Ethics Flashcards
RICS Global Professional & Ethical Standards (2015)
- S – Standard of Service
- T – Promote Trust in the profession
- I – Act with Integrity
- R – Take Responsibility
- R – Treat others with Respect
STIRR
Principles for better regulation
- P – Proportionality
- A – Accountability
- C – Consistency
- T – Targeting
- T – Transparency
PACTT
RICS Rules of Conduct for Members 2020 (Regulation)
- Interpretation of a member
- Communication
- Ethical Behaviour
- Competence
- Service
- CPD – minimum 20hrs p.a (1/2 formal)
- Solvency
- Information to RICS
- Co-operation
MemCom EthiCom SCS Info Coop
RICS Rules of Conduct for Firms 2020 (Regulation)
- Definition of a firm –surveying service to the public
- Communication
- Professional behaviour
- Competence
- Service
- Training staff & CPD
- Complaints handling procedure
- Clients’ money
- Indemnity
- Advertising
- Solvency
- Arrangement to cover incapacity or death as sole practitioner
- Use of Designation – “RICS regulated”
- Information to RICS
- Co-operation
RICS Rules of Conduct 2021
Rule 1: members/firms must be honest, act with integrity and comply with their professional obligations.
Rule 2: members/firms must maintain professional competence.
Rule 3: members/firms must provide good quality and diligent service.
Rule 4: members/firms must treat others with respect and encourage diversity and inclusion.
Rule 5: members/firms must act within public interest.
International Ethics Standards (2016)
- Started International Ethical Standards Coalition (IESC). RICS is a lead member. Instilled 10 ethical principles;
o Accountability
o Confidentiality
o Conflict of Interest
o Financial responsibility
o Integrity
o Lawfulness
o Reflection
o Standard of Service
o Transparency
o Trust
Professional Indemnity Insurance (PII) cover rules
PII protects members against negligence claims
Firm Turnover / Cover needed per negligence claim
Less than £100,000 £250,000 cover
£100,000 to £200,000 £500,000 cover
More than £200,000 £1,000,000 cover
Excess Caps
Liability up to £500,000 Greater of 2.5% of sum insured / £10,000
Liability above £500,000 2.5% of the sum insured
Handling Client’s Money
Key factors include;
1. Keep accounts separate / identifiable
2. Clients must be able to have the money on demand
3. Agree interest payment procedures
4. Keep accurate record
Usually need to notify your PII insurer of any complaints
RICS Client Money Handling, UK 2019 (Professional Statement)
Complaints Handling
- Firms need a complains handling procedure (CHP)
- Must have a compliance officer
- Must include a redress system – needs to be free of charge to consumer
- Sole traders can’t deal with complaints themselves
CBRE
* Acknowledge within 5 days. Investigated within 20
* Compliance officer: Geraldine Mash
* Centre for Effective Dispute Resolution (CEDR)
RICS Complaint Handling Procedure 2011 (Regulation)
Bribery
Governed by the Bribery Act 2010. Bribe is giving or receiving a payment or gift for an illegal action or breach of trust. Offence;
1. Bribing
2. Receiving a Bribe
3. Bribing a foreign public official
4. Failing to prevent a bribe / Not having a system in place to prevent a bribe
Bribery
6 principles in the Bribery Act:
1. Due Diligence
2. Risk assessment
3. Proportionality
4. Commitment from top level
5. Communications
6. Monitoring and Review
DR PCCM
Policed by the Serious Fraud Office. Up to 10 years in prison and/or unlimited fine
CBRE
* No cash or equivalent (gift card). Gifts only up to £100, but must be declared
Money Laundering
Reports to the National Crime Agency
* Conduction risk assessment
* Implement systems, policies and controls to address risks
* Provide staff training
* Needs to be a MLRO Officer in company
* DD checks on all clients
* Enhanced Due Diligence on Politically Exposed Persons (PEPs)
* Can’t accept payments over 10,000 Euros
* Maintain 5 years of records
* AML checks must be taken to confirm the identity of the proposed purchaser of the property, the source of funds. This needs to be done by the vendor’s agent before contracts are exchanged
Up to 14 years in prison for assisting and 5 years for tipping them off
When was the RICS founded?
1868
What is the role of the RICS?
3 main roles:
- Maintain highest standards of education and training
- Protect consumers through strict regulation of professional standards
- Leading source of info and independent advice on land, property, construction etc
What are the benefits of RICS regulation for a firm? (CBS)
- Confidence = that firm is monitored by RICS
- Professionalism = must provide clear advice
- Security = firms must have recognised CHP & PII cover
Provides clients with ‘gold standard’ of good practice
What are the 5 rules of conduct?
- M+F must be honest and act with integrity
- M+F must maintain professional competency
- M+F must provide good-quality and diligent service
- M+F must treat others with respect and promote D+I
- M+F must act in the public interest
What are the Principles of RICS Regulation for Members and Firms?
Provides a framework for members and firms to best meet requirements for Rules of Conduct. There are 5 principles of better regulation embedded in the Rules – PACTT
Proportionality; Accountability; Consistency; Targeting; Transparency
What happens if a member deviates from the Ethical Standards?
May lead to RICS disciplinary action
Talk me through RICS disciplinary procedures
- RICS self-regulates its members
- Rules of Conduct state not every shortcoming will necessarily result in disciplinary proceedings. However, failure to follow any RICS guidance will be considered when examining behaviour of a firm.
Can be triggered by someone complaining to RICS
What are the levels of disciplinary action?
- Action by Head of Regulation
- Regulatory Tribunal
- Appeal Panel
What are the most common firm breaches?
- Professional Behaviour
- CPD
- Client’s Money
What are the stages of a disciplinary investigation?
First step formal investigation by Head of Regulation.
Head of Regulation can initiate one of the following 4 actions if they determine disciplinary action is required:
o Service fixed penalty notice (used for breaches re Information to the RICS)
o Make a consent order (low level breaches)
o CPD sanctions
o Refer matter to Disciplinary Panel (for more serious breaches of conduct. Consider whether hearing is required. 50% of this panel are lay members – not RICS)
What are the penalties available to Disciplinary Panel?
- Issue a consent order (as above – lays out terms for which a firm must take / desist actions)
- Impose unlimited fine per breach but must be proportional to offence
- Impose conditions upon future registration with RICS
- Expulsion from membership (recent hearing Oct 19 – Mr Martin Nicholson. 10 charges in breach of Rule 3 of Rules of Conduct Members 2007 (Ethical behaviour) 9 charges proved in full, 1 in part. Relating to concealing purchase order funds and forging signatures. Was expelled from membership)
- Require publication of results of hearing in RICS Modus magazine, online and local newspaper
What is the role of the Appeal Panel?
Considers member’s/firm’s appeal against a decision relating to disciplinary action. They review decision made with regard to evidence previously presented and any new representations. Can allow the appeal and vary penalty previously imposed. 50% of panel are lay members.
