Ethics Flashcards
What are the main roles of the RICS
Protect the interests of consumers and businesses through strict regulation of the profession
Maintain the highest standards of education and training in the surveying profession
Be the leading source of information and independent advice on land, property, construction and associated environmental issues.
Act in the public’s interest
What are the benefits of Joining the RICS
1 – Status 2 – Recognition 3 – Market advantage 4 – Knowledge 5 – Network
- What are the rules for firms
Professional Behavior Competence Service Training and CPD Complaints handing Client Money Indemnity Use of designation Advertising Arrangements in the event of incapacity or death Solvency Information to RICS Co-operate with RICS
- What are the rules for members
Ethical behaviour Competence Service CPD Information to RICS Cooperation with RICS
- What is a conflicts in interest
A conflict of interest arises in a situation where there may be an actual, perceived or potential risk that the professional judgement of an RICS-regulated firm or member will be compromised when undertaking an assignment. The most common conflicts that arise include the following:
- A ‘party conflict’ – a situation in which the duty to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.
- An ‘own interest conflict’ – a situation in which the duty to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/firm.
- A ‘confidential information conflict’ – a conflict between the duty of an RICS member to provide material information to one client, and the duty of that RICS member to another client to keep that same information confidential.
- How will you deal with a conflict in interest:
Informed consent
Reject the instruction
Information barrier
- What the required amount of CPD required by a RICS member ?
10 hour formal
10 hour informal
- What are the percentage split on CPD
50% formal
50% informal
- How do you deal with Anti money laundering ?
Ask customer for proof of address and up to date ID
Carry out due diligence on the customer
If an issue is spotted then report this to the Anti money laundry reporting officer to log a suspicious activity report
- What law relates to anti money laundering ?
- Proceeds of Crime Act 2002 (POCA): This is the primary legislation that criminalises money laundering and sets out the framework for confiscating the proceeds of crime.
- Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (amended in 2023): These regulations outline the requirements for businesses to implement anti-money laundering (AML) procedures, including customer due diligence, record-keeping, and reporting suspicious activities.
- Economic Crime (Transparency & Enforcement) Act 2022: Includes measures for a beneficial ownership register of overseas entities owning property in the UK. Strengthens investigation powers regarding unexplained wealth orders (UWOs)
What are the main areas of offence in POCA 2002?
1 Concealing criminal property
2. Involved in arrangements which they suspect facilitates use or control of criminal property on behalf of someone
3. Acquisition use and possession of criminal property
What Red Flags would you look out for?
- Inability or unwillingness of parties to provide identity documents
- Changes of parties involved
- Unusual transaction features i.e. unexpected urgency
- Payment of fees / purchase in unusual currencies
- Cash payments
- What are the penalties of the MLR
Up to 14 years in prison or an unlimited fine for assisting with money laundering
Up to 5 years prison sentence and unlimited fine for tipping off a person
- What do you need to set up an RICS firm
Fill our registration form
Appoint responsible person and complaints handling officer
Indemnity insurance
Approval of Complaints handling procedure and Complaints handling officer
Client money handling procedures (if happens)
Arrangements in the event of incapacity or death
CPD Log & Training plan
Ensure completion of RICS Annual Return end of year
- Who is the president of RICS ?
Tina Paillet (from Jan 24)
Who is the current RICS CEO?
Justin Young (from July 23)
- What are the five principles of better regulation
Proportionality Accountability Consistency Targeting Transparency
- What year was the RICS started
1868
- Your client offers you champagne or money, what would you do?
I declined the cash offer as it was right thing to do both ethically and professionally. Having read my company’s gift handling procedures, I was aware that no amounts of cash were allowed to be accepted and that gifts, that are of a proportionate amount to the work carried out, can be accepted by the company but not by the individual. This is why the gift of champagne was entered into the company raffle.
- What is an acceptable gift ?
In my company a gift up to £250 (No cash) a year is acceptable and only if it is for hospitality or entertainment.
> £50 - sign off by line manager
£250 - sign off form MD
- Why might you not advise your friend ?
Didn’t have professional indemnity insurance
Referred friend to the find a surveyor service
- Why would you not accept a flight?
The gift could have be misconstrued as an advantage which had the potential to induce ones in its official capacity
- Name me some professional standards
RICS Valuation- Global Standards (2020)
Surveying safely 2018
Conflicts of interest 1st edition 2017
Client Money Handling, 1st Edition, 2019
- Name me some Practice Information
Discounted Cash Flow Valuations (November 2023)
RICS Risk, Liability and Insurance 1st Edition (April 2021)
RICS Property Measurement, 2nd Edition 2018
- How many faculties are there in the RICS
17 professional groups
- Please explain the amount of indemnity for the different turnovers
Up to 100k- 250k
£100,001- £200k – 500k
200k+ - £1m
- What are the three levels of disciplinary action
Action by Head of regulations
Disciplinary panel
Appeal Panel
- What actions can the head of regulations impose:
Serve a fixed penalty notice
Make a regulatory compliance order
CPD sanctions
Refer the matter to the disciplinary panel for consideration
- What penalties can the disciplinary panel impose ?
Issue a compliance order
Impose an unlimited fine proportionate to the offence
Impose conditions upon future continued RICS registration
Expulsion from membership or remove firm
Require publication on website and modus
- What actions can the disciplinary panel take ?
- caution
- reprimand
- undertakings as to future conduct
- fines (in accordance with Supplement 2 to the Sanctions Policy: Fines, Costs and Administration Fees)
- conditions on the Member’s continued membership of RICS
- conditions on the Firm’s registration for regulation
- expulsion of the Member from RICS
- removal of the Firm’s registration for regulation.
- What are the levels of members
Fellow of RICS (FRICS)
Member of RICS (MRICS)
Associate Member of RICS (AssocRICS)
Student Member
- How do you become a Fellow of the RICS
Here are three core principles at the heart of being an RICS Fellow:
* acting to further RICS and the profession
* acting for the benefit of a third party to reflect RICS’ public interest mandate
* promoting RICS objectives and the profession.
Provide the following for the Fellowship Assessor to Consider:
- Evidence of achievement of 4 fellowship characteristics i.e. 5+yrs as MRICS, a leadership role, academic achievement or raising the profile of RICS
- A portfolio of professional achievement to support the application to include in CPD record
- What is informed consent
Consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm or member
- Why do you want to become a member of RICS ?
- Recognition
- Uphold professional standards
- Better employment prospects
- Be part of the global network
1 – Status
2 – Recognition
3 – Market advantage
4 – Knowledge
5 – Network
- What due diligence on a publicly listed company ?
Check London Stock Exchange Listing
- What does being chartered mean ?
Chartered professional is a person who has gained a specific level of skill or competence in a particular field of work, which has been recognised by the award of a formal credential by a relevant professional organisation.
- How do you treat other with respect ?
I treat everyone with courtesy, politeness and understand/ consider cultural sensitivities
- How do you act with integrity
I am straightforward in all that I do
- How do you take responsibility
I am always accountable for my actions
- How do you provide a high standards of service ?
I give my clients the best possible advice
- How do you promote trust in the profession?
Acting responsibly in my professional and personal life.
- What is the purpose for the rules of conduct for members/firms?
The Rules provide a strong foundation for RICS, its professionals, and the firms it regulates, helping to protect the public and uphold the reputation of the profession.
The Rules of Conduct demonstrate to clients, consumers and the public the high professional standards that RICS professionals and firms work to. Being able to show that you are a qualified RICS professional or that your firm is regulated by RICS provides independent external confidence.
The Rules of Conduct for Members are mandatory for all RICS professionals, students and trainees regardless of their geographic location and sector of practice.
Rules of Conduct for Firms are mandatory for all RICS regulated firms.
- What is money laundering?
Is the process of making illegally-gained proceeds (i.e., “dirty money”) appear legal
- What is an anti-money laundering check?
is an identity assessment to ensure all purchasers etc are who they claim to be, and are not investing on behalf of somebody else.
- If you suspected a client of money laundering, what would you do?
Notify the Money laundry Monitoring officer within my organisation
- What are the money laundering offences?
Accepting
Offering
Failing to report
- Who polices money laundering regulations?
HMRC & the Financial Conduct Authority (FCA)
- What legislation governs the receiving of gifts/hospitality in exchange for services?
Bribery Act 2010
- What are the key principles of the Bribery Act?
Proportionality - The action taken should be proportionate to the risk and the size of the organisation.
Top level commitment - Those in senior positions are best placed to ensure the organisation conducts business without bribery.
Risk Assessment - Many organisations will have little or no risk of bribery but a risk assessment will show the nature or extent of exposure to bribery.
Due Diligence - This is about having a risk based approach to business relationships - with those you deal with or who provide services for you.
Communication - Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help raise awareness, and this would be proportionate to the size and type of organisation.
Monitoring and Review - Risks to your organisation may change, over time you may want to carry out regular reviews and re-assessments.
- Who polices the Bribery Act?
Serious Fraud Office
- What are the penalties of breaching the Bribery Act?
Up to 10 years in prison and an unlimited fine.
- Did you physically register the gift and hospitality yourself?
Yes, all gifts received must be entered into the gifts register
- Why wouldn’t you have been able to advise your friend?
Not qualified, and even if you were your advice wouldn’t be covered by PII so you wouldn’t be able to advise
- Could you have directed your friend to a building surveyor in your business or elsewhere?
As I do not work for a surveying firm, directed my friend towards a local surveyor
- Why would a trip away be against RICS Rules of Conduct?
It does not promote integrity if this was accepted and did not promote trust in the profession
- A client offers tickets for Twickenham, what would be your response ?
Depends on whether it is furthering a working relationship or it is being offered in a time whether tendering in being undertaken. My default position would be to decline if I felt it compromises my ability to make an informed decision without compulsion.
- What is your general view on providing gifts and hospitality?
Nothing wrong providing it is proportionate, within the agreed limits as per my company’s gift and hospitality policy and that all gifts received are inputted into my company’s gift register.
- How do you have regards for the rules for members
Integrity - I avoid conflicts of interest and act with integrity, remaining honest and transparent in all that I do.
Competence- I carry out my work with due skill and care and in line with technical standards.
DD & Quality Service- I provide a good professional service to my internal clients and assist where necessary.
D&I & Respect - I treat everyone with courtesy, politeness and understand/ consider cultural sensitivities
Public interest / prevent harm - I always act to protect the public interest and act responsibly inside and outside of work.
CPD- I have carried out the required amount CPD
- How have you managed a conflicts of interest ?
I noticed a conflict by a consultant and asked that they provide a letter confirming how they will deal with that conflict and provide an information barrier.
- What is the fine for the late submission of CPD
First time a Fixed Penalty caution
Second time- £150 and published on the website
Third breach- Disciplinary panel may result in expulsion
- What legislation would you have to have regard for when setting up your own company ?
Companies Act 2006
Equality Act 2010
Bribery Act 2010
Money Laundering regulation 2017
Health and Safety Act 1974
GDPR & Data Protection Act 2018
Inform HMRC & Tax Registration (Threshold is currently £85k turnover)
Insurance cover
When was the new Professional indemnity insurance requirements effective
V.10 July 2024
What were the updates?
Separate guidance for the UK following Brexit.
Fire Safety Coverage (UK and Ireland): From 1 July 2024, RICS requires listed insurers to provide professional indemnity insurance (PII) for fire safety claims related to buildings of 5 storeys and above, based on:
- Negligent act, error, or omission (not full civil liability).
- Coverage for services performed on or after 1 July 2024 (no liability for work before this date).
- Coverage can be in aggregate, with defence costs included in the indemnity limit and subject to the uninsured excess.
- While the original proposal focused on buildings 11-18 meters in height, this has been extended to buildings over 18 meters for clarity on ‘metres’ and ‘storeys.’
EWS and FRAEW Coverage (UK only): RICS will require listed insurers to cover EWS, EWS1 Forms, and FRAEW for buildings up to 18 meters in height (including ground level, excluding basements/mezzanines). The coverage is based on:
- Negligent act, error, or omission.
- Work completed on or after 1 July 2024, with no historic liability unless insurers have chosen to provide such cover.
- Aggregate coverage, including defence costs within the indemnity limit and subject to the uninsured excess.
Removed the cyber clause they introduced in 2021 - insurers to use IUA 04 017
Professional Indemnity Cyber and Data Protection Law Endorsement.
What is the level on uninsured excess ?
Indemnity limit of £10m or less = The greater of 2.5% of the sum insured, or £10,000
Over £10m = No set limit
What is retroactive insurance
Retroactive insurance is a type of insurance coverage that protects against events or losses that happened before the insurance policy was actually purchased. It’s like buying a policy today that covers something that already occurred in the past. This is often used when someone realizes they need protection for a risk that has already occurred but wasn’t previously covered. However, the insurer usually assesses the circumstances carefully before offering this type of policy.
The RICS minimum policy wording allows for a retroactive date of 1 July 2024 (or later) for Fire Safety
Claims relating to work on buildings Five Storeys and above and EWS / FRAEW Claims
What Practice information relates to PII?
RICS Practice Information - Risk, Liability and Insurance, 2021:
- Recommends the use of liability caps to manage risks associated with profesional work
- Be aware of third-party reliance and make it clear that advice can only be relied upon by the client named in their terms of engagement
Do you need to cover past and current employees
Yes
How long do you need to have run off cover
The requirement is for a limit of £1,000,000 in all for a period of six years from the expiry date of the policy in force at the time of cessation. RICS’ minimum policy wording will automatically provide this coverage.
- For consumer claims: min. £1m aggregate cover for 6 years
- Commercial claims: Firms must consider adequate and appropriate for 6 years
Are there any RICS help with cover?
RICs Member Support Service (MMS) for members facing claims for work carried out by an employer who has gone into administration.
If you can’t get run off cover, what options do you have
RICS Run off pool
What much registered RICS firm display ?
Regulated by RICS
Can members use the RICS Logo
Yes, on personal website, business cards and email signatures.
What is the benefits of being regulated by RICS
It shows that your firm:
Practises to globally recognised standards.
Behaves ethically and acts with integrity and honesty.
Has the required skills and competencies to do the job.
Manages conflicts of interests transparently.
Safeguards the security of client money.
Manages its finances appropriately.
Provides adequate and appropriate indemnity for your work.
Handles complaints and disputes fairly.
What do you need to register a firm for regulation ?
Name of firm Nature of firm's work Office details Responsible Principals details Contact officer Professional indemnity insurance Complaints handling procedure A Firm that is registered or registering with RICS must at all times have a Responsible Principal. Use of designations once approved
When was the rules for registration of firms effective ?
2nd Feb 2022
When do firms need to register for regulation ?
A Firm is required to register for regulation by RICS if:
a the Firm provides surveying services to the public;
b the Firm is operating in Regulated Area A;
c at least 50% of the Firm’s Principals are RICS Members
A Firm is eligible to register for regulation by RICS if:
a the Firm provides surveying services to the public; and
b at least 25% of the Firm’s Principals are RICS Member
Where is the regulated A area ?
United Kingdom
What are the key principles of the client money professional statement
Client money is kept safe
Used for appropriate purposes
Controls/ procedures to deal with client money
When was the Client money professional statement effective
1st Jan 2020
