Ethics Flashcards
1
Q
Why do you want to become a member of RICS? (SRMKN)
A
- Status
- Recognition
- Market advantage
- Knowledge
- Networking
2
Q
What is the role of RICS? (MPL)
A
- Maintain the highest standards of education and training
- Protect consumers through strict regulation of professional standards
- Leading source of information and independent advice on land, property, construction and associated environmental issues (RICS 2015)
3
Q
What is a Royal Charter?
A
A Royal Charter is an instrument of incorporation, granted by the Queen, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs.
4
Q
Who is the president of the RICS?
A
Timothy Neal since December 2018
5
Q
Who is the president-elect?
A
Kath Fontana
6
Q
What do you understand by the term self-regulation?
A
Rics has its own Internal RICS regulation which if not adhered to can impose three levels of disciplinary action:
- Action by Head of Regulation
- Disciplinary panel
- Appeal panel
7
Q
Can you tell me what you understand about the principles of better regulation? (PACTT)
A
- Proportionality – regulators should only intervene when necessary. Remedies should be appropriate to the risk
- Accountability – Regulators must be able to justify their decisions and be subject to public scrutiny to promote complete fairness.
- Consistency – Regulators must adopt a common sense approach and that rules and standards must be joined up and implemented fairly. Regulation should be predictable in order to give stability and certainty to those being regulated.
- Targeting – Regulators should be focused on the problem and minimise side effects and that regulations should focus on the problem and avoid a scattergun approach.
- Transparency – Regulators should be open and keep regulations simple and user-friendly.
8
Q
What is a bye law?
A
Is a rule or law made by an organisation to control the actions of its members
9
Q
Give me and example of one of the RICS Bye-Laws?
A
B2.1 Classes B2.1.1 – The Members of RICS shall consist of the following classes: (a) Chartered members, comprising: (i) Fellows; (ii) Professional Members; (b) Non-Chartered members; and (c) Honorary Members B4.3 Payment – A person shall be liable for the payment of his fees, subscription, levy or other sums payable while he is or was in membership
10
Q
What are the five professional and ethical standards? (AAATT)
A
- Act with integrity
- Always provide a high standard of service
- Act in a way that promotes trust in the profession
- Treat other with respect
- Take responsibility
11
Q
What are the Key principles of Rules of Conduct for Firms? (PCSC CCI)
A
- Professional behaviour – A firm shall always act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with its professional obligations
- Competence – A firm shall carry out its professional work with due skill, care and diligence and with proper regard for the technical standards expected of it
- Service – A firm shall carry out its professional work with expedition and with proper regard for standards of service and customer care expected of it.
- Training and continuing professional development (CPD)
- Complaints Handling – A firm shall operate a complaints handling procedure and maintain a complaints log. The complaints handling procedure must include an alternative dispute resolution (ADR) mechanism that is approved by the Regulatory Board
- Clients’ Money – A firm shall preserve the security of clients’ money entrusted to its care in the course of its business practice.
- Indemnity – A firm shall ensure that all previous and current professional work is covered by adequate and appropriate indemnity cover which meets standards approved by the Regulatory Board.
12
Q
What are the 7 principles of the Rules of Conduct for Members? (ECSC SIC)
A
- Ethical Behaviour – Members shall at all times act with integrity and avoid conflicts of interest and any actions or situations that are inconsistent with their professional obligations
- Competence – Members shall carry out their professional work with due skill, care and diligence and with proper regard for the technical standards expected of them
- Service – Members shall carry out their professional work in a timely manner and with proper regard for standards of service and customer care expected of them.
- Continuing Professional Development (CPD) – Members shall comply with the RICS’ requirements in respect of CPD
- Solvency – Members shall ensure that their professional finances are managed appropriately
- Information to the RICS – Members shall submit in a timely manner such information, and in such form, as the Regulatory Body may reasonably require.
- Co-operation – Members shall co-operate fully with RICS staff and any person appointed by the regulatory Board (RICS 2013)
13
Q
What Disciplinary Procedures can the RICS impose?
A
- Fixed Penalties – procedure used for breaches of the Rules relating only to the supply of information to the RICS by firms and members.
- Consent Orders – Procedure used for low level breaches of the Rules as for some minor breaches which could easily be corrected. The consent order is a written document which states the terms upon which the member or firm must take or desist from taking certain actions in a specified time period.
- CPD Sanctions – These sanctions place an obligation on a member to follow the CPD requirements
- Action by Disciplinary Panel – Procedure used for more serious breaches of conduct. The Head of Regulation can consider that a hearing is required under the discipline rules. 50% of the membership of this Panel are lay members.
14
Q
How can a disciplinary procedure be triggered?
A
A disciplinary procedure can be triggered by:
- Someone complaining to the RICS
- An allegation by a third party
- Because of information received or established by the RICS
15
Q
What are the three levels of actions within disciplinary procedures?
A
Three levels of disciplinary action:
- Action by Head of Regulation
- Disciplinary panel
- Appeal panel
16
Q
What do you understand by the term professional practice?
A
Ones professional responsibility. Refers to the conduct and work from someone in a particular profession
17
Q
What money laundering legislation are you aware of?
A
1) The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
Business’ must:
- Provide staff training
- Conduct a written money laundering and terrorist financing risk assessment for the firm
- Ensure appropriate record keeping, policies and procedures
2) Proceeds of Crime Act 2002 – creates a set of criminal offences intended to combat money laundering (AML offences)
18
Q
What Bribery legislation are you aware of?
A
The Bribery Act 2010
Promote anti-bribery practices amongst businesses, and came into force on 1 July 2011. An organisation will commit a criminal offence, if it fails to prevent bribery that is intended to get or keep business or an advantage in the conduct of business for the organisation.
19
Q
What is a Bribe?
A
Can be the giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust.
20
Q
What constitutes and offence under the bribery act?
A
1) Bribing
2) Receiving a bribe
3) Bribing a foreign public official; and
4) Failing to prevent bribery
21
Q
What constitutes an offence under the money laundering regulations?
A
Where the proceeds of criminal activities are converted into legitimate assets
1) Tipping someone off who is under suspicion
2) Assisting a criminal to obtain, hide or invest funds
3) Failing to report knowledge or suspicion
22
Q
What is PII insurance?
A
Professional Indemnity Insurance
23
Q
Can you tell me about the RICS requirements in relation to PII?
A
Appropriate cover assessed on annual turnover/estimated turnover for a new business (and then adjusted)
Firm’s turnover in the preceding year Minimum level required for each claim
- £100,000 or less = £250,000
- £100,001 to £200,000 = £500,000
- £200,001 and above = £1,000,000
24
Q
What is an annual return?
A
Submitting an Annual Return is an annual requirement for RICS professionals who are in the Valuer Registration (VR) scheme and Firms who are regulated in Firm Regulation (FR).
- The number of individual valuations you have performed in the last 12 calendar months, although they can request up to 36 months.
- The best estimate amount for the highest value valuation you carried out in the last 12 months.
- The estimate amount of the firm’s total fee income from valuation services in the last 12 months.
- Details of your Professional Indemnity Insurance (PII).
- The availability of complaint handling procedures in your firm/organisation.
- The approved alternative dispute resolution (ADR) provider engaged by your firm/organisation under its complaint handling procedure.
25
Tell me what you understand about Complaints Handling Procedures.
- Mandatory in ALL terms of engagement
- A firm’s written CHP must be approved by RICS
- All complaints must be logged
- Firms must include an approved RICS Alternative
- Dispute Resolution (ADR) mechanism in their Complaints Handling Procedure (CHP).
26
Can you tell me about the CPD requirements for Members of RICS?
* 20 hours per year for chartered members
| * 48 hours per year for trainees
27
Why is CPD important?
Because it is a rule of conduct
28
Tell me about the RICS’ guidance on dealing with Conflicts of Interest.
A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent.
29
What is informed Consent?
* This can only be given in writing by the party if the person explaining the position to them is entirely transparent about any material factors and sure that the party affected understands what they are doing.
* Surveyors should only seek informed consent if satisfied that all relevant parties are best served by doing so.
30
Are you aware of any new guidance relating to conflicts of Interest?
• RICS Professional Statement Conflicts of Interest, 2017 (mandatory 1st January 2018) – defines three types of conflict:
- Party Conflict: work on same or related instruction for two different parties.
- Own Interest Conflict: relating to a personal interest
- Confidential information conflict: relating to work between two parties which is confidential
- Conflicts of interest - UK commercial property market investment agency, 2017
- Dual agency: where an agent had a contractual agency relationship with both the seller and buyer at the same time – must not be undertaken in any circumstances from 1st January 2018
31
What is double dipping (dual agency)?
Where an agent had a contractual agency relationship with both the seller and buyer at the same time – must not be undertaken in any circumstances from 1st January 2018
32
What do you need to do if you are setting up a new practice (RICS)?
* Complete a Firm’s Detail Form and send to RICS
* Appoint a contact officer for RICS communication
* Arrange PII and send details to RICS
* Set up procedures for handling client’s money
* Obtain RICS approval for complaints handling procedure
* Obtain a logo kit
* Ensure CPD is logged and set up a staff training plan
33
How would you close down a regulated firm?
* Inform the RICS
* Inform your clients and arrange handover to new firm
* Return any client monies
* Inform insurance – take out run off cover of £250,000 for a minimum of 6 years
* Retain client files and records for a minimum of 6 years
34
What can you tell me about any new RICS guidance relating to bribery, corruption or money laundering?
RICS Professional Statement – Countering bribery, corruption, money laundering and terrorist financing, 2019 (effective 1st September 2019)
Divided into 3 parts:
1. Mandatory requirements for anti-bribery and corruption and for anti-money laundering and terrorist financing
2. Guidance setting out supporting good practice for the above
3. Supplementary guidance on some of the concepts set out in Parts 1 & 2
35
Countering bribery, corruption, money laundering and terrorist financing, 2019 (effective 1st September 2019) - What status does it hold?
Professional Statement
36
In Countering bribery, corruption, money laundering and terrorist financing, 2019 what are some mandatory rules for firms and members in relation to bribery and corruption?
Part 1 – 1.3 Bribery and corruption: RICS regulated firms must:
- 1.3.1 In relation to bribery and corruption RICS-regulated firms must:
1. Not offer or accept, directly or indirectly, anything that could constitute a bribe.
2. Have plans in place to comply with applicable laws governing bribery and corruption, and ensure that these are followed.
3. Report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
4. Act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery or corruption in determining the corporate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate.
5. Retain information detailing how the firm has met the requirements of this professional statement.
1. 3.2. In relation to bribery and corruption RICS members must:
1. Same as (1) above
2. Ensure they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement.
3. Same as (3) above.
37
In Countering bribery, corruption, money laundering and terrorist financing, 2019 what are some mandatory rules for firms and members in relation to money laundering?
RICS-regulated firms must:
1. Not facilitate or be complicit in money laundering or terrorist financing activities
2. Have systems and training in place to comply with these laws
3. Report any activity they are aware of that breaches anti-bribery and corruption laws to the relevant authorities (as specified in local legislation) - National Crime Agency
4. Evaluate and review periodically the risk that prospective and existing business relationships present in terms of money laundering or terrorist financing offences taking place.
5. Ensure that their responses to the risks identified are appropriate, including conducting appropriate checks on clients and customers
6. Use reliance only where there is an appropriate level of confidence in the quality of the information provided by the third party – reliance should only be taken from third parties with standards conforming to the legal requirements. Ultimate responsibility for the assessment of risk and actions taken based on this remain with the member or regulated firm.
7. Take appropriate measures to understand the client and the purpose of the transaction.
8. Verify the identity of the client by undertaking basic identity checks.
9. Record and retain information detailing how the firm has met the requirements of this professional statement.
RICS members must:
1. Same as (1) above.
2. Same as (3) above.
38
Can you tell me about some of the guidance in Countering bribery, corruption, money laundering and terrorist financing, 2019 in relation to bribery specifically?
Regulated firms should
- Have a written policy covering anti-bribery and corruption (updated periodically)
- Have appropriate governance and systems in place
- Implement a register including; gifts, hospitality, customer travel and hospitality, political contributions, potential conflicts of interest.
- Provide clear guidance for staff
- Appoint contactable person for compliance and ethics matters (large firms best practice). Small firms may still elect to make such an appointment depending on resource implications.
- Publish code of behaviour
- Carry out appropriate due diligence on third party suppliers in line with local legislation.
Members should;
- Declare items on register as above.
- Attend relevant training
- Be familiar with employer’s policy
- If a senior management position take a leadership role in attempting to ensure that their employer has an appropriate regime in place for addressing bribery and corruption risks.
39
Can you tell me about some of the guidance in Countering bribery, corruption, money laundering and terrorist financing, 2019 in relation to money laundering and terrorist financing specifically?
In relation to money laundering and terrorist financing regulated firms should;
Have a written policy in place addressing risks that cover the following issues:
- High risk situations where enhanced due diligence is required, understanding the source of funds in a transaction.
- Identifying PEPs, PSC’s and potential breaches of sanctions
- The process to be followed for customer due diligence
- The situations which simplified due diligence, standard/ordinary due diligence, or enhanced due diligence will be appropriate.
- Have appropriate governance/systems in place proportionate to the type of work the firm does.
- Provide appropriate, recurring training for staff
- Keep reports of suspicion of money laundering and terrorist financing activity confidential
- Identify the beneficial owner (anyone who benefits from the ownership of security or property, who may not be on record as the owner) of a company/client involved with a transaction
- Appoint senior person to be responsible for ensuring anti-money laundering and counter- terrorist financing policies are in place and complied with.
RICS members should:
- Keep abreast of current training offered
- Comply with employers policy
- Keep reports of suspicion confidential
- If a senior management position take a leadership role in attempting to ensure an appropriate regime in place for addressing money laundering and terrorist financing risks.
40
Can you tell me about any supplementary guidance in Countering bribery, corruption, money laundering and terrorist financing, 2019?
```
Supplementary guidance
THREE W’s when assessing risk:
- Who you act for
- What you are doing
- Why you are being asked to do something
```
41
What are the current RICS rules for registration of firms?
Eligible to register if 1-50% of the firms principals are MRICS
Must register if 50% or more
42
When will rules for registration of firms change?
April 2020
43
What are the key being made to rules for registration of firms?
- Minimum 25% firms principals MRICS to register.
- The firms with 2-24% who were previously regulated but now can no longer be will be considered on a case by case basis.
- Firms must designate a Responsible Principal who provides oversight, accountability and engagement with RICS standards and regulation
- Firms who cannot meet this can implement a plan to secure compliance or be supervised by another RICS Regulated Firm
44
Who is a ‘qualified member’?
AssocRICS/MRICS/FRICS – not student members
45
When must a firm register for regulation?
Required to register if at least 50% of the firms principals are MRICS
46
What are the registration eligibility criteria?
Eligible to register if 1-50% of the firms principals are MRICS
47
Who is a Responsible Principal?
A Firm that is registered or registering with RICS must at all times have a Responsible Principal.
A person may be appointed as Responsible Principal only if that person meets conditions A, B and C.
- Condition A is that the Head of Regulation is satisfied that the person is appropriate to hold that appointment.
- Condition B is that the Head of Regulation is satisfied that the person: a is able, through the exercise of executive leadership responsibility, to influence strategic objectives of, and significant decisions made by, the Firm; or b reports directly to a person who is so able and can demonstrate they have been delegated authority by the firm to fulfil the role of Responsible Principal.
- Condition C is that: a the person is an RICS Member; or b the person is not an RICS Member but the Head of Regulation is satisfied that: i it is impracticable for the Firm to appoint an RICS Member; and ii the person selected has sufficient experience in, and understanding of, regulatory compliance activities to carry out the duties of a Responsible Principal.
48
What happens if a firm cannot comply with the new rules? (For registration/regulation)
Firms who cannot meet this can implement a plan to secure compliance or be supervised by another RICS Regulated Firm
49
What are the rules around use of the RICS logo and ‘Regulated by RICS’ designation?
A firm that is registered for regulation must display on its business literature a designation that ensures members of the public, clients and potential clients can easily identify it is regulated by RICS
50
When will these rules around the use of the RICS logo and 'Regulated by the RICS' change?
April 2020
51
What changes are being made to rules around the use of the RICS logo and 'Regulated by the RICS' designation?
The use of the RICS logo has been restricted to members and regulated firms only
A requirement has been added that regulated firms must include a prescribed text in the terms of engagement issued to clients in respect of its surveying services to explain what being regulated by RICS means
52
Tell me about the restrictions to the use of the designation ‘Chartered Surveyors’ by firms.
A partnership or a company can use the designation ‘chartered surveyor(s)’ in a trading name only.
53
What must be included in ToE relating to firm regulation?
A requirement has been added that regulated firms must include a prescribed text in the terms of engagement issued to clients in respect of its surveying services to explain what being regulated by RICS means
54
How do you ensure that you comply with bribery legislation?How do you ensure that you comply with bribery legislation?
I ensure that whenever I am offered a gift, I refer to the Bribery Act and to my firm’s gifts register policy. If it would affect my impartiality, I would refuse the gift.
55
How do you ensure you comply with money laundering regulations?
I ensure I do not facilitate or be complicit in money laundering. I am aware of money laundering due diligence checks (KYC). I report any suspicions of money laundering to my firms Appointed Money Laundering Reporting Officer – who will then report any suspicions to the National Crime Agency.
56
How do you ensure you comply with your firm’s bribery and gifts policy?
I have an awareness of the firm bribery and gifts policy and ensure I refer to it prior to accepting any gift.
57
Tell me about an instance of where you have been offered a gift by a client.
I have never been offered a gift by a client, but I was sent a hamper by a consultant we had previously used for a now completed project. After determining the gift was not to be considered a bribe together with being both genuine and proportionate to the work carried out I accepted the gift and recorded it on my company’s gift register as I wasn’t sure whether the value was over or under £25.
58
Tell me about what you would do if you felt that an instruction was outside your scope of experience or knowledge?
I would either decline the instruction. Or, with the client’s permission introduce them to a colleague/another surveyor with the required experience and knowledge. If I didn’t know of one I would refer the client to the RICS find a surveyor service (www.ricsfirms.com)
59
Tell me about an instance when you have handled client’s money.
I have had no experience handling client’s money however I am aware that clients’ money is regulated by Section 14 of the Estates Agents Act 1979 and must be held in a designated client account. With the name ‘client’ also included on the account name.
60
How would you keep client’s money secure and safely held?
- Keep client’s money in separate account and clearly identifiable
- Word client must be on account
- Keep records accurate
- Annual audit and reporting obligations by a certified accountant employed by the RICS.
61
Tell me about how you would handle a client complaint.
- I would log this via the Customer Relationship Management System (CRM). This would then be formally logged on our CHP.
- Notify PII as complaint could lead to a case of negligence
62
Tell me about a conflict of interest check you have carried out.
When I was instructed for the disposal used in my case study. I first asked within my firm and then also considered my own interests, personal and financial.
63
If you identified a potential or actual conflict of interest, how could you handle this?
1) Decline the instruction
2) Write to the client gaining informed consent in writing.
- May need to set up information barrier/move to another part of the office if client agrees and still in the client’s best interest to proceed.
64
How did you deal with the offer of the hamper?
Referred to the bribery act – considered whether it was a bribe. Aware that if it was a bribe it may affect the review and monitoring policy of my firm. Accepted the gift, as I wasn’t sure of the value I recorded on the company’s gift register.
65
What principles did you apply from the bribery act in relation to the offer of the hamper and why?
I wanted to ensure the offer of the hamper wasn’t to be considered a bribe, because if so this would have had an influence on the monitoring and review procedures of the gifts policy my organisation has in place.
66
Why did you accept the gift?
Because it was not a bribe, and it was allowed under by companies gifts policy. As I could not be certain the value was under £25 I recorded it on my organisation’s gift register.
67
When would you reject a gift?
If I thought it would affect my impartiality
68
Talk me through how you have handled confidential or sensitive information on an inspection.
As a landlord of a large health portfolio I am frequently exposed to confidential/sensitive information. I ensure that I do not include these in my inspection photographs and alerted the practice manager?
69
Give me an example of when you have acted with integrity?
When I was negotiating heads of terms for a property in Southwark, I learned the occupier was acting without legal advice. I advised the occupier to engage a solicitor so they were clear of the terms they were agreeing to. As the occupier was unsure where to find a solicitor, I advised that the law society website would be a good place to start.
70
Tell me about when you have provided a high standard of service.
1
71
Tell me about how you have promoted trust in the profession?
1
72
Explain how you have taken responsibility in your current role?
1
73
Tell me about how you treat clients with respect.
I ensure that I always listen carefully to clients when they are talking. I take on board their views to help ensure they receive the best possible outcome.
74
Tell me about how you treat other surveyors with respect.
I ensure that I always listen carefully to other surveyors. I take on board their views and I am polite when conversing with them. I understand that surveyors may be acting in the best interest of the client and so if I disagree with another surveyor I ensure I am not rude in my response.
75
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying (RICS requirements)
Would need to consider RICS requirements as well as statutory requirements.
• Complete a Firm’s Detail Form and send to RICS
• Appoint a contact officer for RICS communication
• Arrange PII and send details to RICS
• Set up procedures for handling client’s money
• Obtain RICS approval for complaints handling procedure
• Obtain a logo kit
• Ensure CPD is logged and set up a staff training plan
76
Explain the key steps you would take if you decided to set up in practice as a sole trader after qualifying (statutory requirements)
* Appoint directors and a company secretary
* Register your company at Companies House
* Register for Corporation Tax at HMRC
* Register for Data Protection
* Ensure compliance with Bribery Act 2010
* Ensure compliance with employment law (e.g national living wage etc.)
* Ensure compliance with other legislation Health & Safety, Asbestos, Estate Agents Act, CPR, Fire Safety etc
77
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
I would not accept the incentive. I would advise the potential purchaser that I would not accept the gift and that the offer accepted would be the one which best serves the clients interest. – and report this to my line manager as per my organisation’s policy.
78
What would you do if you were asked by a client to reduce a fee proposal to win new work?
I would refuse fees should be market based and shouldn’t undercut other firms. I would potentially look at the scope services provided and look to reduce this down if the client wanted a lower overall fee.
79
What would you do if you became suspicious that an agency client was involved in money laundering?
I would inform my firm’s appointed Money Laundering Reporting Officer – who will then report any suspicions to the National Crime Agency.
80
What would you do if you became suspicious that an agency client was involved in terrorist activities?
I would report the suspicions to the police.
81
If you were to set up in practice on your own, tell me about the types of insurance you would need.
Professional Indemnity insurance – to cover the economic loss which you could be sued for in the case of negligence.
Employer’s liability insurance – if business employs anyone you need at least £5m cover.
Building and contents insurance? (Optional)
82
How did you deal with the client’s request to assist with a Bristol-based instruction?
I understood my limitations as a surveyor. Having no previous commercial experience in the Bristol market, I therefore understood I would not be in a position to offer my client a high standard of service and best possible advice. I therefore advised them to engage with a colleague in the Bristol NHSPS office to enable them to receive a higher standard of service.
83
How did you ensure a high level of service was still provided? (Bristol)
As the client was through my introduction I still had a duty of care to this client. I asked that my colleague keep me updated as the instruction progressed to ensure a high standard of service was still being received.
84
Talk me through your advice to the unrepresented occupier at Southwark.
When I was negotiating heads of terms for a property in Southwark, I learned the occupier was acting without legal advice. I advised the occupier to engage a solicitor so they were clear of the terms they were agreeing to. As the occupier was unsure where to find a solicitor, I advised that the law society website would be a good place to start.
85
How can you find a solicitor?
The Law Society website has a find a solicitor webpage in which you can select a specific legal issue as well as a local area and the user will be matched with solicitors operating in that area of law.
86
What ethical standards did you demonstrate? (unrepresented occupier)
I believe this demonstrated acting with integrity and promoting trust in the profession
87
Can you name some of the stages on the RICS Ethical decision Tree?
Consult Q and A pack but
1) Do you have sufficient facts on the issue?
2) Is it legal?
3) Is it in line with RICS global professional and ethical standards
4) Have you consulted with appropriate people to make an informed decision
5) Do you have clear reasoning in reaching your decision?
6) Would you be content for your actions to be made public - in the newspapers or on the internet? (press test)
88
Can you give me an example of a time when you have used the RICS ethical decision tree in your professional life?
A consultant once asked me to give them an indication as the where the current level of bids were during the tender process for a transport consultant on a development project. I referred to the RICS ethical decision tree after determining I had sufficient facts and the request was not illegal I proceeded to the next stage before determining it was not in line with the RICS global professional and ethical standards and not proceeding.
89
Can you give me an example of a time when you have used the RICS ethical decision tree in your personal life?
I was approached at a cricket match by a friend who asked me whether I would be able to review a title register for a house they were considering purchasing. I referred the ethical decision tree and after determining I had the sufficient facts and it being legal I referred to the five ethical and professional standards and determined it would be irresponsible to provide advice without ToE being in place as I wouldn’t be protected under PII. I put them in contact with a solicitor who would be able to advise them.
90
What are some of the principles within the Bribery Act 2010 (PTR DCM)
1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review
91
What are some of the key principles in Conflicts of interest, 2017
• RICS Professional Statement Conflicts of Interest, 2017 (mandatory 1st January 2018) – defines three types of conflict:
- Party Conflict: work on same or related instruction for two different parties.
- Own Interest Conflict: relating to a personal interest
- Confidential information conflict: relating to work between two parties which is confidential
- Informed consent - only in writing and only if in parties best interest
- Firms must have effective systems in place to ensure compliance
- Firms must keep record to show how they complied with professional statement.
92
What is GT gifts policy?
Check
93
What would you do after you realise sensitive information is on display?
Acting ethically I would alert the practice manager that files have been left out
94
Who runs the RICS?
The Members. Specifically governing council, which management and regulatory board and audit committee report to
95
What is the RICS motto?
There is measure in all things
96
What do you know about the CEO?
Check
97
Tell me something topical at the RICS?
- Partnership with Land Aid to raise 2.25 million for homeless to celebrate 150 years
- RICS joined International Fire Safety Standards coalition
98
Tell me an issue at the RICS?
Lack of women and ethical representation
99
What are the RICS doing to change that issue? (Lack of women and ethical representation)
RICS Inclusive Employer Quality Marks. Pledge for firms to be diverse in recruitment and representation.
100
How do you become FRICS?
5 years MRICS, leadership role, promote status of RICS, academic qualification
101
What have you read in Modus recently?
Check
102
How many rules are there for members?
9
103
How many rules are there for firms?
15
104
How many international ethics standards are there?
10
105
What are the most common rule breaches, published in modus?
3. Ethical Behaviour
| 6. CPD
106
Why is confidentiality important?
RICS Bye law
107
What would you do if you overhead confidential information?
- Inform the person I heard it from
- Inform my compliance officer
- Delete the information
- Do not use it for my own purpose
108
Why do the RICS recommend 15 year run off?
Limitation Act 1980 - can sue up to 6 years from the date of the negligent act, breach of contract or omission.
- 15 year long stop date from the negligent act or omission
109
What are punishments for money laundering?
- 14 years for money laundering
- 5 years for tipping off
- 2 years for failing to do checks
110
What is a Locum?
- Put in place in the event of death
111
What are implications on the property market of Brexit?
- Reduced labour mobility – concerns for construction – more expensive
- Uncertainty - cost reports only valid for 3 months at the moment rather than 6.
- Investment – freeze and wait for things to happen – yield move out
- Also falling pound has increased demand for non-domestic investors into the UK – Asian investors
112
When was the RICS founded?
1868
113
When was the royal charter granted and by whom?
Privy council in 1881
114
What is the governance structure of the RICS?
- Governing council runs the RICS and provides management and strategic direction
- the Audit committee, The regulatory board, and the management board report to governing council
115
What are some of the changes to the Royal Charter and bye-laws coming up later this year?
- Creating smaller, more diverse and geographically representative Governing Council
- Give more powers to World Regional Boards
- Governing Council is to be reduced to minimum 25 seats (currently 50)
116
What are the 10 international ethics standards?
1. Accountability
2. Confidentiality
3. Conflicts of Interest
4. Financial responsibility
5. Integrity
6. Lawfulness
7. Reflection
8. Standard of service
9. Transparency
10. Trust
117
What can you tell me about the RICS Professional Statement, Conflicts of Interest - UK Commercial Property market investment agency, 2017? (Dual agency, multiple introductions)
- Effective 1st January 2018
- Dual agency (contractual relationship with buyer and seller - banned from 1st January 2018)
- Multiple introduction must inform client in ToE if exclusive or non-exclusive
- If exclusive must tell all other clients they cannot act for them
- If non-exclusive must obtain informed consent from the client(s) subject to the necessary information barriers being in place.
- On appointment the seller or sellers agent must be advised accordingly.
118
What can you tell me about the RICS Professional Statement, Conflicts of Interest - UK Commercial Property market investment agency, 2017? (Incremental advice/Own Interest Conflict)
- Incremental advice is where an agent is approached by another party to provide advice e.g. valuation, building surveying or planning, relating to a purchase/sale that is incremental to an existing instruction.
- Must only provide such incremental advice if consent is given and an information barrier put in place before providing any incremental advice to the prospective purchaser.
Personal interest/own interest conflict
- Arises when acting for a family member, close business associate or someone whom you have a financial/personal interest/benefit (known as connected person)
- Must not let personal interest interfere with or influence your professional judgement, full transparency is required.
- Declare facts promptly and in writing before accepting instruction
- Remember Section 21 Estate Agency Act
119
What is the THREE step process for handling conflict?
1) Conflict avoidance - consider if irresolvable conflict or affects your impartiality and should be declined or
whether it can be managed.
2) Written advice to both parties (informed consent)
3) Conflict management - use of information/ethical barriers
120
What THREE points must be covered in writing to the client to gain informed consent?
1. Disclose nature and all relevant facts and proposals for dealing with conflict such as information barrier.
2. Be as clear as you can and recommend to seek independent advice
3. Request written confirmation of their informed consent
121
What type of things would you do to set up information/ethical barrier after gaining informed consent?
- Barrier must be robust enough to offer no chance of information passing between the two parties
- Must take reasonable steps to operate an effective barrier.
- Surveyors for each side need to be physically separated
- All information regarding instruction should be stored securely
- Keep audit trail of all written and oral communication
122
What is the limit of uninsured excess for up to £500,000 and over £500,000
Up to £500,000 - The greater of 2.5% of the sum insured or £10,000
Over £500,000- 2.5% of the sum insured
123
What are the 8 key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the payer) Regulations, 2017?
1. The requirement to conduct a written risk assessment
2. Implement systems to comply with regulations
3. Adopt appropriate internal controls
4. Provide staff training
5. Comply with CDD, EDD and SDD requirements
6. Comply with requirements relating to PEPs
7. Ensure appropriate record keeping and procedures
8 AML checks before exchange
124
What does CDD entail for an individual?
- Identity check - Licence/Passport
- Identify beneficial owners where applicable
-
125
What does CDD entail for a company?
- name
- company number
- address of registered office
- names of directors (unless listed on stock exchange)
- Obtain information on purpose of the transaction and proposed funding arrangements
126
What does EDD entail?
- More detailed examination of background and the purpose of the transaction and an increased level of monitoring is required.
127
When would SDD be appropriate?
- Appropriate where there is low risk of money laundering or terrorist financing
- not appropriate for property transactions
128
Typical requirements for money laundering checks for CDD
- Public limited company
- Public accountable body
- Private limited company
- Private individual
- Public limited company - London Stock Exchange Listing
- Public accountable body - Government ownership/control
- Private limited company
> Certificate of incorporation
> Full name
> Registered number
> Registered Office
> Business Address
> Names of all directors
> Names of all shareholders with more than 25%
- Private individual
> Copy of valid passport of driving licence
> Copy of bank statement - within 3 months.
129
What are the three main areas of offence under the Proceeds of Crime Act 2002?
1. Concealing criminal property
2. Arrangements - if a person enters into or become concerned in an arrangements which facilitates, acquisition, retention or use of criminal property.
3. Acquisition use and possession - of criminal property.
130
Do you know of any new RICS material on handling clients money?
RICS Professional Statement Client money handling (1st edition) 24th October 2019 - Effective 1st January 2020
131
What are some of the new requirements in RICS Professional Statement Client money handling (1st edition) 24th October 2019
- Hold all money in a client account
- Ensure client is on the account
- Confirm the bank operating conditions in writing
- Unidentified funds are promptly identified. If the owner is not identified within 3 years then they must be paid to a registered charity
