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RICS APC Valuation Pathway 2023 > Ethics > Flashcards

Ethics Flashcards

1
Q

What is Rule 1 and can you provide any example behaviours?

A

Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
Example behaviours include;
- Not to be influenced improperly by others.
- Open and transparent with clients about fees and services
- Keep client money safe
- Provide advice in a professional context, transparently and based on reliable evidence.

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2
Q

What is Rule 2 and can you provide any example behaviours?

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Example behaviours include:
- Only undertake work that they have knowledge, skills and resources to carry out competently.
- Maintain and develop their knowledge and skills throughout their careers.
- Stay up to date with relevant legislation, codes of practice and standards.

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3
Q

What is Rule 3 and can you provide some example behaviours?

A

Members and firms must provide good quality and diligent service.
Example behaviours:
- Understand clients needs and objectives
- Agree the scope of service, limitations and timescales
- All data used is accurate and up to date, kept securely and the firm have a legal right to use and store it.

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4
Q

What is Rule 4 and can you provide some example behaviours?

A

Members and firms must treat others with respect and encourage diversity and inclusion.
Example behaviours:
- Respect the rights of others and treat others with courtesy
- Firms check that supply chains do not involve modern slavery
- Develop an inclusive culture, support equal access, identify and address unconscious bias

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5
Q

What is Rule 5 and can you give some example behaviours?

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.
Example behaviours:
- Respond to complaints promptly, openly and professionally
- Questions practices and decisions that are not right
- Manage professional finances responsibly
- Co-operate with investigations

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6
Q

What are the professional obligations of members?

A
  1. Comply with CPD requirements
  2. Cooperate with RICS
  3. Promptly supply all information to the Standards and Regulation Board
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7
Q

What are the professional obligations of firms?

A
  1. Complaints handling procedure
  2. Professional indemnity insurance
  3. Sole practitioner must make arrangements for their incapacity
  4. Cooperate with RICS
  5. Provide information to Standards and Regulation Board
  6. Designation to denote they are regulated by RICS
  7. Report to RICS anything reported under Rules for the Registration of Firms
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8
Q

What is the mission statement of the RICS?

A
  • offer highest standards of professional service
  • promote and enforce standards
  • solutions to major challenges facing built environment
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9
Q

How is the RICS structured?

A
  • self-regulated and internally monitored
  • bye-laws determine regulation

Governing Council - manage and agree strategy
Audit Committee, Regulatory/Management Board - execute strategy

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10
Q

What are the RICS’ 5 principles of better regulation?

A
  • Proportionality
  • Accountability
  • Consistency
  • Targeting
  • Transparency
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11
Q

What is the difference between RICS ethics and rules?

A
  • Ethics are a set of moral values
  • Rules of conduct are a framework that we work to
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12
Q

In the case of a breach of a rule of conduct, what is the procedure?

A
  • Not every shortcoming will necessarily give rise to proceedings
  • First step - formal investigation by the Head of Regulation of the RICS
  • RICS can request information/ inspect
  • Members must cooperate with enquiries
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13
Q

How can a disciplinary proceeding be triggered?

A
  • Someone complaining to the RICS
  • An allegation by client or third party
  • Information received or established by RICS
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14
Q

What three actions can be imposed after the end of the investigation?

A
  • Fixed penalty - a fine by RICS
  • Consent order - written agreement between RICS and member/firm concerning disciplinary issue. Can require member to take corrective actions.
  • Disciplinary panel
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15
Q

When is a disciplinary panel applicable?

A
  • Used for more serious breaches of conduct
  • Panel usually held in public
  • Burden of proof is on the RICS
  • Balance of probabilities approach adopted
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16
Q

What sort of breaches would expulsion be suitable for?

A
  • Gross, persistent or wilful failure to comply with a code of conduct
  • Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of client’s money.
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17
Q

What procedures must you follow if you are staring up a new practice?

A
  1. Obtain start up pack
  2. Inform RICS and register for regulation
  3. Appoint a contact officer
  4. Complaints handling procedure
  5. Professional indemnity insurance
  6. Abide by Rules of Conduct for Firms
  7. Use designation on all practice material
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18
Q

What insurances would you need to start up your own practice?

A
  • PII
  • Employer’s liability
  • Public liability
  • Building’s insurance for office premises
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19
Q

What information do registered firms need to send to RICS annually?

A

Annual return - carried out online
- Type of business/staffing
- Nature of clients
- Training provision
- Complaints Handling Procedure
- PII details
- Whether the firm holds client’s money

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20
Q

What processes do regulated firms need to put into place when handling client’s money?

A

Preserve the security of client’s money
RICS regulated firms that operate a client account must:
- Account must not be overdrawn
- Agree terms and advise client on bank details
- Principle to oversee accounting functions
- Competent and knowledgable staff to process money

21
Q

What is meant by the term negligence?

A

Negligence is a failure to provide the duty of care that is owed to the client

22
Q

What do you know about the Merrit V Babb case?

A
  • 2001
  • Importance of run-off cover
  • A surveyor was sued for negligence by a former client
  • Surveying firm had been wound down so surveyor was personally pursued for damages
  • Highlights need to ensure run-off cover in place for all previous employees
23
Q

What must a complaints handling procedure include?

A

RICS provides a model form
- must include redress scheme
- must be free of charge within first stage
- records kept of complaints, progress and outcomes
- clear, transparent and impartial

24
Q

What is an independent redress scheme?

A

RICS firms must specify scheme - ombudsman, arbitration or adjudication
- Consumer scheme designed to handle small issues that would be disproportionately expensive to take to court
- If scheme judges in favour of complainant it is binding
- If in favour of firm it can progress to court

25
Q

What should you do on receipt of a letter of complaint?

A
  • Acknowledge receipt
  • Forward to designated complaint handler
  • Inform PII provider
26
Q

What are Bye Laws?

A

These are the enabling principles underpinning rules and regulations

27
Q

What is the current RICS document relating to PII?

A

UK Professional Indemnity Insurance
requirements
Version 9
with effect from 1 April 2022

28
Q

What are the minimum limits of indemnity?

A

Firm’s Turnover:
£100,000 or less = £250,000
£100,001 and £200,000 = £500,000
£200,001 + = £1,000,000

29
Q

Why do firms need PII?

A
  1. To protect a firm from financial losses
  2. Protect firm against consequences of liability to pay damages for third parties for breaches of professional duties
  3. Ensure’s firm’s clients do not experience financial losses the firm cannot meet
30
Q

What does the RICS document on PII set out?

A
  • RICS recommended insurance provider
  • Assigned Risks Pool - short term cover
  • On each claim basis
  • Retroactive claims made basis
  • Run off cover (6 years)
  • Full civil liability
31
Q

What is the legislation relating to Money Laundering and what does it include?

A

Money Laundering Regulations 2017
- sets out additional obligations of firms to conduct customer due diligence

32
Q

What is the RICS guidance in relation to money laundering/bribery and what does it provide?

A

Countering bribery and corruption, money laundering and terrorist financing
Mandatory Professional Statement
1st edition published February 2019
Effective September 2019
- report suspicions
- ML officer
- keep up to date records

33
Q

What is the legislation in relation to Bribery?

A

Bribery Act 2010

Effective 1st July 2011

34
Q

What are the 6 Principles contained within Bribery Act 2010?

A
  1. Proportionality - policies proportionate to nature/scale of firm
  2. Top level commitment - Commitment by management to establish culture
  3. Risk assessment - periodically re-assess a firm’s exposure with growth etc
  4. Due diligence - checks on individuals providing services and potentially exposed to bribes
  5. Communication - anti-bribery policies must be embedded and understood. Training
  6. Monitoring and review - keep procedures up to date
35
Q

What are the 5 offences contained within Bribery Act 2010?

A
  1. Giving a bribe
  2. Taking a bribe
  3. Bribing an official
  4. Bribing a foreign official
  5. Not having systems in place to prevent bribery
36
Q

What is a bribe?

A

Something given in expectation of a change in behaviour

37
Q

What is the RICS guidance relating to conflicts of interest?

A

RICS Professional Statement Conflicts of Interest
1st edition March 2017
Effective January 2018

38
Q

What do you know about the RICS Professional Statement Conflicts of Interest?

A

Obligation - act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with its professional obligations.

  • Effective identification and management of COI

3 Parts:
1. Mandatory rules
2 & 3. Guidance
Appendix 1 - Form for obtaining INFORMED CONSENT

39
Q

What is Due Diligence?

A

The practice of undertaking sufficient fact-checking before proceeding with a transaction/professional service

40
Q

Can you name some of the members of the RICS presidential team?

A

President - Ann Gray (January 2023)
President elect - Tina Paillet (January 2023)
Acting Chief Executive Officer - Richard Collins

41
Q

What is the RICS motto and what is the translation?

A

‘Est Modus in rebus’
There is measure in all things

42
Q

What do you know about the Levitt Review?

A

Alison Levitt QC carried out a review into RICS governance in 2021 following concerns over a financial audit and unfair treatment of 4 non-executive members of the Governing Council.

She made several recommendations which have all been adopted by RICS

43
Q

What do you know about the Bichard Review?

A

The Bichard review was commissioned in December 2021 following a recommendation in the Levitt Review

Examination of purpose, governance and strategy

Review provided 36 recommendations to be implemented in 3 phases
- increased focus on the public interest remit
- simplified accountable governance structure

44
Q

Can you provide an example of where you dealt with a conflict of interest?

A
45
Q

What measures should be taken to try and avoid PII claims?

A
46
Q

What is meant by a Conflict of interest?

A

A situation in which the duty of an RICS member or firm to act in the interests of a client conflicts with a duty owed to another client or party.

Conflict can be party, own interest or confidential information.

47
Q

What is an information barrier?

A

Physical or electronic separation of individuals within the same firm that prevents confidential information passing between them.

48
Q

What is informed consent?

A

Consent given willingly by a party who may be affected by a conflict of interest. The party acknowledges:
- there is a conflict or significant risk of one.
- the facts known by the RICS member/firm that are material to the conflict.
- what the conflict is or may be
- that a conflict may affect the ability of the RICS member/firm to advise or act fully in the interests of a client.

49
Q

What is your firm’s complaints handling procedure?

A

Acknowledgement - 3 working days
Investigation - 15 working days
Senior investigation - 15 working days
Independent review - Ombudsman

RICS APC Valuation Pathway 2023 (13 decks)

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