Conflict of interest Flashcards
What is a Party Conflict?
A situation in which the duty of an RICS member or a regulated firm to act in the interests of a client conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.
What is an Own Interest Conflict?
A situation in which the duty of an RICS member or a regulated firm to act in the interests of a client conflicts with the interests of that same RICS member/firm or individuals within that regulated firm involved in the professional assignment.
What is a Confidential Information Conflict?
A conflict between the duty of an RICS member to provide material information to one client and the duty to another client to keep that same information confidential.
What does ‘Confidential Information’ mean?
‘Confidential Information’ means confidential information, whether held or disseminated electronically, verbally or in hard copy.
What is an Information Barrier?
‘Information Barrier’ means the physical and/or electronic separation of individuals within the same firm that prevents confidential information passing between them.
What does Informed Consent mean?
‘Informed Consent’ means consent given willingly by a party affected by a Conflict of Interest, demonstrating understanding of the conflict and its implications.
What must RICS members obtain when a conflict of interest exists?
Informed Consent from clients.
What is a Party Conflict?
A duty to one client conflicts with a duty to another.
What is an Own Interest Conflict?
The firm’s or individual’s interest conflicts with the duty to a client.
What is a Confidential Information Conflict?
The duty to disclose information to one client conflicts with the duty to keep it confidential.
What must RICS members maintain regarding confidentiality?
Confidentiality must be maintained unless disclosure is required by law or permitted by the affected party.
What must firms implement to manage conflicts of interest?
Systems and controls appropriate to the firm’s size and complexity.
What must firms maintain records of?
Conflict assessments, Informed Consent, and systems in place to manage conflicts.
What must be done if conflicts arise after a professional assignment begins?
They must be managed or disclosed to clients.
What is the definition of Informed Consent?
Clients must fully understand the nature of the conflict before consenting.
What is required for documenting Informed Consent?
Consent must be documented in writing to ensure transparency.
What are specific areas of risk in conflicts of interest?
Valuation work, agency work, and competing bidders.
What does the Appendix A provide?
A template to help firms obtain clear, documented client consent.
What is the conclusion regarding RICS professional standards?
They establish mandatory obligations for members to act with integrity, avoid conflicts, maintain confidentiality, and implement controls.
What is mandatory compliance?
The standard is not optional; failure to comply can lead to disciplinary action.
Why is confidentiality crucial?
Members must protect confidential information unless disclosure is required by law or agreed upon by the client.
Why is Informed Consent key?
Clients must fully understand and agree in writing before professionals proceed with conflicting assignments.
What is required for firm-wide systems?
All firms must implement controls to prevent and manage conflicts.
Why is record-keeping essential?
Firms must document conflict assessments, consent, and risk management procedures.
What are special conflict considerations?
Extra precautions are needed for valuation, agency work, and competing bidders.
What are Information Barriers?
A tool to help manage conflicts but do not replace the need for Informed Consent.
Why is transparency important?
Clear communication ensures that clients understand risks and professionals maintain ethical integrity.
