Conflicts of interest Flashcards
When does a conflict of interest arise?
When a firm’s independence and impartiality are threatened due to a conflict between two clients.
What are some examples of conflict of interest?
- Any financial interest
- A personal interest
- Commercial relationships
- Interests of you or your firm
- Acting on both sides of a transaction
What should be the first thing you do?
Decide whether to decline the instruction or accept on receipt of full facts.
What is conflict avoidance?
When you do not accept the instruction
What is conflict management?
When the instruction is accepted and steps are agreed and put in place to manage it.
e.g. Information barrier
What should be considered when making the decision to accept or decline the instruction?
Transparency and openness - can these be maintained?
What should you do if you decide to accept the instruction?
Set out in writing to both parties - disclosure, proposals to manage, inform them that it is their decision and request written confirmation.
How should an information barrier operate?
Ensure it is robust enough so that no information passes between the two parties.
Surveyors must be physically separated - different buildings/floors.
All information to be securely stored.
Compliance Officer to oversee.
Clear audit trail of the conflict check process.
What is a personal interest?
Occurs when acting for a connected person.
e.g. family member, close business associate, someone with whom you have a financial interest/benefit.
OR
If it is a case that is of personal interest to you.
e.g. live nearby to a property, or property owned by family member
What should happen in the event of personal interest?
Can act but declare facts promptly and in writing before accepting the instruction.
State the capacity in which you are acting.
