Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

APC 2023 > Ethics > Flashcards

Ethics Flashcards

1
Q

What would you do when faced with an ethical dilemma?

A

Refer to the RICS ethics decision tree

*Decision tree = framework of questions to consider legality of my actions / consistency with RICS Rules of Conduct

*Decision Tree Steps - HINT= Fish Love Red Coral Reefs, PDAs are Rude

> Facts? - Separate facts from mine or other’s emotional responses
Legal? - If unsure seek further advice
Rules?
Consult - with appropriate people - consider all risks / options
Reasoned/Informed decision?
Press?
Decide
Act
Reflect + Record

*Could also use RICS Regulation Confidential Hotline

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the purpose of the RICS regulating its members and firms?

A
  • To protect the public
  • To uphold professional standards and public confidence in the profession
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What may trigger or give rise to a disciplinary procedure?

A
  • Complaint to the RICS
  • Information received or established by RICS
  • Allegation by a client or third party

Not all shortcomings by firms/members will result in disciplinary proceedings but firms/members will be asked to justify their actions -recording part of ethics decisions tree/all decision making is super important

HINT - CIA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the different levels of disciplinary action?

A
    1. Action by Head of Regulation - Initial investigation
    1. Regulatory Tribunal (lay members)
    1. Appeal Panel (lay members)
  • reviews old/new evidence & can allow appeal and vary penalty imposed

HINT - ARA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What actions can be imposed if disciplinary action is required following an initial investigation by the Head of Regulation?

A

> Fixed Penalty Notice
RCO
Refer to single member or Regulatory Tribunal
Refer to directly to Regulatory Tribunal Disciplinary Panel

HINT - FRRR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are fixed penalties and when are they applicable?

A

> Breaches to Rules relating only to the supply of information to the RICS by firms/members

> May consist of a fine and / or caution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a Regulatory Compliance Order and when is it applicable?

A

> Low-level breaches of any Rule

> Written document stating corrective actions firms must take or restrain them from taking certain actions for a specified time

> May include agreement to pay fine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the Regulatory Tribunal Disciplinary Panel and when is it applicable?

A

> Serious breaches to Rules of Conduct

> Panel includes lay members

> 5 penalties it can impose
1. Regulatory Compliance Order (RCO)
2. Fine per breach (unlimited but proportionate to offence)
3. Condition of continued membership or registration
4. Expulsion of member/firm
5. Publication of hearing results in RICS Modus/website/local paper

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Give at least 2 examples of a breach of the Rules of Conduct where expulsion would be a suitable penalty imposed by the Regulatory Tribunal Disciplinary Panel?

A

Gross, persistent or willful failure to comply with an RICS rule of conduct

e.g. fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of a client’s money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

When would the RICS likely investigate concerns about social media posts?

A

> RICS Regulation paper on the Use of Social Media: Guidance for RICS Members (Version 1)

> RICS may investigate a social media post that adversely impacts upon public confidence or trust in the profession such as posts that are:

  • Discriminatory (which would also breach the Equality Act 2010),
  • Dishonest
  • Abusive or threatening
  • Bullying, harassing or victimizing another person or people

> RICS unlikely to investigate posts that are:
- critical of an organization’s policies or performance rather than individuals
- use professional/respectful language
- removed if requested to do so

> RICS can take disciplinary action to protect public or profession reputation

> Personal posts by members may also be investigate if they are highly offensive and may cause reputational damage to profession

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Give an example of social media activity that could cause reputational damage to the profession.

A

> Personal racist post
Posts that are bias against ethic minorities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

When was the RICS founded?

A

1868

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

When did the RICS receive its Royal Charter and what is a Royal Charter?

A

1881

> Royal document
Gives organization right to govern own affairs - don’t have to answer to the Privy Council
Defines organizations objectives & constitution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the different levels of RICS membership?

A
  1. FRIC
  2. MRICS
  3. AssocRICS
  4. Trainee/Student
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How do you become a fellow of the RICS?

A

> Must demonstrate 4/5 Fellow characteristics

  1. at least 5 years of being a MRICS
    2/3. professional/technical/academic achievement
  2. leadership role
  3. raise profile of RICS

> Must provide supporting portfolio of professional achievement including CPD record

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Talk to me about the governance structure of the RICS

A

> Governed by various boards, associations and councils as per terms of Royal Charter

> UK Structure - x4 National Boards, 10 Regional Boards, Local associations

> Boards/Committees report to Governing Council e.g. Management Board/Regulatory Board

> Governing Council chaired by RICS president Ann Gray

> RICS CEO = Richard Collins

> Governing Council has 21 members

> 17 professional groups covering property, land & construction - responsible for setting professional standards and best practice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Talk to me about Levitt’s Review 2021

A

> exposed lack of Clarity, Governance and Strategy of RICS

> called for review of PSG - Purpose, Governance & Strategy of RICS - Bichard review 2022

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are the major challenges currently facing the RICS & recent initiatives?

A

> Levitt Review exposed lack of Purpose, Governance and Structure

> RICS commissioned Lord Michael Bichard (2022) to
- clarify purpose of RICS
- provide recommendations on governing structure to achieve purpose
- make proposals for future culture and strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the role of the RICS?

A

M-P-B

> Maintain highest standards of education and training
Protect consumers through strict regulation of professional standards
Be the leading source of information and independent advice on land, property, construction and associated envrinmental issues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What were the key recommendations from the Bichard Review?

A

1/2. Public Interest - more focus on Public Interest - Royal Charter amended to create Public Interest panel to advise Governing Council + independent review of if RICS is acting for public advantage

  1. Maintain self-regulation - more independence of Regulatory functions
  2. More focus on D+I
  3. Empowering members - greater support for regional boards/ increased member engagement with focus on younger members
  4. Simpler, Clearer & Accountable governance structure
  5. Greater leadership on issues such as sustainability/climate change

P-I-M-D/E-S-G
> Please Investment More Dough in ESG

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are the benefits of becoming an RICS member?

A

Ruth Knows My New Secret = R-K-M-N-S

  1. Recognition
  2. Knowledge
  3. Market advantage
  4. Network (+137,500 members)
  5. Status
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What are the benefits of RICS regulation for firms?

A

Polly Can’t Shoot = P-C-S

  1. Confidence for clients - ‘gold standard’ from regulation
  2. Professionalism from firms who have to provide clear/impartial expert advice
  3. Security for firms from recognized complaints procedure, access to PII cover
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are the firm requirements for RICS regulation?

A

> RICS members - if 50% of Principals are members then must be regulated, if 25% can apply to be

> Annual return confirming compliance with RICS obligations incl. info on:
1. Type of business/staffing details
2. Statutory regulated activities
3. Nature of clients
4. Complaints handling procedure details & records
5. PII details
6. Whether firm holds clients money

HINT - Tell Siana No Coke Pills Weed - T-S-N-C-P-W

> Regulated firms must have a Responsible Principle to ensure compliance with regulations & report to RICS (Savills RP = Nicola McGinnis - ‘Nick drinking Guinness’)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the RICS approach to regulating firms?

A

To protect consumers and maintain trust in the profession through ensuring members and firms comply strictly to standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

When were the Rules of Conduct published & why were they updated?

A

> October 2021

> replaced Rules of Conduct for Members and Firms + 5 Global Professional and ethical Standards

> Updated to provide simpler/clearer structure (example behaviors for each rule) + focus on D&I/Technology/Global challenges

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What are the RICS Rules of Conduct?

A

B-M-P-T-A - Be Mindful Prior To Acting

Members and firms must…

  1. Be honest, act with integrity and comply with RICS obligations
  2. Maintain professional competence and ensure services are provided by competent individuals who have the necessary expertise
  3. provide a good-quality and diligent service
  4. Treat others with respect and encourage D&I
  5. Act in the public interest, take responsibility for their actions, act tp prevent harm and maintain public confidence in the profession
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What is Rule 1 of the RICS Rules of Conduct and what are some example associated behaviors?

A

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

Members and firms…

> do not mislead others by their actions or omissions or being complicit in those of others

> do not allow themselves to be influences improperly by others or by their own self interest

> are open and transparent with clients about their fees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What is Rule 2 of the RICS Rules of Conduct and what are some example associated behaviors?

A

Members and firms must maintain professional competence & ensure that services are provided by competent individuals with the necessary expertise.

Members and firms…

> ensure they have the necessary knowledge, skills and resources required to carry out work - check that employees/subcontractors carrying out work for them also do

> CPD - maintain and develop knowledge and skills throughout their career

> reflect on the work they have undertaken and what they can learn from it and apply it to future work

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What is Rule 3 of the RICS Rules of Conduct and what are some example associated behaviors?

A

Members and firms must provide a good-quality and diligent service.

Members and firms…

> understand their client’s needs and objectives before undertaking any work for them

> agree the scope, limitations and timescales of work to be provided with the client

> communicate in a clear and timely manner with clients in all circumstances, particularly if there is a change in the TOE or estimated costs/fees

> have effective quality control processes for work

> check that all data used is accurate and up to date, kept securely and they have the proper legal right to use it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is Rule 4 of the RICS Rules of Conduct and what are some example associated behaviors?

A

Members and firms must treat others with respect and encourage D&I.

Members and firms…

> respect the rights of others and treat others with courtesy

> treat everyone fairly and do not discriminate against anyone on any improper grounds such as age/disability/gender reassignment/pregnancy/race/religion/sexual orientation

> do not bully/victimize/harass anyone

> work cooperatively with others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What is Rule 5 of the RICS Rules of Conduct and what are some example associated behaviors?

A

Members and firms must act in the public interest, take responsibility for their actions and act to prevent and maintain public confidence in the profession.

Members and firms…

> must question practices and decisions they suspect are not right and raise concerns with appropriate persons such as colleagues/senior staff/clients/RICS - firms should provide processes for staff to raise concerns to senior management

> support those that have raised concerns

> ensure public statements made do not undermine public confidence in the profession

> take appropriate action if they think rules of conduct have been breached and report any significant breaches to the RICS

> cooperate with investigations and provide any necessary info

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What does Appendix A of the RICS Rules of Conduct 2021 provide?

A

Core obligations for members and firms - additional professional obligations are found in the mandatory requirements of RICS professional statements relevant to specific practices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

What are the core professional obligations for members? (Appendix A - Rules of Conduct 2021)

A

Members must…

  1. Comply with RICS CPD requirements
  2. Cooperate with RICS
  3. Promptly provide all information reasonably requested by the Standards and Regulation Board
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

What are the core professional obligations for firms? (Appendix A - Rules of Conduct 2021)

A

RICS-regulated firms must…

  • Cooperate with RICS (same as members obligations)
  • Provide all info promptly to Standards and Regulation Board (same as members obligations)
  1. Publish a complaints handling procedure INCLUDING RICS approved ADR provider + maintain complaints log
  2. Ensure all past and present work is covered by adequate/appropriate PII approved by RICS
  3. Arrange alternatives if there is just one sole principal so that professional work can continue in the event of incapacity/death/absence
  4. Display on business literature that they are regulated by RICS (in accordance with RICS policy)
  5. Report to RICS on any matter required under Rules for the Registration of Firms
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Talk to me about fee negotiations

A

Fee negotiations

> firms must avoid price fixing/aggressive fee cutting/collusion with competitors
- x4 Somerset estate agents were prosecuted and fined by CMA for colluding in 2017

> can negotiate fee with clients but must do so in professional manner

> granting/accepting referral fees should be clearly stated in TOE and considered with regard to Bribery Act 2010 and RICS Rules of Conduct 2021

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

What steps should you follow when looking to take on a new instruction?

A

C-I-T

  1. check professionally competent
  2. establish no conflicts of interest or personal interests
  3. Confirm TOE in writing & get signed by client BEFORE starting work
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What must be stated in all TOE?

A

> proposed fee basis

> payments of expenses (and how calculated)

> that copy of firms complaints handing procedure is available upon request

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

How does the Consumer Rights Act 2015 affect TOE?

A

Allows 14 day cooling off period from date of agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

In what situations would it be appropriate to decline an instruction?

A
  1. Competent
  2. Facts
  3. Proposed client will not sign TOE and/or complete AML checks
  4. Conflict of interest or personal interest
  5. PII cannot be agreed
  6. Advice/work is for a friend or pro-bono (i.e. for a charity) and PII wont cover work carried out on personal basis
  7. Client included in UK Gov sanctions list
  8. Would you be happy if your actions were made public e.g.. by newspapers or online?
40
Q

What tools can you use to help you decide whether to act for a client or not?

A

RICS Ethics Decision Tree - Fish Love Red Corals Reefs, PDAs are Rude

> Facts?

> Legal? - client will not sign TOE / complete AML checks / on gov. sanctions list

> Rules of conduct? - Competent / Conflicts / PII not agreed or wont cover pro-bono or friend work

> Consult with appropriate persons - have you considered all risks / options?

> Reasoned / Informed decision?

> Public?

> Decide

> Act

> Reflect & Record

41
Q

What would you include in your standard TOE for a valuation instruction and how would calculate the fees?

A
  1. Identification and status of the valuer
  2. Identification of the client(s)
  3. Identification of any other intended users
  4. Identification of the asset(s) or liability(ies) being valued
  5. Valuation (financial) currency
  6. Purpose of the valuation
  7. Basis(es) of value adopted
  8. Valuation date
  9. Nature and extent of the valuer’s work – incl. investigations and any limitations
  10. Nature and source(s) of information relied upon
  11. All assumptions and special assumptions to be made
  12. Format of the report
  13. Restrictions on use, distribution and publication of the report
  14. Confirmation that the valuation will be undertaken in accordance with the IVS
  15. The basis on which the fee will be calculated
  16. Where the firm is registered for regulation by RICS, reference to the firm’s complaints handling procedure, with a copy available on request
  17. A statement that compliance with these standards may be subject to monitoring under RICS’ conduct and disciplinary regulations
  18. A statement setting out any limitations on liability that have been agreed.
42
Q

What would you include in your standard TOE for an agency instruction and how would you calculate the fees?

A
43
Q

What is a conflict of interest?

A

A conflict of interest arises when a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two clients

e.g. financial interest / personal interest / commercial relationships / actins on both sides of a transaction

44
Q

What is conflict avoidance and conflict management & what is the difference between them?

A

Conflict avoidance e= do not accept the instruction

Conflict management = instruction is accepted but steps are agreed and put in place to manage the conflict e.gf. information/ethical barrier - agreed in writing by all parties

45
Q

Which RICS guidance would you refer to in the context of conflicts of interest?

A

RICS Global Professional Statement on Conflicts of Interest, 2017

> came into effect 1st Jan 2018

> sets out how to identify and manage conflicts

> states that members must not advise or represent a client that would result in a conflict of interest or serious risk of one expect when those involved or affected have provided their informed consent

> conflicts must be managed in accordance with statement - firms must keep records to demonstrate compliance

> to ensure compliance RICS regulated firms must have effective systems in place and controls that are proportionate to size and complexity of business

46
Q

What are the different types of conflict of interest?

A

Defined by RICS Global professional Statement on Conflicts of Interest (2017)

  1. Party Conflict
  2. Own Interest Conflict
  3. Confidential Information Conflict
47
Q

What is Informed Consent and when is it necessary?

A

> can only be sought if member or firm is happy that proceeding is the in the best interest of all of those involved and is not prohibited by law

> must be given in writing

> material factors must be explained transparently to the client so they understand them

48
Q

How would you handle a conflict of interest?

A
  1. Conflict Avoidance - once have full facts, decide if conflict can be managed to maintain transparency and openness or if it is irresolvable and compromises my impartiality
  2. Written advice to both parties - if accepting with conflict write to both parties to explain
    - nature of conflict & how will be managed
    - be as clear as poss so that party can make own decision - inform to get independent advice if needed
    - request written confirmation of their informed consent
  3. Conflict Management - set up info barrier in accordance with what agreed with client

D-W-M

Decide, Write, Manage

49
Q

How do you manage a conflict of interest?

A

Using information/ethical barriers

> Barrier must be robust so that no info leaked

> Take ‘reasonable steps’ to operate an effective barrier

> Surveyors on both sides must be different and physically separated e.g. different buildings/floors/separate support teams

> All info must be securely stored

> Clear audit trail must be kept of conflict check process & all written/oral comms - overseen by firm’s compliance officer

R-S-S-S-C

Robust Steps Separate Secure Compliance

50
Q

What is the RICS guidance for UK commercial investment agency and what are the key areas covered?

A

RICS Professional Statement: Conflicts of interest - UK commercial investment agency 2017

> additional mandatory statement for UK commercial inv. agency where specific risk identified

> covers
- dual agency (contractual agency relations with buyer/seller at same time) - NOT ALLOWED
- Multiple Introductions - exclusive/non-exclusive
- Incremental advice - can do if consented and info barrier
- Personal conflict - must declare facts to parties in writing before accepting an instruction

51
Q

How long should old files be held for?

A

Min. of 6 years before disposed of securely

52
Q

When would it be appropriate to provide a third party with access to your client information.

A

NEVER - Only if the client gives their approval or if there is an overriding statutory duty such as police/HMRC investigation

53
Q

Give me an example of where you have seen a conflict of interest managed in your firm.

A
54
Q

Could you explain how you would deal with a complaint from someone to whom you owe a duty of care including how you would initially deal with it, when you would escalate it and set the CHP in motion

A
55
Q

What is the RICS guidance on complaints handling?

A

RICS Guidance Note on Complaints Handling 2016

> outlines Complaints Handling Procedures

> explains how to respond to a complaint initially/investigate/escalate and record it

> highlights value of TOE in reducing complaints

56
Q

What are the standard minimum procedures for the handling of a complaint?

A

Stage 1 (In-House)

> CHP details issued when made
CHP must be efficient, clear and objective
complainant should be told name of person handling their complaint (complaints handling officer)
complaint must be made in writing
timescales for investigation should be recorded (must be acknowledged within 7 days and investigated within 28

Stage 2 (ADR)

> if complainant not happy with review then stage 2 of CHP involved using independent redress scheme chosen by firm
name of the redress scheme must be provided to complainant e.g. RICS Dispute Resolution Service

57
Q

What are the RICS CPD requirements?

A

> min. 20 hours per year
50% formal CPD
must maintain knowledge of RICS Rules of Conduct
CPD recorded using RICS CPD Management System

58
Q

What is the difference between formal/informal CPD?

A

Formal = structured learning with clear leaning objectives and outcomes

Informal training = self-managed learning relevant or related to role (self-directed learning)

59
Q

What is PII?

A

Professional Indemnity Insurance

> mandatory

> purpose to protect clients, surveyors and third parties

> must be underwritten by RICS approved insurer

> min. requirements are based on firm turnover

> firms aim to limit liability by capping individual instructions

60
Q

What is the maximum level of uninsured excess based on firm turnover?

A

up to £10 million = greater of 2.5% of sum insured or 10k

£10 million + = No set limit

61
Q

What are the minimum PII requirements for each and every claim?

A

100k or less = 250k

100-200k = 500k

200k + = £1 million

> for new business just estimate the turnover and adjust as time goes on

62
Q

How does a firm decide how much run-off cover they need?

A

Consumer claims = £1m aggregate cover over min. of 6 years

Commercial claims = firms to consider what is ‘adequate and appropriate’ for at least 6 years but RICS recommends longer as claims can be made up to 15 years after work undertaken

> Firms unable to get run-off cover from insurer can apply to RICS Run-off Pool

63
Q

What is your understanding of the RICS guidance note ‘Risk, liability and Insurance’, 1st Edn. 2021

A

> from May 2021 insures must provide cover for fire safety claims on a property of 4 storeys or less

> recommends use of liability caps to manage risks associated with instructions

> be aware of third party reliance and make clear that advice can only be relied upon by the client

64
Q

What is negligence?

A

A breach of a duty of care which results in damage.

65
Q

Which case law relates to negligence?

A

Yianni v Edwin Evans (1981) - valuer owed duty of care in tort to mortgagee purchaser despite having done the report for the lender and saying in the report that purchasers should not rely on this information - excluding liability is not enough if majority of people rely on them despite warnings

Scullion v Bank of Scotland - valuer did not owe duty of care to a purchaser like Yianni v Edwin Evans as it was a commercial transaction where it is presumed that the purchaser is ‘commercial astute’

Burgess v Lejonvarn - professionals providing pro-bono services and without a contract still owe duty of care in tort to act with reasonable care and skill

66
Q

What is the Limitation Act 1980?

A

Limitation periods for negligence

Contract = 6 years from date of negligence / S14a - 3 years from knowledge of damage subject to 15 year longstop date from negligence

Tort = 6 years from date claimant suffered the loss

67
Q

How can you avoid negligence claims?

A

> ensure fully understand client objectives

> confirm instructions in writing in TOE

> ensure competency

> work in accordance to RICS Standards and Guidance Notes

> take detailed files and notes / photos

> stay up to date with market knowledge / legislation - record CPD

> cap professional liability excesson PII policy in TOE

68
Q

What needs to have occurred for a negligence claim to be made?

A

Breach of duty of care -> loss -> damages (negligence claim)

69
Q

Which Rule of Conduct underpins handling client’s money?

A

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligations including their obligations to the RICS

> example behavior - Firms keep client money safe and have appropriate accounting controls.

70
Q

What are some examples of when you might handle client money?

A

> holding deposits

> collecting rent

> collecting service charges

71
Q

Which RICS Professional Statement relates to handling client’s money?

A

RICS Professional Statement ‘Client Money Handling’, 1st Edn 2019

72
Q

What are the main areas of good practice set out in the RICS Professional Statement ‘Client Money Handling’, 1st Edn (2019)

A
  1. Holding client money
  2. Providing info to clients
  3. Receipts of client money
  4. Payments from clients accounts
  5. Accounting records and controls
  6. Compliance
73
Q

When handling clients’ money, what are the procedures that Surveyors must be aware of?

A

> client accounts must be kept separately & identifiable

> ‘client’ must be on account and cheque book

> client must be able to have on demand

> interest must be agreed & accounts kept in credit

> regular bank reconciliation against expenditures - at least monthly

> accurate records kept

> money only withdrawn if properly required

> two signatures required

> firms must display procedure on website if handling client monies

74
Q

What is the RICS Clients’ Money Protection Scheme?

A

last resort f firms cannot pay clients’ money

split into two - client money protection for surveying services /residential services

75
Q

What are the RICS requirements when setting up a new firm? / How would you set up a new firm?

A

Inform RICS - Firm Detail Form
Appoint responsible principle & complaints handling officer (or external surveyor if sole principal)
Register for regulation
Arrange PII & send RICS details
Setup complaints log and client money handling procedures incl. Protection Scheme
Register for RICS VRS if doing valuations
Obtain RICS approval of CHP
Use logo kit from RICs designation
Plan for succession/future running of business if sole practitioner
Ensure CPD logged on RICS CPD management System & setup staff training plan
Complete online RICS annual return

I A R A S - Inform Arrange Register Appoint Setup
R O U P E C - Register Obtain Use Plan Ensure Complete

76
Q

What are the statutory requirements when setting a new firm?

A

Name - disclose business name
Disability discrimination compliance - Equality Act 2010
Financial services compliance - Financial Services and Markets Act 2000/FSA 2012
Bribery Act 2010 compliance
Appoint money laundering officer - Money laundering regulations 2017
H&S compliance - H&S at Work Act 1974
Asbestos register (Control of Asbestos Regulations 2012)
Fire Safety compliance - Regulatory Reform (Fire Safety) Order 2005
Register for data protection (GDPR 2016 / Data Protection Act 2018)
Estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967)
Inform HMRC for VAT and Tax registration (VAT threshold - 85k pa turnover)
Employment law e.g. National Living Wage
Insurance compliance for employer and public liability

77
Q

How would you close a practice?

A

Inform RICS
Ensure clients informed ASAP
Return monies
Inform insurers - procure PII for min. 6 years
retain client files / records for min. 6 years

78
Q

What is the key legislation to consider in relation to Gifts, bribery and corruption?

A

Bribery Act 2010
Proceeds of Crime Act 2002
Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017)

79
Q

Talk to me about the Bribery Act 2010.

A

Purpose - reduce bribery in business in UK and abroad

Definition of a bribe - ‘the giving offering, promising or receiving of an advantage such as a payment gift or service for an action which is legal / breach of trust

Six principles -
1. Proportionality
2. Top level commitment
3. Risk Assessment
4. Due Diligence
5. Communication
6. Monitoring and review

Four offences - bribing/receiving bribe/bribing foreign public official/failing to prevent bribery

Penalties -

  • Hospitality is allowed as long as it is proportionate and recorded
  • Defense if you can show you put adequate preventative procedures in place e.g. training
80
Q

Which legislation governs money laundering?

A

Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

> policed by - Serious Fraud Office

81
Q

What is money laundering?

A

When proceeds of criminal activities are disguised or converted and then realized as legitimate assets

82
Q

What are the key provisions of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

A
  1. Requirement for written money laundering and terrorist financing risk assessment
  2. Implemented systems / policies / procedures to address ML and terrorist financing risks
  3. Appropriate internal controls
  4. Staff training
  5. Comply with new customer, enhanced, simplified DD requirements
  6. Compliance with PEP requirements
  7. Record keeping of policies and procedures
  8. AML checks confirming identity or prospective purchaser / their source of funds before contracts exchanged
  9. Enhanced DD - consider high risk factors when assessing if enhanced DD needed & seek additional info/monitor e.g. where transactions based in high-risk third countries
  • Limit of 10k euros cash acceptance
  • senior staff member must take responsibility for all compliance
  • Money Laundering Reporting Officer must be nominated to report suspicions with SAR (suspicious activity report) to national Crime Agency
  • Maintain records for min. 5 years & report o Companies House any discrepancies between both their information
83
Q

What are the penalties for non-compliance with Money laundering, Terrorist Financing and Transfer of Funds Regulations (2017)

A

> max. 14 years prison sentence and/or unlimited fine for assisting with money laundering

> max. 5 years prison sentence and/or unlimited fine for tipping off a suspected person

84
Q

What legal obligations do estate agents have under the The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

A
85
Q

What are the levels of Due Diligence checks set out by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

A
86
Q

What are the typical requirements for money laundering checks for CDD?

A
87
Q

What are the typical requirements for money laundering checks for EDD?

A
88
Q

What is a Politically Exposed Person?

A
89
Q

What are the red flags associated with money laundering?

A
  1. Inability / unwilling to provide identity documents
  2. Changes to party involved in transactions
  3. Unusual transaction features - unexpected urgency / loss-making / odd transaction for client
  4. Payments in unusual currencies
90
Q

What is the Proceeds of Crime Act 2002?

A

Gives UK enforcement authorities power to recover in criminal/civil proceeding money/assets deemed to be proceeds of crime

Creates set of criminal offences intended to combat AML offences

  1. Concealing criminal property
  2. Arrangements - becoming involved in or entering into arrangement where you know or suspect facilitates the acquisition, use or control of criminal property
  3. Acquisition, use and possession of criminal property
91
Q

What is the RICS Professional Statement Countering Bribery And Corruption ,Money Laundering And Terrorist Financing, 1st Edition (2019)?

A
  1. sets out Mandatory requirements for RICS members/firms relating to bribery, corruption, money laundering and terrorist financing
  2. Guidance supporting good practice for first section
  3. Supplementary guidance on some concepts from part 1/2
92
Q

How would you undertake due diligence priorto and during instructions?

A

incl. employer’s anti-bribery procedure sna d difts register as well as AML procedures

93
Q

If you were given a scenario involving the acceptance of cash, a gift or hospitality, what would you consider?

A
94
Q

If you were given a scenario involving AML what would you consider?

A
95
Q

How long should old files be held for?

A

Min. of 6 years before disposed of securely

96
Q

What is the maximum level of uninsured excess based on firm turnover?

A

up to £10 million = greater of 2.5% of sum insured or 10k

£10 million + = No set limit

APC 2023 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions