Conduct rules, ethics and professional practice Flashcards
What does a firm need to do to conform with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017?
- Money Laundering and terrorist financing risk assessment
- Implement systems, controls and procedures to address terrorist financing risk assessment
- Apply above across firms structure
- Adopt appropriate internal controls
- Provide training for staff
- Comply with CDD EDD and SDD
- Comply with regulations for PEP
- Record keeping and data protections are compliant
Who manages complaints at the RICS?
Head of regulation
Why would you want to be a member of the RICS?
- Part of a large network of 130k other members
- international recognition by clients and peers
- 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 back of Modus.
Why should a chartered surveyor remain solvent?
- It’s a rule (Professional Obligation)
- Could be vulnerable to bribery
- Doesn’t promote trust in the profession.
Why do firms have to have PI insurance?
- 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 £ 100,000 or less = £ 250,000 limit of indemnity
£ 100,001 to £ 200,000= £ 500,000 limit of indemnity
Over £ 200,000 = £ 1,000,000 limit of indemnity
Where can you find out more about PII requirements for RICS firms?
RICS regulation - Professional indemnity insurance requirements
(Version 7 with effect from 2020)
What are the CPD requirements for a MRICS?
20 hours. 10 formal, 10 informal. Definitions of formal/informal online.
When 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
- Tell RICS service you are providing
- Complaints handling procedure
- PII (estimate turnover to calculate)
- 50% must be MRICS (until Feb 2020, reduces to 25%)
- Company name, number
- Register company w/ companies house
- What the professional service you are offering
- Provisions in place for incapacity or death of sole practitioner
- Appoint a contact officer
- H&S
- Data management
What would handlings 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 procedure?
@@@@@CONFIRM W/ YOUR COMPANY @@@@@
Complaint made
Sent to complaints handling person for review
Acknowledged
Respond
Third party organisation used should complainer not be satisfied
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 further guidance
What are the RICS global professional and ethical standards?
- Take RESPONSIBILITY
- Treat others with RESPECT
- Act with INTEGRITY
- Provide a high level of SERVICE
- Promote TRUST in the profession
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?
Any gift must be noted in the Register of Interest.
Maximum threshold is £100 for an individual, £250 for a group.
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 financing February 2019.”
How do you undertake conflict checks?
In a PQQ we may include a line that requests the contractor to list any relations/associations with the client/our firm
Same when we are appointed by a client
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
Conflicts 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:
(a) in the interests of all of those who are or may be affected and
(b) 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 by 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 the 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 EU10,000 in cash, counted and receipted.
What work can you do prior to agreeing your terms of engagement with a client?
Anything, so long as you do not advise the client.
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 they can understand that information.
- Respecting confidential information of your clients and potential clients.
- Don’t divulge information to others unless it is appropriate to do so.
- Not taking advantage of a client, a colleague, a third party or anyone to whom you owe a duty of care.
- Not allowing bias, conflict of interest or the undue influence of others to override your professional or business judgements and obligations.
- Making clear to all interested parties where a conflict of interest, or even a potential conflict of interest, arises between you or your employer and your client.
What constitutes providing a high level of service?
- Be clear about 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 requires 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, about how you behave in your private life.
- Understanding how your actions affect others and the 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 the 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 organisation you work for to put the fair and respectful treatment of clients at the centre 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 complainant 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 organisation that you work for, with RICS, or with any other appropriate body or organisation.
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 gifts 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 negotiations or tender period
What is the FCPA?
The US Foreign Corrupt Practices Act
What does the 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 vs passive bribary?
Active = offering or giving
Passive = receiving
What’s the difference between the FCPA and UKBA (UK Bribary Act)?
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 inprisonment
- $250,000 fine per violation for individuals
- $2,000,000 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 organisation e.g. UN, World Bank, IMF
What is your company’s policy with regards to accepting gifts?
- I may accept and offer business hospitality such as meals and entertainment provided it has a legitimate business purpose and the expense is reasonable, proportionate and transparent
- Hospitality must not be offered if it could be seen to influence the recipient improperly
- No hospitality when bidding for a tender or dealing with a public official
- The host must be present when giving hospitality, otherwise it becomes a gift
- Anyone giving or hosting entertainment must sign a statement
- Hopsitality above the threshold (£100) as defined in the Company’s Gift Policy in the “Register of Interests”.
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:
- Age
- Disability
- Gender reassignment
- Marriage & civil partnership
- Pregnancy & maternity
- Religion and belief
- Sex
- Sexual orientation
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 to and incl £500k indemnity - £10,000 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 - PII Requirements Version 7 (2020)
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 is fully retroactive mean?
This refers to PI insurance.
A PI insurance policy works on a ‘claims made’ basis, meaning it covers claims made in that period regardless of when the issue actually happened.
If the retroactive date (date at which the policy period covers from) in the agreement states “none”, the policy is fully retroactive.
