sector Gift Value Entertainment Value
United Kingdom - PRIVATE >£30 per person >£120 per person
United Kingdom - PUBLIC Any >£30 per person
Ireland, Western Europe & Russia - PRIVATE >€30 per person (or equivalent local
currency value)
>€120 per person (or equivalent
local currency value)
Ireland, Western Europe & Russia - PUBLIC Any >€30 per person (or equivalent local
currency value)
b. Where giving, value is the value of the gifts/entertainment from AECOM per person, per occasion.
c. Where accepting, value is the estimated value of the gift or entertainment that the AECOM employee personally
receives per occasion.
d. AECOM Legal must always be consulted if there is any risk that the Gift or Entertainment could be seen as
improperly influencing a recipient.
what document does the RICS publish about bribery
RICS have just released:
RICS professional standards and guidance GLOBAL Countering bribery and corruption, money laundering and terrorist Feb 2019
what are examples of information barriers
- clear desk policy
- take calls in private
- password protection on files
what does the RICS publish on the conflict of interest
RICS professional standards and guidance, global
Conflict of interest 1st edition, March 2017
what is informed consent
Informed Consent may be sought only where the RICS member or regulated firm is satisfied that proceeding despite a Conflict of Interest is:
(1) in the interests of all of those who are or may be affected and
(2) is not prohibited by law, and that the conflict will not prevent the member or regulated firm from providing competent and diligent advice to those that may be affected
how would you carry out a money laundering check
- customer due diligence
- simplified due diligence
- enhanced due diligence (done be compliance team for detailed investigation required out of my scope of confidence)
what is tipping off
Alerting the client you suspect them of something/give them an early warning of the investigation
what is maximum amount of cash allowed to be taken
Most firms don’t accept cash, request for it to be paid into an account and transferred across
Maximum allowed is EU10k in cash counted and receipted
what works can you do prior to agreeing your terms of engagement with a client
anything, so long as you do not advise the client
to be confirmed
what constitutes acting with integrity
- being trustworthy in all that you do
- being open and transparent in the way you work
- sharing appropriate and necessary information with your clients and/or others to conduct business and doing so in a way so hey can understand that information
- respecting confidential information of your clients and potential clients
- don’t divulge information to others unless it’s appropriate to do so
- not taking advantage of a client, a colleague, a third party or anyone to whom you owe duty of care
- not allowing bias, conflict of interest or the undue influence of others to override your professional or business judgement and obligations
- making clear to all interested parties where a conflict of interest, or even a potential conflict , arises between you or your employer and your client
what constitutes a high level of services
- be clear what service your client wants and the service you are providing
- act within scope of confidence
- be transparent about fees and other costs/payments
- communicate in a way that allows them to make informed decisions
- if your service require third party involvement pay parties within timescales agreed.
what constitutes promoting trust in the profession
- promoting what you and the profession stand for-the highest standards globally
- understanding that being a professional is more than just about how you behave at work, it is also how your behave in your private life
- understanding how your actions affect others and environment and if appropriate questioning or amending that behaviour
- fulfilling your obligations
- doing what you say you will
- always trying to meet the spirit of your professional standards and not just the letter of standards
what is meant by treating others with respect
- always being courteous, polite and considerate to clients, potential clients and everyone else you come into contact with
- never discriminate against anyone for whatever reason
- always ensure that issues of race, gender, sexual orientation, age, size, religion,country of origin or disability have no place in the way you deal with other people or do business
- as much as you are able, encourage the firm or organization you work for to put the fair and respectful treatment of clients at the center of its business culture
what is meant by taking responsibility
- always act with skill, care and diligence
- if someone makes a complaint about something that you have done then respond in an appropriate and professional manner and aim to resolve the matter to the satisfaction of the complaint as far as you can
- if you think something is not right, being prepared to question it and raise the matter as appropriate with your colleagues within your firm or the organization you work for, with RICS, or with any appropriate body or organization
what would you do if presented with a gift by a contractor or client
- to avoid being compromised perhaps the best solution is to refuse all, but in practice this is difficult without disrespecting the contractor/client
- all gift should be noted in firms gift register
- ensure the gift is proportional in value and not given at a sensitive time, e.g. final account negotiation or tender period.
what is FCPA
The US Foreign Corrupt Practices Act
what does FCPA do
Prohibits corrupt giving, offering or promising of money or anything else of value to government officials in foreign countries to influence them for obtaining or retaining business
what is active/passive bribery
- active=offering or giving
- passive=receiving
what’s the difference between the FCPA and UKBA
- FCPA only relates to public officials and active bribes, and permits facilitation payments for routine government actions
- FCPA requires listed companies in the US and their subsidiaries to keep accurate books and records. UKBA does not-this is covered under other UK legislation
what are the penalties under the FCPA
- up to 5 years imprisonment
- $250k fine per violation for individuals
- $2m fine per violation for companies
who is a public official
- anyone that holds a legislative, administrative or judicial position
- anyone who exercises a public function
- an official agent of a public international organization e.g. UN, World Bank, IMF
what is your company’s policy with regards to accepting gifts?
To be confirmed
what is tax evasion
when people or businesses deliberately failing to declare the taxes that they owe
what is tax avoidance
not illegal, but a way of paying less tax
What UK legislation is in place to promote equality and diversity
Equality Act (2010)
what does the Equality Act do?
- It is unlawful to discriminate if it is related to the nine protected characteristics:
1. Age
2. Race
3. Sex
4. Gender reassignment
5. Disability
5. Religion or belief
6. Sexual orientation
7. Marriage or civil partnership
8. Pregnancy and maternity
what does indemnity mean
security or protection against a loss or other financial burden
what is the maximum level of uninsured excess a firm may have
Up and inc £500K indemnity-£10k or 2.5% of the sum insured (whichever is higher)
Over £500k indemnity-2.5% of the sum insured
what guidance to RICS give on PI insurance
Regulation document-PI requirements Version 7 (2021 July 10th)
what are the 3 requirements the RICS state PI cover must meet
- an ‘each and every’ claim basis
- RICS minimum policy wording. As a minimum, you should ensure that your policy wording is written on a full civil liability basis
- the minimum level of indemnity
what’s the difference between cover based on ‘each and every’ claim basis and an ‘aggregate ‘basis
say the policy covered up to £1m
an ‘each and every’ policy will cover each claim individually up to £1m
an aggregate policy will cover claims up to a total of £1m across all claims
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
6 years from company cessation
what is guidance RICS provides on handling client money
Client Money Handling 2019
RICS professional statement
what are CDM regulations
Construction Design Management Regulation 2015
-Ensure that health and safety issues are properly considered during a project’s development so risk of harm to those who have to build, use and maintain structures is reduced.
who is in charge of CDM
Principal Designer/Principal Contractor
what does a role of a principal designer as CDM manager include
- planing, managing and monitoring the pre-construction phase
- ensure risks are eliminated or controlled through design work
- passing information on to principal contractor
- ensure designers comply with their duties
- assisting the client in preparing pre-construction information
- preparing the health and safety file
what is F10 notification
CDM Regulations stipulate the HSE must be notified any construction works likely to exceed 30 days and have more than 20 workers simultaneously working at any point, or 500 person days.
This can be done with F10 form
what must the F10 form include
- key dates
- address/location of works
- name of the local authority
- projects description
- client name/contact
- this notice must also be a clearly displayed in the construction site office in a comprehensible form.
who has access to client money handling
Principals or senior employees
who is head of QS at RICS
Justin Sullivan
President: Kathleen Fontana
what would you do in a position of conflict of interest
- informed all parties
- offer to stand down from position/allow somebody else to take the role
- Informed consent-if there is no other option/the best option is to proceed (for example if there is only one stone merchant and he is also your brother)
can you appeal to a disciplinary panel judgement
Yes-it will go to an Appeal Panel
What is CIMAR
- Construction Industry Model Arbitration Rules 2016
- the objective of rules is to provide speedy, impartial, fair, cost effective binding resolution to disputes
give an example of when you’ve acted with integrity
On a valuation I noticed the contractor had made a formula error in his valuation
I allowed him to amend
example of when you’re taken responsibility
in preparing valuations, tender score, tender price confirmation, I always ensure it has QA checks before sending out to the client
what are the rules for better regulation
- Proportionality
- Accountability
- Consistency
- Transparency
- Targeting
what is RICS history
- It’s a surveyor’s club in 1792
- Institution of Surveyor’s in 1868 and only 49 members at that point
what is the role of RICS
REPA
- Regulate and Promotes the profession
- Maintains educational and professional standards
- Protects clients and consumers through codes of ethical and professional standards
- Provides impartial advice and guidance.
what are the RICS professional fees 2021
Newly qualification-£354
Chartered-£539
Fellow-£658
what’s the RICS business plan 2018-21
- influential thought leader
- trusted by our stakeholders and society
- RICS professional qualifications remain in demand
- Sustainable 21st century professional body
what’s the RICS structure
- Privy Council
- Governing Council
- standards and regulation
- management board
- audit committee
- nominations committee
- professional nominations committee
https://www.rics.org/de/about-rics/corporate-governance/
what are the boards beneath the management board
- finance committee
- world regional boards and market advisory panel
- remuneration committee
who regulates the RICS
- self regulatory/ head of regulation
- 5 principles of better regulation (surpass government own standards)
what are the bye-laws of the RICS
1) application and definitions-who they apply to -member/firm
2) membership and registration-membership types, eligibility for roles with RICS
3) designations-mrics/frics
4) contribution to funds-fees
5) conduct-comply with regulations/5 ethical standards
6) governing council, officers ans staff-powers of these positions
7) subordinate boards, committees and groups-outlines requirements of management structure
8） Procedures for general meetings-annual ordinary extraordinary meetings
9) accounts and audit-RICS accounts (income, balance, report)
10) general-property,trustees, contracts, dissolution, administration
An example of when you have met the 5 professional + ethical standards
- Respect; please, thank you , courteous with everybody
- Responsibility:
- Integrity: when the contractor had made a mistake that benefited the client, I corrected him
- High level of service-proactive in understanding client to manipulate our cost plan to better suit the client’s understanding.
- Trust: speak highly of profession
what are the international Ethical Standards
standard written by a group of independent industry leaders (real estate)
what are the 3 types of document the RICS produce
- standard-international standard-mandatory compliance-developed in collaboration with other bodies-IPMS-Office; Residential ICMS
- RICS professional statement; mandatory compliance under rule 4-conflict of interest, surveying safely
- Guidance
- RICS Code of Practice-Mandatory or recommended good practice
- RICS guidance note-recommended good practice-NRM/Blackbooks
- RICS information paper-information/commentary-flat roof covering
Following issue of an interim valuation your client rings you to tell you they don’t have the money to pay the contractor, what do you say (contractually/ morally)
Contractually
-you have 14 days until the final date for payment
-if you miss this date the contractor could be entitled to suspend/terminate the contract
-also entitled to EOT
Morally:
-you should pay the contractor as they have carried out the work
-it’s not only the contractor can be affected, it’s the whole supply chain.
Do the RICS any protection for Client money
Clients Money Protection Scheme
what is the Clients Money Protection Scheme
- Last resort scheme/act as an insurance for client’s
- member of public to be reimbursed their direct loss of funds if funds have been misappropriated
- claims must be notified within 6 months of the discovery of the loss
- £500k level of cover per claimant (cannot be exceeded)
- £5.3m per year
would you accept Glasonbury tickets from a contractor
- no- could be seen to bring into question my objectivity
- would be inappropriate for me to go with client/team
- Gifts and Hospitality are acceptable if they are proportionate and have a genuine business purpose
who is covered under MLR17
firms with a turnover of £100k
what are money laundering regulations 2017
- ensures firms carry out due diligence measures on customers
- money laundering is exchanging money/assets that were obtained criminally for money of other assets that are clean
- governs the purchase of property
- previously EU directive
- Now UK legislation
what are the offences/punishments under Proceeds of Crime Act 02/ML 17?
- ML2007-failure to comply-2 years fine both
- failure to comply with requirements for customer due diligence - Related Offence 2-upto 2 years fine
- tipping off a person who is known or believed to be under investigation - Related Offence 1-upto 5 years imprisonment, fine or both
- failing to disclose knowledge or suspicion - Principal offences-upto 14 years imprisonment, fine or both
- concealing, converting, transferring criminal property
- acquiring, using or possessing criminal property
- arranging or facilitating the acquisition or control of criminal property
what is meant by due diligence
- taking steps to identify your customers and checking who they are
- name
- photo ID/document
- Residential address
- DOB
- any beneficial owners/relevant third parties
Technical due diligence of property, when carried out by an RICS member or RICS
registered firm, consists of the systematic review, analysis, discovery and gathering of
information about the physical characteristics of a property and/or land (the property).
Financial Definition
Due diligence is an investigation, audit, or review performed to confirm facts or details of a matter under consideration. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party.
what is SAR
suspicious activity report
-if you have knowledge or suspicion of ML(money laundry) you should report it to the MLRO (money laundering reporting office) who will file the SAR
other than an ombudsman who can a complaint be made to
- Ombudsman (RICS)
- Fairway=mediator/adjudicator/expert witness
if you had agreed an appointment with a client, what would you send them to secure the contract
- appointment document
- terms and conditions
- scope of works
- PI insurance ; limit of liability
- Fee proposal
what would be excluded in your fee proposal
- VAT
- Long distance travel
- costs incurred through disputes
what is the bribery act
aims to promote anti-bribery practices amongst businesses, and came into force on 1 july 2011
what are offences under the bribery act
- it’s now an offence to promote bribery by anyone working on behalf of the business
- offence to give, promise or offer a bribe, agree to receive or accept a bribe either at home or abroad
what are bribery act punishments
- upto 10 years imprisonment (from 7)
- unlimited fine
what are the 6 principles of the bribery act
The Government considers that procedures put in place
by commercial organisations wishing to prevent bribery
being committed on their behalf should be informed by six principles.
-Proportionate procedures
-top level commitment
-risk assessment
-due diligence
-communication (incl training)
-monitor and review
how would you quantify limit of liability
RICS as minimum level
I would assess on a case by case, with reference to liability on similar projects
would aim to reduce exposure of firm by reducing liability
what is diversity
In terms of skills in a team, beneficial to have people with a range of talents/skills/backgrounds with different ways of thinking and problem solving
-In terms of characteristics, ethnicity, etc, appointments should be based on merit and not colour of skin ets. Therefore naturally a diversity would be good
how would you handle pandemic related risk in your appointment docs
Exclude
Brexit/pandemic forseeable
what guidance does RICS give on appointment
RICS standard form of consultant’s appointment
RICS standard form of consultant’s appointment explanatory notes
what would be included within your appointment documents
- definitions and interpretation
- appointment
- consultant’s obligations
- limitations of liability
- client’s obligations
- payment
- insurance
- dispute resolution
- termination
