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APC Eleanor + SOE > Ethics > Flashcards

Ethics Flashcards

1
Q

Why were the rules of conduct updated?

A

Update from the old rules and global ethics principles.

An increase focus on diversity and inclusion as well as new technologies

To provide a simple and clear structure

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2
Q

What are your obligations as an RICS member?

A
  1. comply with the CPD requirements
  2. cooperate with RICS
  3. Provide all information reasonably required by the standards and regulation board
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3
Q

What are the firms obligations to the RICS?

A
  1. Publish a complaints handling procedure
  2. ensure all work has appropriate PII cover
  3. Cooperate with the RICS
  4. Provide all information reasonably required by the standards and regulation board
  5. display on their business literature a designation that they are RICS regulated
  6. Report to RICS any matter that they are required to report under the rules of registration
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4
Q

What is bribery?

A

A gift or incentive which impairs professional judgement

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5
Q

what are the offences in the bribery act?

A
  1. Bribery
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
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6
Q

What are the benefits of being an RICS member

A
  1. status
  2. knowledge
  3. network
  4. recognition
  5. market advantage
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7
Q

What are the benefits of being an RICS regulated firm?

A
  1. Confidence - firms are regulated
  2. Security - complaints handling / PII cover
  3. Professionalism
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8
Q

What are the three types of conflict?

A
  1. a party conflict - work on the same or related instruction
  2. Own interest conflict - personal interest
  3. Confidential information Conflict - work between two parties that is confidential
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9
Q

What are the 5 rules of conduct?

A
  1. Be honest, act with integrity and comply with personal obligations and RICS obligations
  2. Maintain professional competency
  3. provide good-quality and dilligent service
  4. treat others with respect and encourage diversity and inclusion
  5. act in the public interest and maintain public confidence in the profession
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10
Q

What is the role of the RICS?

A
  1. to maintain the highest standards of education and training
  2. to protect consumers through strict regulation of professional standards
  3. be the leading source of information an independent advice on land, property, and associated environmental issues.
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11
Q

What is the current governance structure of the RICS?

A

Governed under the terms of its royal charter, by various internal councils, boards and associations.

The governing council has 21 members and runs the RICS, providing management and strategic direction.

Current CEO - Richard Collins

Current president - Ann Gray, this position chairs the governing council

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12
Q

When was the RICS founded and when did it receive the royal charter?

A

1868

1881

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13
Q

What was the purpose of the Bichard review?

A

Following an independent review by Alison Levitt, the RICS commissioned Lord Bichard to undertake a further review to;

clarify the purpose of the RICS, including its responsibility to act for the public advantage.
Make recommendations on its governing structure to deliver that purpose

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14
Q

What recommendations did Bichard make?

A
  1. A renewed focus on the public interest remit, including creating a public interest panel to advise the governing council.
  2. Maintaining self-regulation through greater independence for regulatory functions
  3. Increased focus on diversity and inclusion
  4. Empowering members with greater support for regional boards and a renewed focus on younger members
  5. An independent review of the RICS governance and effectivness at delivering against its charter once every 5 years
  6. A new simplified, clear, accountable governance structure
  7. Showing greater leadership on sustainability and climate change
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15
Q

What information is required in an annual return?

A
  1. Type of business and staffing details
  2. Name of responsible principle
  3. Statutory regulated activities
  4. Nature of clients
  5. Complaints handling procedure details and records
  6. PII details
  7. Whether the firm holds client money
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16
Q

What is the purpose of the RICS Ethics decision tree?

A

Provides a framework of questions that members should ask themselves when facing a situation in which they’re asked to act in a potentially unethical manor.

It encourages considering the legality of ones actions and their consistency with the Rules of Conduct.

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17
Q

When would a disciplinary procedure be triggered?

A

By someone complaining to the RICS, an allegation by a client or third party or because of information received or established by the RICS.

E.g. Failing to meet CPD requirements

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18
Q

What are the three levels of disciplinary action?

A
  1. Action by Head of Regulation
  2. Disciplinary Panel
  3. Appeal Panel
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19
Q

What are the 4 actions the RICS head of regulation could take if disciplinary action is required?

A
  1. Serve a fixed penalty notice
  2. Make a regulatory compliance order
  3. Refer the matter to a single member of the regulatory tribunal for consideration
  4. Refer the matter directly to Disciplinary panel
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20
Q

What is the RICS guidance on use of social media?

A

Use of social media: Guidance for RICS members, 2021

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21
Q

What are the RICS Core materials?

A

International Stanadards
Red Book, Global
International measurement standards

Professional statements
conflicts of interest, global 2021
service charges in commercial property, 2018
RICS Property measurement, 2018
Client money handling, 2019

Guidance notes
Surveying safely, 2018
Contamination, the environment and sustainability, 2010
comparable evidence in commercial valuations, 2019

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22
Q

How should fee negotiations be conducted?

A

With honesty and transparency
Should be market level and agreed on an ad-hoc basis
avoid price fixing
should not be seen to be undercutting another firm
Ensure you can provide a diligent service for the fee basis

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23
Q

What are the requirements of terms of engagement?

A

Should be agreed in writing before starting work on an instruction
Should state the clients agreement to the proposed fee basis and conformation that the complaints handling procedure is available.
Must acknowledge the surveyor is competent and that there are no conflicts of interest

24
Q

When would it be appropriate to decline an instruction?

A
  1. When the client will not sign the terms of engagement
  2. When the PII cover level cannot be agreed
  3. If you are not competent to complete the work
  4. If there is a conflict that cannot be managed
  5. If the proposed client is on the UK Government sanctions list
  6. If you would not feel comfortable with your actions being made public
  7. You do not have sufficient facts on the situation
  8. The work is pro-bono or for a friend and would not be covered by your PII
25
Q

What is the difference between conflict avoidance and conflict management?

A

Conflict avoidance - Declining an instruction
Conflict management - Managing a conflict by putting an information or ethical barrier in place and seeking informed consent from affected parties

26
Q

What is informed consent?

A

This can only be given in writing if the person explaining the position is entirely transparent about any material factors and sure that the affected parties fully understand the situation. Surveyors should only seek informed consent if they are satisfied that this will serve both parties best

27
Q

How would you handle a conflict?

A

When a conflict arises, I would decide if I should adopt conflict avoidance by declining the instruction or manage the conflict.
If I decide to manage the conflict, I would set up information barriers and ensure the affected parties provided informed consent

28
Q

What is confidentiality?

A

The RICS bye laws state ‘client confidentiality must be maintained for all client affairs’. If a third party wants access to your files you must get your clients approval unless you are subject to a statutory duty overriding the clients confidentiality rights such as a police investigation or HMRC investigation

29
Q

How long should files be held

A

minimum of 6 years
should be destroyed securely

30
Q

What would you do if you overhear confidentail information?

A

I would notify he client and sender of the error and record this with my firms compliance officer.
I would not use the information for my own purposes
The material should be disposed of securely

31
Q

Talk me through your firms complaints handling procedure

A

Stage 1 - Business unit head (3 days and 10 days)
Stage 2 - Managing partner (10 days)
Stage 3 - Third party resolution - property ombudsman / business arbitration

32
Q

What is the RICS guidance for complaints handling?

A

RICS guidance note on complaints handling, 2016

33
Q

What does this document say? (complaints handling GN)

A

A firms complaints handling procedure must be approved by RICS, details must be issued to clients with terms of engagement
Complaints must be logged to show details, progress and outcomes
Must include RICS approved ADR mechanism

34
Q

What are members CPD requirements?

A

Minimum 20 hours (10 hours must be formal)

35
Q

What is formal CPD?

A

Structured learning where there are clear learning objectives and outcomes

36
Q

What is informal CPD?

A

Self-managed learning, includes private study or on the job training

37
Q

What is professional indemnity insurance?

A

Mandatory for surveyors working in practice.
It is used to protect clients, surveyors and third parties against negligence claims when there is a duty of care that has been breached and a claim for damages arises.

38
Q

What are the current minimum requirements for PII?

A

Based on the turnover of the firm;
£100,000 or less is £250,000
£100,001 - £200,000 is £500,000
£200,001 is £1,000,000

39
Q

What are the RICS requirements for PII?

A

Must be underwritten by a RICS approved insurer
All members must ensure there is appropriate level of insurance for each instruction
Should work on a claims made basis
Be sent to the RICS in the annual return
Early notification to the insurer of a potential claim

40
Q

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

A

When a duty of care is breached and there is a loss or claim for damages is made

41
Q

How do you avoid negligence?

A

Clearly understand clients objectives and confirm precis instructions in the terms of engagement
Ensure you are competent to undertake the work
Undertake work in accordance with the relevant RICS standards and Guidance notes
Make detailed file notes and take photographs

42
Q

What is good practice when handling client money?

A

Client money should be held in a separate bank account and clearly labelled as client
The RICS firm must have exclusive control
Must be managed by an FCA bank
Do not hold office money in client account unless it is a receipt of mixed funds, where office money is awaiting transfer
Ensure money is immediately available

43
Q

What is the RICS compliance for starting a new practice?

A

Inform RICS of your new practice
Appoint a responsible principle
Register with RICS for regulation
Arrange PII and send details to RICS
Set up procedures for client money handling
Obtain RICS approval for complaints handling procedure
Set up a complaints log
Appoint complaints handling officer
Use a logo kit from the RICS for professional material
Ensure completion of the annual return

44
Q

What is the RICS compliance for closing a practice?

A

Inform RICS of the closure
Ensure clients are informed at the earliest opportunity and hand over arrangements
Return any monies held by clients to their own accounts
Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of he policy in force at the time of cessation
Retain a copy of client files and records or a minimum of 6 years

45
Q

What are the principles under the bribery act?

A

Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review

46
Q

What is money laundering?

A

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

47
Q

What are the levels of due diligence checks?

A

Customer - use a reliable independent source like a passport, make reasonable endeavors to identify beneficial owners
Enhanced - Required for high risk clients, PEPs. More detailed examination of their background and purpose of transaction.

48
Q

What are the key requirements of the money laundering, terrorist financing and transfer of funds regulations, 2017?

A

For bribery and corruption RICS regulated firms must;
not offer or accept anything that constitutes a bribe
report suspicion to the relevant authority
act with due diligence
retain records

For money laundering and terrorist financing;
Not facilitate or be complicit in ML and TF
Have systems to comply with the law
Report suspicion
Verify client by taking ID checks
Retain records

49
Q

What are the penalties for breach of money laundering?

A

Max 14 years prison and or unlimited fine for assisting with money laundering

Max 5 years prison and or unlimited fine for tipping off

50
Q

How do you conduct customer due diligence checks?

A

Identify the client using a passport / driving licence
Make reasonable endeavors to identify the beneficial owners
For a company; name, company number, registered address
Name of directors is required unless company is on LSE
Obtain information on the purpose and intended nature of the business relationship and proposed funding arrangements as appropriate

51
Q

What are red flags for money-laundering concerns?

A

Changes to parties involved in the transaction
Unusual transaction features such as unexpected urgency around the transaction, potential loss making
Payment of fees in an unusual currency

52
Q

What are the three main offences under the proceeds of crime act, 2002?

A

Concealing criminal property
Arrangements - a person becomes concerned in an arrangement which they know or suspects the acquisition, retention, use or control of criminal property on behalf of another person
Acquisition, use and possession of criminal property

53
Q

What is dual agency?

A

When the same agent is working for both parties

54
Q

What types of business can be regulated?

A

Corporate body
PLC
LLP
Sole Practitioner

55
Q

What do PII requirements outline?

A

Policy should work on a claims made basis
Certificate sent to RICS in an annual return
Early notification to firms insurers when a potential claim arises
Adequate run-off cover is required at closure of trading for 6 years

56
Q

What action has the RICS taken to implement the recommendations of the Bichard review?

A

The management structure is being changed with two new boards being set up, the standards and regulations board and the management board
RICS has recruited a DEI and sustainability panel chairs to lead these issues
Package of support issued to promote and drive member engagement such as free CPD and networking

APC Eleanor + SOE (14 decks)

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