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APC > Ethics > Flashcards

Ethics Flashcards

1
Q

What is a conflict of interest?

A

Where a surveyors independence might be challenged due to acting for clients with competing interests or where a personal interest conflicts with that of a client

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2
Q

What is an information barrier?

A

Physical or electronic separation of individuals or groups of individuals within the same firm to prevent confidential information from passing between them

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3
Q

Rule 1 and an example behaviour

A

Members and firms must be honest, act with integrity and comply with their professional obligations, including to RICS

Not misleading others, identifying conflicts of interest, transparent with clients about services

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4
Q

What do the new rules of conduct replace?

A

The old Rules of Conduct for Members, Rules of Conduct for Firms and the Global Ethical and Professional Principles

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5
Q

Why do we have the new rules of conduct

A

To provide more flexibility recognising the global nature of RICS, simplified structure in one document easier for surveyors and the public to use, maintain public confidence, focus on D&I and sustainability

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6
Q

Rule 2 and an example behaviour

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary skills and expertise

Identify development needs and undertake CPD, reflect on work undertaken to apply learnings going forward

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7
Q

Rule 3 and an example behaviour

A

Members and firms must provide a good quality and diligent service

Understand client’s needs and objectives before accepting work, keep a proper record of decisions, encourage sustainable solutions, seek feedback from clients and implement it

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8
Q

Rule 5 and an example behaviour

A

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

Ensure public statements where I could be identified as a member do not undermine public confidence

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9
Q

Rule 4 and an example behaviour

A

Members and firms must treat others with respect and encourage diversity and inclusion

Be aware of and challenges own unconscious bias, part of gender balance network

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10
Q

Professional obligations to the RICS for members

A

Comply with CPD
Cooperate with RICS
Provide all information reasonably requested by the Standards and Regulations Board

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11
Q

Professional obligations to the RICS for firms

A

Publish CHP including ADR
Adequate PII
Cooperate with RICS
Provide all reasonably requested information by the Standards and Regulation Board
Display symbol to show regulated by RICS on any literature
Cooperate with RICS

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12
Q

RICS Governance Structure

A

Governing Council
Management Board
Standards and Regulations Board
Regulatory Tribunal (independent)
Audit Committee

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13
Q

RICS purpose

A

Maintain highest standards in education and training
Protection consumers through regulation and professional standards
Be the leading source of information and independent advice on land, property and construction

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14
Q

Bichard Review recommendations (4 of 7)

A

Renewed focus on public interest remit of RICS
Increased focus on D&I
Increased member engagement focusing on younger members
Undertaking independent review of RICS governance and effectiveness at delivering against Charter for public advantage every 5 years

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15
Q

Benefits of RICS membership

A

Status, Recognition, Market Advantage, Knowledge, Network

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16
Q

Steps for complaints handling

A

Inform PII insurers
Issue details of CHP and officer who will be investigating
Implement procedure in quick, clear, transparent manner
7 days to acknowledge, 28 to investigate
ADR if complainant still not happy

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17
Q

Four offences under Bribery Act 2010

A

Bribing
Receiving a bribe
Bribing a foreign official
Failing to prevent bribery

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18
Q

6 principles of Bribery Act 2010

A

Proportionality
Top level commitment
Risk assessment
Due diligence
Communication (including training)
Monitoring and review

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19
Q

Gifts handling

A

check proportionality, check it won’t impact objectivity (including timing), firm gift policy, inform line manager, gifts register

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20
Q

Key obligations under Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

A

Register with HMRC if carrying out agency work
Written risk assessment
Implements policies and procedures
Staff training
Comply with CDD requirements (simplified, standard, enhanced)
Money Laundering Officer
Appropriate record keeping for at lease 5 years
AML checks on purchase and source of funds
Enforce sanctions
10,000 euro limit on cash

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21
Q

Customer Due Diligence process

A

Verify client identity / identity of transacting parties
If company get name, company number address, identify beneficial owners of the client/ persons with significant control
If individual passport/proof of address
Source of funds
Risk assessment - adverse media, nationality, political exposure
Ensure not on sanctions list
Obtain information on purpose of transaction and funding arrangements if appropriate
Enhanced e.g. for PEPs - further detail on background and purpose, source of wealth

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22
Q

What is a politically exposed person

A

Individuals around the world in prominent public functions making them at risk of abusing their position for private gain and laundering proceeds of this abuse. PEPs and their families and close associates must therefore go through enhanced scrutiny

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23
Q

Money laundering red flags

A

Inability/unwillingness to provide identity documents
Changes to parties involved in transactions/funds coming from unconnected source
Urgency
Potential loss making transaction
Attempts to pay in cash or unusual currencies

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24
Q

Key points in Countering bribery, corruption, money laundering and terrorist financing 2019

A

Compliance with the law
Periodic written evaluation of risks to firm
PEPs need to identify beneficial owner
Publish best practice code
Set up a gifts register
3 W’s

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25
Q

PII purpose and requirements

A

Foremost to protect the client from potential loss due to negligence, also protects the firm
100k turnover or less 250k minimum
100k - 200k is 500k minimum
Over 200k is 1m minimum

26
Q

Royal charter

A

1881 - must maintain and promote the usefulness of the profession for public advantage in the UK and any other part of the world

(RICS founded 1868)

27
Q

Party Conflict

A

Relating to work in the same or related instruction for different parties

28
Q

Own Interest Conflict

A

Relating to interests of individuals at RICS firm involved or directly involved in the instruction

29
Q

Confidential Information Conflict

A

Where there is a duty to provide material information to one client but there is a duty to keep that same information confidential for another client

30
Q

Informed consent

A

Must be in writing and is only informed by the surveyor/firm has been entirely clear and transparent about all material factors regarding the nature of the conflict and proposals to deal with it so that the affected parties understand what they are agreeing to

31
Q

Key client money handling procedures

A

Client accounts must be separate and have the word client in the name of the account
Client must have access to their monies on demand
Client accounts must be reconciled regularly and kept in credit
Publish client money handling procedures on website

32
Q

What is required when starting a new practice?

A

Inform the RICS using Firm Detail Form
Appoint contact officer responsible for all RICS communication
Arrange PII and send details to RICS
Set up procedures for client money handling including a protection scheme
CHP procedure approved by RICS
Use RICS logo on materials to show regulated by RICS
Set up staff training plan and ensure CPD logged on RICS CPD management system
Arrangements for if incapacitated if sole practitioner

33
Q

What is required when closing a practice

A

Inform RICS and client
Return client money
Inform insurers and procure run off cover for a minimum of 6 years
Retain records for a minimum of 6 years

34
Q

Negligence definition

A

Failure to act with proper care and skill

35
Q

Ethics definition

A

Moral principles governing a person’s behaviour

36
Q

When can claims be brought under the Limitation Act 1980

A

Contract - 6 years from the date of the negligent act or 3 years from the date of knowledge of the damage subject to a 15 year longstop date

Tort - 6 years from date of loss suffered

37
Q

What are the penalties under the money laundering, terrorist financing and transfer of funds regulations 2017

A

14 years in prison and or unlimited fine
5 years and or unlimited fine for tipping off or failing to report

38
Q

Which RICS guidance is there on client money

A

Client money handling 2019 PS

39
Q

What is the RICS disciplinary procedure

A

Investigation by the Regulatory Tribunal. For less serious cases may be a consent order. If more serious then it will go to the disciplinary panel where the outcome could include a fine or expulsion/de registration if it’s a firm

40
Q

When did the new rules of conduct come into effect?

A

2 February 2022

41
Q

When did RICS countering bribery, corruption, money laundering and terrorist financing PS come into effect?

A

1st September 2019

42
Q

What CPD have you undertaken regarding anti-bribery and anti-corruption

A

I’ve undertaken mandatory training provided by my firm outlining our internal gifts and entertainment policy. This also covered anti competitive (e.g. discussing bids and tenders with competitors) behaviour and sanctions checks

43
Q

What were the material factors of the potential conflict you highlighted

A

The new potential instruction was regarding some surplus sites the second client had. Other members of my team were working with the joint venture partner the second client. Myself and my supervisor in working for the second client would become aware of any previous offers for these sites and well as the client’s strategies which could potential advantage the first client were they to find out about them

44
Q

Why was it in the clients’ interest for you to proceed despite the conflict?

A

My supervisor had already provided advice regarding one the asset which was a complex heritage asset and therefore was best placed to provide further advice
The initial client was partnered with the second so still in their interests for their partner to receive timely advice

45
Q

At what point did you establish that you were competent to undertake inspections alone

A

When I had absorbed the technical knowledge through shadowing and CPD and also gained enough practical experience
Typically I was still accompanied predominately due to client expectations of having a qualified surveyor inspect

46
Q

What is the law governing bribery and money laundering

A

The money laundering, terrorist financing and transfer of funds regulations 2017

47
Q

Which RICS statement cover bribery and money laundering

A

Countering bribery and corruption, money laundering and terrorist financing 2019

48
Q

What are the penalties in the Bribery Act 2010 and who policies it

A

Maximum 10 years in prison and unlimited fine
Serious Fraud Office

49
Q

Where do you report suspicions of money laundering

A

An appointment firm Money Laundering Reporting Officer reports to the National Crime Agency

50
Q

What 3 things do you need to do before commencing an instruction

A

Competence
Independent
Signed ToE

51
Q

How do you undertake a conflict check

A

I use my firm’s database to check on the client, property and any third parties

52
Q

In what circumstances would you decline an instruction

A

Not competent
A conflict that can’t be managed
Prospective client is on sanctions list

53
Q

What is run off cover and what is required

A

Insurance covering claims after a practice has ceased operating. Required for at least 6 years and under new RICS requirements Feb 22 consumer claims will now automatically be covered with a £1m aggregate limit
The RICS Assigned Risk Pool provides insurance where firms are unable to obtain it

54
Q

What is the difference between a code of practice and practice statement

A

A practice statement is mandatory and a code of practice is developed in collaboration with other professional bodies/stakeholder. It can have the status of a guidance note or professional statement

55
Q

What does a firm have to detail in an annual return?

A

Valuer registration scheme if needed
Number of directors and principals, addresses, countries operating in, responsible principal (primary responsibility for ensuring all RICS standards are upheld)

56
Q

Which RICS guidance covers complaints handling

A

Complaints handling 2016 guidance note

57
Q

Who do you report to if you have suspicions of sanctions being breached e.g. access of frozen assets

A

Office for Financial Sanctions

58
Q

How do professional obligations arise

A

Statute e.g. occupier’s liability, misrep
Common law - contracts (leases, val reports), tort (negligence)
Professional standards and codes of practice

59
Q

What are the requirements for registering with the RICS

A

At least 25% RICS qualified professionals
Designate a responsible principal accountable to compliance with RICS
Use RICS logo

60
Q

What are JLL’s policies regarding anti bribery

A

Gifts and hospitality policy
Whistleblowing procedures
Mandatory training

61
Q

How long do you keep AML records for?

A

5 years and no more than 10 from end of transaction/relationship

62
Q

What is client money

A

Money that is held on behalf of another firm or person

APC (17 decks)

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