Ethics Flashcards
What is the ethics document
Rules of conduct 2021 eff. Feb 2022
Why were the rules updated?
(S.C.F.T.U)
Provide simple structure
Clear examples
Focus on respect
Tackling global challenges
And
Understanding evolving technologies
What is rule 1?
Members and firms must be honest, act with integrity and comply to their professional obligations and those to RICS
What is rule 2?
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals that have the relevant experience
What is rule 3?
Members and firms must provide good quality and diligent service
What is rule 4?
Members and firms must treat others with respect and encourage diversity and inclusion
What is rule 5?
Members and firms must act in the publics interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
Example behaviour for rule 1?
Not to mislead others with my actions or omissions
Ensuring when having conversations with clients I provide them with the full picture even if this means admitting a mistake
Do not allow myself to be influenced improperly
I ensure that If I am offered a gift in return for a ‘favor’ I refuse it
Example behaviour for rule 2
Only undertake work that is within my knowledge and skill set
I would not carry out a valuation by myself.
Maintain and develop my knowledge and skills
Ensure I carry regular CPD
Example behaviour rule 3
Understanding clients needs and objectives before accepting any professional work
When obtaining an instruction, I ensure I fully understand the clients requests and should I be unsure I will ask appropriate questions to clear up confusion.
Communicate with clients and others clearly and in a way they can understand
When speaking with tenants, in particularly to independents, I ensure I clearly explain anything complex that they may not understand. For example when discussing break clauses whilst negotiating a new lease.
Example behaviour 4
Respect the rights of others and treat others with courtesy
When visiting my shopping centres I ensure I provide the same level of professionalism, courtesy and friendliness whether I am speaking with clients, centre staff, tenants or customers visiting the centre.
Work co-operatively with others
When working within teams, I understand the importance of having diverse working groups to ensure ideas are coming from people with different views on a situation.
Example behaviour for rule 5
If I ever go to make a public statement on any of my personal social media accounts, I always reflect before posting and ensure that what I am saying will not have a negative impact on me, my professional obligations, on my company and on the RICS.
If I ever receive a complaint, I always ensure I respond to them promptly and should I not be ale to resolve the complaint I would escalate it through the correct channels.
What is a conflict of interest
It arises when a person or companies impartiality is threatened due to the existence between 2 clients
What is an example of a COI you have come across
I work on Telford shopping centre. Savills also manage Merry Hill which is a competing shopping centre. Whilst I was not involved with the on boarding of either centres I know that both clients would have been notified and given my company permission to manage both. Steps in place include, having separate password protected and encrypted folders. Separate people working on each centre. Putting an ethical barrier in place
What is the document for COI
RICS Global Professional Statement on conflicts of interest 2017
What are the four examples of COI
Financial
Personal
Commercial relationships
Acting on both sides of a transaction
What is the difference between conflict avoidance and conflict management
Management - agreed steps put in place
Avoidance - refuse instruction
The statement sets out 3 types of COI what are they?
Party
Own interest
Confidential information
What does the COI statement set out
Firms must keep records to show compliance with the statement
Firms must have effective systems and controls in place
Cannot advise or represent a client where a COI exists unless informed and written consent obtained from all parties
What does RICS bye-laws state on confidentiality
Must maintain client confidentiality for all affairs. Including historic information pre-instruction
Files held for 6 years minimum
Client approval to provide info to 3rd parties unless for police or HMRC
Confidential info received in error to be disposed of securely
What act governs bribery
Countering bribery act 2010
What are the four offences of bribery
Bribing
Receiving a bribe
Failing to prevent a bribe
Bribing a foreign public official
What does the bribery act state for companies
Companies are responsible for corrupt employees unless they can prove otherwise
Must have gifts register
Must have training in place
What is bribery
Giving, offering, promising or receiving of a gift, an advantage that is illegal or breach of trust
Who policies bribery
Serious fraud office
What are the bribery penalties
10 years prison
Unlimited fine
What is money laundering
It’s is the process of disguising illegal funds and converting it into legitimate assets
What governs money laundering
Money laundering, terrorist financing and transfer of funds regulations 2017
And
Proceeds of crime act 2002
What does the AML regulations state
Due diligence checks are to be made
Staff training
Risk assessments
Systems, processes and controls in place to meet regulation requirements
AML checks
What are the AML penalties
Assisting is 14 years prison
Tipping off is 5 years prison
Both unlimited fines
What is the RICS bribery and AML document
Professional statement countering bribery, corruption, money laundering and terrorist financing 2019
What does the RICS bribery and AML document set out
Part 1 - must
Part 2 - guidance
Part 3 - supplementary guidance
RICS PS Bribery and AML What must a firm do
Not accept or offer a bribe
Report suspicions
Comply with law
Carry out checks
Retain records to show compliance
What is the RICS document for complaints
RICS Guidance note for complaints handling 2016
What is the purpose of the ethics rules?
Provide structure for making ethical decisions about how to behave as a professional
- When was the RICS founded
1868
- What is the current governance structure
a. RICS governed under the terms of the of its Royal Charter, internal councils and boards
i. Governing Council – 20 members which runs RICS and provides management and strategic direction
ii. Standards and Regulation Board and Management board report to Governing Council
- What is the Bichard Review
a. It is a full independent review for the purpose, governance and strategy of RICS.
- What is the Role of the RICS?
a. Maintain highest standards of education and training
b. Protect consumers with strict regulation of professional standards
c. Be the leading source of information and independent advice on land, property, construction and associated environmental issues
- What are the benefits of being a RICS member?
a. Status – professional credentials for client confidence
b. Recognition – shows professional excellence to governments and markets
c. Market advantage – RICS status and standards gives competitive advantage
d. Knowledge – Practice standards, professional guidance, CPD & knowledge sharing
e. Network – 125,000 professionals worldwide
- How to register firm with RICS
a. 50% principle must be registered
b. 25% principle optional
c. Provide information such as
i. Type of business and staffing details
ii. Name of responsible principle
iii. Nature of clients
iv. CHP details and records
v. PII details
vi. If handling Client money
- What are the professional obligations for an RICS member?
a. Must comply with CPD requirements
b. Must co-operate with RICS
c. Must provide information requested by standards and regulation board quickly
- What are the professional obligations for an RICS firm?
a. Must have a published CHP including ADR which is approved by RICS and maintain complaints log
b. RICS approved PII for past and future work
c. Must have arrangements in place in case of incapacity, death or inability to work
d. Co-operate with RICS
e. Must provide information requested by standards and regulation board quickly
- How did you carry out a conflict of interest check?
a. I used an internal database and checked the company name along with the client name. In the event of an instruction that is brand new, I would also send an e-mail out to all and allow 7 days for a response.
- Would you proceed with the valuation if there was a conflict?
a. Not without confirming the conflict, in writing with the all parties and receive informed consent.
- How would you manage the conflict?
a. Place an information barrier in place which includes
i. People acting for each side working in different office locations
ii. Separate teams dealing with each instruction
iii. Password protected folders
iv. Ensuring any paper work is locked in a cupboard at the end of each day
- Who is the current RICS president
a. Ann Gray – Jan 23
- Who is the current RICS CEO
a. Justin Young – July 23
- Why do you want to become a member of the RICS?
a. By becoming a member it
i. Instils confidence in clients due to the strict regulations and ethical standards that members and firms have to adhere to
ii. By becoming a member it means I will have access to a large amount of professional standards, statements and guidance to assist me throughout my roll.
- What is PII? And why is it important?
a. Personal Indemnity Insurance
b. It protects the surveyor and the client against negligence claims.
- How would you close down a regulated firm?
a. Inform RICS and client
b. Period of handover
c. Return clients’ money
d. Have run off insurance
e. Keep documents for 6 years
- What are the CPD requirements?
a. 20 hours CPD
b. Submitted no later than 31st Jan
c. At least 50% formal
- Why is CPD important?
a. Keeps your skills and knowledge up to date with legislation, regulations and RICS standards
- Why do you want to be a member of the RICS?
a. The status of the RICS will provide confidence in my clients
b. It is governed meaning there is a lot of learning and reference material which means I can use this to make the best I can be. It is also internationally recognised organisation.
- How to set up own practice with RICS?
a. I would need to register with the RICS by providing
i. Type of business and staffing details
ii. Name of the Responsible Principal
iii. Statutory regulated activities such as financial services
iv. Nature of clients
v. Approved CHP
vi. PII details in line with minimum requirements
vii. Whether the firm holds client money
- How to close down practice?
a. Inform client
b. Inform RICS
c. Return funds to Client
d. Inform PII for future claims and have a run of insurance
- What is RICS doc for handling clients’ money
a. Professional Statement Client Money Handling 2019
- Can you accept cash from a tenant?
a. Max amount you can accept, advise tenant they should pay via bank transfer. Need to notify line manager and head of compliance.
- If there is a COI, can you accept the instruction or say no?
Require Informed consent otherwise you will need to decline the instruction
- Examples of information barrier?
a. Password protection
b. Separate people working on the conflicting schemes
c. Sperate offices for those working on the conflicting schemes
d. Ensuring information is not left on desks
- What are included in terms of engagement?
a. Client details
b. Details of the scheme
c. Surveyor credentials
d. Nature of work
i. If valuation then basis of value, assumptions and special assumptions
e. Any COI
f. Agreed fee and calculation
g. PII
h. CHP
- How do you quote for work?
a. They are market based fees but fees would be dealt with by a director or above
- If client advised another companies fees is lower. What would you do?
a. I would discuss with client, advise why our fee is what is and the scope of works within that fee. If they still want a reduced fee then I see if there are services we could cut to reduce this.
- What is an example of formal CPD?
a. Third party seminar with a clear learning outcome
- Can you accept a gift?
a. Politely decline, if keep persisting, accept, lodge with compliance team, add to gift register and enter it into a raffle.
- What are some examples of the RICS global and professional ethical standards?
a. Professional Standards Service charges in Commercial Property
b. Conflicts of Interest 2017
c. Real Estate Management 2016 and Commercial Property Management 2011 (these are being consolidated with others into 3 standards documents).
d. International Property Measurement Standards
- Talk through the gathering of comparable for Bournemouth?
a. Unable to discuss property or any sensitive information
b. Gathered comps and noted questions to ask
c. If asked advised unable to discuss disclose property details
- What comps were used for the property in Bournemouth?
d. As this was a retail park, the comps used were mostly from recent lettings on the subject property. There was also another retail park in the area, of which had a few recent lettings.
- Talk me through the conflict of interest check?
e. Dynamics
f. Searched the property and the client’s details
g. No conflict arose
h. Prepared terms of engagement
- Where is terms of engagement in Red Book
i. VPS1
- What are the other sections of the red book?
j. Part 1 – intro
k. Part 2 – Glossary
l. Part 3 – Professional Standards
i. PS1 Compliance with standards
ii. PS2 Ethics
m. Part 4 Technical and performance standards
i. VPS1 – Terms of engagement
ii. VPS2 – inspection
iii. VPS3 – Valuation report
iv. VPS4 – Basis of value
v. VPS5 – Valuation approaches and methods
n. Part 5 - VPGA – Valuation applications such as secured lending (VPGA2)
o. Part 6 – IVS
- Describe how you dealt with the discussion of arrears at Telford?
a. Tenant had arrears
b. Mentioned another tenants rent which was lower
c. Advised unable to discuss as unethical
- Describe the break clause situation at Gateshead
d. Requested advise on break clause
e. Referred to lease
f. If unsure seek legal advice
g. Conflict as work for client
- What would you do if someone was being bribed?
a. Speak to a manager and then report to compliance team
What rules does the professional statement for client money handling 2019 set out?
- Separate bank accounts
- Payment of interest is agreed with the client and account kept in credit
- Regular recs at least monthly
- Annual audits
- Accounts clearly labelled – Client money
- Have access on demand
Ethics decision tree key steps
sufficient facts?
is it legal?
In line with code?
consulted appropriate people?
Clear reasoning in reaching decision?
Is decision informed
would you be happy for actions to be made public?
what are the statutory compliance for a new firm?
Disclose business name
Compliance with equality act, bribery act, H&S, Fire Safety
Register for data protection
Inform HMRC for VAT and Tax registration
