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APC > Ethics 2 > Flashcards

Ethics 2 Flashcards

1
Q
  • What is the process of opening an RICS regulated firm?
A

RICS Requirements:

  • Inform RICS
  • Appoint Responsible Principal
  • Register with Regulatory Board
  • Arrange PII, Client Money Handling Procedure and CHP + approved
  • Register with RICS Valuer Registration Scheme if required
  • Plan for succession
  • Ensure completion of Annual Return inc. CPD

Statutory Compliance:

  • Disclose business name
  • Equality Act and Bribery Act compliance
  • Appoint AML and H&S Officers
  • Health and Safety Officer
  • Inform HRMC for tax
  • Ensure compliance with local laws
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2
Q
  • What is the process of closing an RICS regulated firm?
A

When closing a firm, for the RICS, you must:
o Inform RICS
o Inform clients as soon as possible
o Return money held for clients
o Inform insurers and acquire run-off PII for min 6 years
o Retain client’s files for 6 years

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3
Q
  • Can you tell me about RICS Disciplinary Procedure?
A
  • Standards and Regulations Board
  • Set out in ‘RICS Regulatory Tribunal Rules 2010’.

Head of Regulation can;

1.) Serve Fixed Penalty Notice
o Information provided to RICS breach

2.) Make a Regulatory Compliance Order

3.) Refer matter to member of Regulatory Tribunal

4.) Refer matter to Disciplinary Panel

Appeal:
o Includes members outside of RICS
o Reviews original and new information

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4
Q
  • What can you tell me about the background of the RICS?
A
  • Started in 1868
  • Has a royal charter, granted by Privy Council in 1881
  • Regulations and byelaws set out the governance of the Institution
  • President = Ann Gray FRICS
  • 140,000 qualified and trainee members
  • 4 Levels: FRICS, MRICS, AssocRICS and Trainee
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5
Q
  • What requirements do you need to become FRICS?
A
  • Achieve four of the following:
  • 5+ years as MRICS
  • Leadership role
  • Professional achievement
  • Academic achievement
  • Raising the profile of the RICS
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6
Q
  • What is the governance structure of the RICS?
A
  • Privy Council – advisory board to Monarch and Ministers
  • Governing Council - provides management and strategic direction
  • Regulatory Board, Management Board, Audit Committee
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7
Q

What is Money Laundering and the method?

A
  • Money laundering is when proceeds of criminal activities are disguised or converted to make a legitimate asset

3 Stages of Money Laundering:
- Placement – Move money from source to legitimate system
- Layering – transactions to disguise
- Integration – clean money returned

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8
Q

What does the RICS Countering Bribery, Corruption, Money Laundering and Terrorist Financing say?

A
  • Required to have a written AML assessment
  • Implement systems to prevent AML and meet requirements
  • Provide staff training
  • Comply with requirements regarding Politically Exposed People
  • Ensure record keeping
  • AML checks must be undertaken for proposed purchasers
  • Seek additional risk investigation where required
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9
Q

When is an AML check required?

A
  • Required for sales
  • Required for lettings (and renewals) over €10,000 per month
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10
Q

What are the levels of AML checks?

A
  • Simplified – limited information available (PLC)
  • Standard – normal checks (Ltd)
  • Enhanced – companies or people with any red flags
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11
Q

What do you ask for in an AML check?

A
  • Identify the ‘Beneficials’ (owners of the company over 25%)
  • List of documents including acceptable ID – 2 forms required (driving licence, passport etc)
  • For companies: name, company number and address.
  • SmartSearch software
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12
Q

Why would you undertake an enhanced check?

A
  • Politically Exposed People
  • High-risk countries
  • Business associates
  • Limitation of cash accepted (€10,000)
  • Detailed record keeping
  • AML Officer identified
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13
Q

What is a SAR?

A
  • SAR (Suspicious Activity Report) required if notice any risks
    o Defence – defend against sale (postpose transaction)
    o Information – walking away from the job
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14
Q

What are the penalties for AML negligence?

A
  • Max 14 years in prison and/or unlimited fine for assisting money laundering
  • Max 5 years in prison and/or unlimited fine for tipping off or informing that under AML suspicion OR failing to report suspicion
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15
Q

What are potential red flags in an AML process?

A
  • Unwillingness to participate
  • Changes to parties involved in transaction
  • Unexpected urgency
  • Potential loss making
  • Payment in unusual currencies
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16
Q

What is the AML protocol in a joint agency instruction?

A
  • Both undertake due diligence
  • Reliance on other party
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17
Q

What does the Proceeds of Crime Act 2002 include?

A
  • Provides enforcement authorities the right to recover criminal money
  • Also provides criminal offences in order to combat AML – inc the concealment of criminal money
18
Q

Who oversees the disciplinary of RICS members?

A

RICS Standards and Regulations Board

  • Responsibility to protect the public
19
Q

Where is the RICS disciplinary process set out?

A

RICS Regulatory Tribunal Rules 2020

20
Q

What are the different levels of disciplinary action?

A

3 Levels of Action:

  • Action by Head of Regulations
  • Disciplinary Panel
  • Appeal Panel
21
Q

What is contained within the process of disciplinary procedure?

A
  • RICS Head of Regulation formalise the investigation
  • Then decide on one of the following:
  1. Serve a Fixed Penalty Notice
  2. Regulatory Compliance Order
  3. Refer to Regulatory Tribunal
  4. Refer to Disciplinary Panel
22
Q

What is a Regulatory Compliance Order?

A
  • For minor breaches (e.g. CPD non compliance)
  • Withdraw member from actions for a period of time
23
Q

What is a Disciplinary Panel?

A
  • For serious breaches
  • Includes non-RICS members
  • Penalties include - fines, exclusion
24
Q

What is the Appeal Panel?

A
  • Includes members outside the RICS
  • Reviews new and original information
25
Q

What is PACTT?

A
  • Used when assessing penalties

o Proportionality – is penalty proportionate/fair
o Accountability – accountable to public
o Consistency – treat all members equally
o Targeting – serious breaches
o Transparency – all parties

26
Q

What are the thresholds for the level of PII cover required?

A

PII Thresholds:

Turnover below £100,000 = PII £250,000
Turnover below £200,000 = PII £500,000
Turnover above £200,000 = £1M

  • Maximum excess is £10,000 for firms with turnover below £10M
  • Not max excess for those over £10M
27
Q

How many hours of CPD are required each year and what is the split?

A
  • 20 hours
  • 10 minimum = Formal
  • Undertake by 31st January each year
28
Q

Would you accept a bottle of wine from the bank’s customer after the instruction?

A

No, think about how the bank would perceive this. Even if it is after the instruction.

29
Q

Should you negotiate on a fee?

A

No, inform client that this fee has been considered and reflects the works and experience.
- Competition is encouraged
- Fee cutting is not ethical
- Market based fees

30
Q

Where can you find the RICS Decision Tree?

A

RICS Website

Wwebpage related to Rules of Conduct

31
Q

Who can members contact with ethical dilemmas?

A

RICS Regulation Confidential Hotline

32
Q

What do the RICS publish regarding Social Media?

A

Use of Social Media Guidance Note

  • Members damaging the reputation of the RICS and profession online
  • Discrimination
  • Hate
33
Q

What guidance is there on dealing with confidentiality?

A
  • Mentioned within the RICS Bye Laws
  • Estate Agency Guidance Notes
34
Q

What are RICS Bye Laws?

A
  • 10 bye laws
  • Set out requirements of RICS members
35
Q

What kind of money can client’s money include?

A
  • Rent
  • Deposits
  • Service Charges
36
Q

What guidance is there for Clients Money Handling?

A
  • RICS Client Money Handling Professional Statement
37
Q

What are the 6 main areas for good practice within the RICS Client Money Handling Professional Statement?

A
  • Holding client money
  • Providing information to clients
  • Receipts of client money
  • Payments from client accounts
  • Accounting records and controls
  • Compliance
38
Q

How would sanctions have an affect on AML?

A
  • Identifying purchasers through AML checks
  • Potentially restricted from purchasing property
  • Contact OFSI for assistance
39
Q

Where would you consult for advice on AML?

A
  • RICS Countering Bribery, Corruption, Terrorist Financing and Money Laundering
40
Q

Is being offered a form of hospitality allowed?

A

IT DEPENDS

  • Can it be perceived as a bribe?
  • What is the value of the item?
  • Is it allowed by the company policy, RICS and local laws?
  • Is it proportional?
  • What is the timing?
  • What is the relationship?
41
Q

What is a piece of case law for negligence?

A
  • Yianni v Edwin Evans (1981) - residential valuer liable for mortgage

APC (32 decks)

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