Ethics Flashcards
What is the role of the RICS?
To maintain the highest standard of training
To protect consumers through strict regulation of professional standards
To be the leading source of information on land property construction and associated environmental issues
What are the five rules of conduct?
Be honest, act with integrity.
Maintain their professional competency.
Provide a good and diligent service.
Treat others with respect and encourage. diversity and inclusion.
Act in the public interest.
What is the RICS’ view on bribery?
Shouldn’t partake in a bribe unless danger to life.
What is considered a bribe?
Giving or receiving of a financial or other advantage.
What are the six principles of the Bribery Act?
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitor and review
Offences of bribery
Giving a bribe
Receiving a bribe
Failing to prevent a bribe.
Bribing a foreign public official
Bribery penalties
10 years maximum prison sentence and or unlimited fine.
Companies (Unlimited fine)
What should you reference if you get offered a gift, cash or hospitality?
Reference:
Bribery Act 2010
RICS Professional Standard
Organisations procedures
Professional objectivity, openness, transparency
Proportionality
Tax implications
Sanctions
Employment contract
What is the professional standard relating to bribery and AML?
RICS Professional Standard: Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019
What is the structure of this?
P1 Bribery and Corruption (B&C)
Money Laundering and Terrorist financing (ML & TF)
P2 Guidance
P3 Supplementary guidance
What is a conflict of interest?
When a member’s independence is threatened due to the existence of a conflict between two clients
What is the purpose of undertaking a COI check?
To ensure there is no conflict.
What are the three types of conflict?
Party conflict – work on same instruction for two different parties.
Own Interest conflict – personal interest
Confidential Information Conflict – work between two parties that is confidential.
What is the difference between conflict avoidance and conflict management?
Conflict avoidance = don’t accept instruction.
Conflict management = instruction accepted; steps taken to manage the conflict with written agreement from all parties.
What would you do if you came across a conflict?
Understand nature of conflict.
Inform client of conflict and either don’t accept instruction or how the conflict can be managed.
Only proceed on instruction if informed consent from client in writing.
Conflict must be managed in accordance with professional standard
How do you undertake a conflict of interest check?
Internal system, put postcode and client name in. Flags if there is a conflict.
Why is CPD important?
Keep up to date with market knowledge.
Educational, understanding changing processes in the RICS.
How long do you store AML information on individuals?
Up to 5 years.
If you find an AML discrepancy, what do you do?
Report to companies house.
What are CPD requirements?
20 hours, 10 formal.
Maintain relevant and current understanding of RICS RoC on 3 year rolling basis.
Log all CPD on RICS CPD management system by 31st January each year.
What are the main changes from the previous Rules of Conduct?
Changed from separate rules for firms and members to a single set.
How do you define claimes made?
PII works on this basis.
Policy covers claims made in that period regardless of when negligent act occurred.
Why were the rules updated?
Simpler structure.
Clear examples.
Include diversity and inclusion.
Understand evolving technologies.
Tackle global challenges.
To whom do you owe a duty of care?
public and client
What is the procedure for setting up an RICS regulated firm (Statutory procedures)?
Disclose business name, inform HMRC, comply with Bribery Act, Equality act, H&S compliant, fire safety compliant.
set up public and employee liability insurance
What is the procedure should you wish to close the firm?
Inform client, RICS, insurer.
Return client monies.
Set up ‘run-off’ cover.
Hold accounts and client info for 6 years.
What is PII and what level of PII is required for your firm?
Professional Indemnity Insurance to protect both yourself, the client and third parties against negligence claims.
Turnover 0-100k = £250k, 100-200k- 500k, 200+ = £1m.
What are the RICS PII requirements?
All members must ensure have appropriate level of insurance in place.
What is a Locum?
Person who temporarily covers the duties of a surveyor or firm member who cannot work.
What is the maximum level of uninsured excess required by the RICS?
Turnover less than £10m = greater of £10k or 2.5% of sum
Turnover greater than £10m = no set limit.
What is the difference between PII cover and limitation of liability?
Your PII cover is the total liability cover, where as a limitation of liability can be agreed with the client on a lower basis.
What is run off cover and how much do you need?
Insurance set up for after closing a practice for 6 years.
Need minimum cover of £1m.
What is negligence?
Failure to provide duty of care to client or third parties, there is loss and a claim for damages arises.
If you are in a social setting and someone asks you for some advice on a piece of land they are selling what do you do?
Explain that you would be unable to give advice. However, can schedule a call within working hours to discuss this.
What is the key legislation regarding gifts? What else would you consider?
Bribery Act 2010.
What is your company’s gift policy?
We do not accept gifts
What legislation leads ML And Bribery practices?
Terrorist Financing and Transfer of Funds Regulations, 2017.
Bribery Act 2010
What is money laundering?
The process of ‘cleansing’ illegally obtained money through investing in legitimate assets.
What are the key provisions of the AML regulations?
Have a written money laundering and terrorist financing risk assessment.
Implement policies and systems to address ML and TF.
Provide staff training.
Comply with new customer, enhance and simplified DD requirements.
What are the different levels of due diligence checks?
Customer Due diligence and enhanced due diligence
What are the penalties for non-compliance of AML?
14 years prison unlimited fine for assisting in money laundering.
5 years for failing to report / tipping off
What are some examples of red flags?
Unable to present ID
Paying in cash
Changing personnel
Wanting to make a deal happen quickly
Multiple transactions under £10k.
What are the three parts of the RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing?
Mandatory requirements
Guidance for good practice
Supplementary guidance on some concepts set out in parts 1 and 2
What do you do if receive bribe?
- Don’t accept bribe
- Alert supervisor
Who polices the Bribery Act?
Serious Fraud Office
Benefits of being RICS regulated firm
Confidence
Professionalism
Security
RICS Future Foundation
Vision
mission
values
strategic goals
world class organisation
what is a conflict of interest
when a firm or member’s independance and impartiality is threatened due to a conflict between two parties.
6 main areas of good practice
holding clients money
providing information to clients
receipts of clients money
payments from clients account
accounting records and controls
compliance
How should complaints handling procedures be handled?
Complaints should be written and sent to the business, to be acknowledged within 7 days and replied to within 28 days.
What is the Hierarchy of the RICS?
RICS President
RICS Vice president elect
RICS Senior vice president
What the procedure for handling clients money.
What review was reported in 2022
The Bichard Review
What are the RICS future foundations
Vision
Mission
Strategic Goals
Values
World class organisation
Name 5 benefits of being an RICS member
Status
Recognition
Market advantage
Knowledge
Network
How often do you undertake Ethics training?
3 years
What due diligence do you undertake?
Client due diligence
What information is required by the RICS for registration?
type of business
name of responsible principal
statutory regulated activities
Nature of clients
Complaints Handling Procedure
PII details
Does firm hold client money?
Mandatory requirements for RICS members?
Comply with CPD requirements
Cooperate with RICS
Provide requested information by standards board
What are the RICS requirements for starting a new business?
Inform and register RICS
Appoint responsible principle
Arrange PII and send to RICS
Set up client money handling procedures including protection scheme
Set up CHP + Complaints log
Appoint CH officer
Logo Kit
Plan for succession
Ensure CPD log
Ensure completion of online RICS Annual return
What are the statutory requirements for starting a new business?
Required to disclose business name
Disability discrimination compliance (Equality Act 2010)
Financial services compliance (FS + Markets act 2000, FS Act 2012)
Bribery act 2010 compliance
Appoint AML officer (ML regulations 2017)
Health and Safety compliance (H+S Act 1974)
Control of Asbestos Regulations 2012 compliance
Fire safety act 2021 compliance
Register for data protection (GDPR + Data protection act 2018)
Estate Agency compliance (Estate Act 1979), (Misrepresentation Act 1967), Consumer Regulations Act 2008)
Inform HMRC for VAT + Tax registration
Ensure compliance with employment law
Ensure insurance compliance for employer and public liability.
How does a firm close their practice?
Inform RICS of closure
Inform clients and hand arrangements to new firm
Return Client monies
Inform insurers
Retain copy of files for 6 years minimum
What is the decision tree?
framework of questions which members should ask themselves when facing a situation which could result in an unethical manner
Why do the RICS regulate the surveying profession?
Protect the public
Promote confidence
Uphold prof standards
Who undertakes the regulation?
Standards and regulation board
What are the procedures for breaches?
Disciplinary action
What are the levels of disciplinary
action?
- Action by head of regulation
- Disciplinary panel
- Appeal panel
What is the process
Initial investigation followed by 1 of 4 of:
- Fixed penalty notice (fine or caution)
- Make regulatory compliance order
- refer the matter to member of regulatory tribunal
- refer matter to disciplinary panel.
Why would it be a regulatory compliance order?
Low level breaches of the rules
Why disciplinary panel? What penalties are available?
For more serious breaches of conduct.
1. Regulatory compliance order
2. Reprimand
3. Caution
4. Fine
5. Impose conditions upon future registration
6. Expulsion from membership
7. require publication of results of hearing on RICS website or other sources.
Why might you decline an instruction
- You are not competent to undertake the works
- Do not have sufficient facts on the issue
- client won’t sign Tof E or complete AML check
- PII cap not agreed
- Advice on personal basis
What is dual agency?
When an agent has contractual agency relationship with both seller and buyer
What must firms include in their CHP
Alternative Dispute Resolution Mechanism
What are the categories of the RICS documents?
Professional standards - Set out all mandatory requirements that must be followed.
Guidance notes -
Professional statements -
Codes of practice -
Jurisdiction guides -
What is informed consent?
What is a responsible principle?
Has primary responsibility for ensuring that RICS professional, technical and ethical standards are applied, upheld and supported.
What are the protected characteristics of the quality act
age
race
gender
religion
sexual orientation
disability
marriage situation
pregnancy and maternity
What is the key legislation to consider in relation to consider in relation to bribery, gifts and hospitality?
Bribery act 2010 - aims to reduce bribery in business in the UK and abroad
Who is it policed by
Serious fraud office
Has the RICS published any information on PII requirements?
Professional indemnity insurance requirements version 9 (2022)
What would happen if a firm couldn’t obtain run off cover from the open market or their incumbent insurer
They will be able to apply for coverage to the RICS run-off pool
What is run off cover?
Extension to PII cover to cover firm for past work.
What is the final step of the RICS ethics decision tree
Would you be content for your actions top be made public.
If no don’t proceed.
If yes decide what action to take.
What is a principal
Someone who can carry out work without supervision eg a director
What kind of companies can register for membership?
LLP
Corporate bodies
Sole practitioners
Partnership
What is a responsible principal
Someone who regularly reports to the RICS and ensures all reasonable steps are taken to ensure a firms compliance to regulatory and RICS requirements
What are Bye Laws.
Laws and regulations set by the governing council which are the basis of the RICS Rules of Conduct
What do they Bye laws do?
The bye laws provide power for head of regulation to make disciplinary and regulatory decisions. Including issuing disciplinary penalties and costs.
Can you provide some examples of the bye laws?
BL 1 - Application and definitions
BL 2 - Membership and registration
BL 3 - Designations
BL 4 - Contributing to funds
BL 5 - Conduct
BL 6 - Governing Council, Office, Staff
BL 7 - Subordinate boards, committees, groups
BL 8 - Procedure for general meetings
BL 9 - Accounts and audit
BL 10 - General
What is the motto of the RICS
There is measure in all things
What are the two levels of due diligence?
Customer Due Diligence (CDD)
Enhanced Due Diligence (EDD)
What are the 4 levels of RICS membership
Student
Associate
Chartered
Fellow
What are the confidential aspects of the Red Book
Client data
Property specific data
Contract terms
