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Tilly Rees SoE > Ethics Condensed > Flashcards

Ethics Condensed Flashcards

1
Q

What are the new RICS documentation categories?

A

Professional Standards
- Document that set out guidance for competent and ethical practice
- eg existing Professional statements and guidance
Practice information
Document that provides advice or practice support to RICS members and firms

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2
Q

Why is the change occurring for RoC?

A

Following the Bichard Review:
* They want to ensure RICS standards are up to date and easy to use.

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3
Q

Define Professional Standard

A

A set of guidelines that outline the expected behaviors and competencies of RICS members

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4
Q

Define Practice Information

A
  • These provide advice or practice support to RICS members and firms.
  • They are not mandatory.
  • It does not make explicit recommendations.
  • It includes processes, toolkits, checklists, insights etc.
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5
Q

When is the change rolling out (PS/PG)?

A

RICS are currently reviewing and re-categorising documentation.

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6
Q

Founded

A

1868

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7
Q

Royal Charter

A

A document that gives an organization legal status and defines its powers, objectives, and constitution.
RICS has a Royal Charter, initially granted by Privy Council in 1881

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8
Q

What sets out the governance of the institution?

A

RICS Regulations and Bye Laws set out the governance of the Institution

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9
Q

What are the FOUR levels of membership?

A

There are 4 levels of membership
1. FRICS
2. MRICS
3. AssocRICS
4. Trainee/Student

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10
Q

What to do to become a fellow?

A
  1. Evidence of achievement of FOUR fellowship characteristics, which include:
    * five or more years at MRICS,
    * a leadership role,
    * professional/technical achievement,
    * academic achievement or
    * raising the profile of RICS
  2. A portfolio of professional achievement to support the application is required to include your CPD
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11
Q

Current governance structure

A
  • Governed by internal councils and boards
  • Governing council has 20 members
  • The Standards and Regulation Board and the Management Board report to the governing council
  • There are 17 specialist professional groups covering property, land and construction
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12
Q

What does the governing council do?

A
  • Runs the RICS
  • Providing management and strategic direction
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13
Q

Who is the current Chief Executive officer?

A

Justin Young

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14
Q

Who is the current president and what do they do?

A

Justin Sullivan FRICS
* He chairs Governing council

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15
Q

What is the role of the RICS?

A
  • Promote and enforce the highest professional qualification and standards
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16
Q

What are the THREE main roles of the RICS?

A
  1. Highest standards of education and training
  2. To protect consumers through strict regulation
  3. To be the leading source of information and independent advice on land, property, construction and associated issues (RICS 2015).
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17
Q

What was the Levitt Review?

A
  • Undertaken in 2021.
  • Public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
  • Levitt called for a full independent review of ‘purpose, governance and strategy’ of RICS.
    This led to a review by Lord Michael Bichard.
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18
Q

What was Bichard Review?

A
  • Followed the Alison Levitt Review in 2021.
    Aim: to clarify the PURPOSE of RICS, including its responsibility to act for the public advantage.
    Provide proposals for incoming leadership/governing body on the future culture and strategy of the institution.
  • RICS recruited Diversity, Equality and Inclusion and Sustainability Panel Chairs.
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19
Q

What were the 7 key areas of the 36 recommendations?

A
  1. PUBLIC INTEREST
  2. MAINTAINING SELF REGULATION
  3. DIVERSITY AND INCLUSION
  4. EMPOWERING MEMBERS
  5. INDEPENDENT REVIEW
  6. NEW STRUCTURE
  7. LEADERSHIP
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20
Q

What are the FIVE Future Foundations in November 2023 following the Bichard Review

A
  1. VISION
  2. MISSION
  3. STRATEGIC GOALS
  4. VALUES
  5. A WORLD CLASS ORGANISATION
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21
Q

What are the 5 benefits of being an RICS member?

A
  1. Status - your professional credentials provide unrivalled client confidence
  2. Recognition – Promotion of your professional excellence to governments and markets
  3. Market advantage – RICS status and standards gives you a competitive advantage.
  4. Knowledge – International practice standards, professional guidance, CPD and knowledge sharing
  5. Network – Access to professional worldwide
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22
Q

What major challenges do the RICS face?

A
  1. Women in property – RICS launched first Women in Surveying Insight Report in July 2023. Looked at challenges such as discrimination, bias and inequity. In UK and Ireland, women represent 17% of RICS members.
  2. Sustainability – built environment accounts for around 40% of global carbon emissions. RICS Sustainability Report 2022. RICS Value the Planet Campaign (aims to help implement UN Sustainable Development Goals)
  3. Fire Safety – fire safety in buildings and external wall systems. UK Fire Safety conference in November 2023 on building safety and EWS1. Fire Safety Act 2021, Building Safety Act 2022, Fire Safety Regulations 2022. RICS published professional statement on ‘Valuation approach for properties in multi-storey, multi-occupancy residential buildings with cladding’ in 2022.
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23
Q

FOUR Requirements for registration

A
  1. Firms providing surveying services to the public must register for regulation to ensure that there is a recognised quality benchmark for all firms.
    If there are no RICS members, a firm cannot register
  2. Regulation provides a ‘gold standard’ of quality control for clients
  3. Firms must annually make a return to the RICS confirming their compliance with their obligations
  4. A practice can be a corporate body (a company), a partnership, an LLP (Limited Liability Partnership (LLP) is a legal business structure that combines the flexibility of a partnership with the limited liability of a company) or a sole practitioner practice
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24
Q

RICS ‘Rules for the regulation of firms’ 2022

A
  • If 50% RICS members then it has to be regulated,
  • If at least 25% then it can apply to be regulated
  • Need a ‘Responsible Principal’ to ensure compliance
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25
Q

Information required by the RICS for Registration

A
  1. Type of business
  2. Name of the responsible principal
  3. Statutory regulated activities – such as for financial services
  4. Nature of clients
  5. Complaints handling procedure details and records
  6. Professional indemnity insurance details
  7. Whether the firm holds client’s money
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26
Q

When were the Rules of Conduct published?

A

Published October 2021, effective 2nd February 2022.

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27
Q

What do the Rules of Conduct do?

A
  • Promoting and enforcing the highest ethical standards in valuation, the development and management of land, real estate, construction and infrastructure.
  • Global basis.
  • They apply to both members and firms.
  • They replace the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards.
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28
Q

Why do we have Rules of Conduct?

A

Sets out the standards of professional conduct and practice expected of RICS members and firms

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29
Q

Rule 1

A

Members and firms must be honest, act with integrity and comply with their personal obligations to RICS

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30
Q

Rule 2

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise

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31
Q

Rule 3

A

Members and firms must provide good quality and diligent service

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32
Q

Rule 4

A

Members and firms must treat others with respect and encourage diversity and inclusion

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33
Q

Rule 5

A

Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence

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34
Q

Three Professional Obligations for members?

A

RICS members must:
1. Comply with the CPD requirements set by RICS
2. Cooperate with RICS
3. Provide all information reasonably requested by the Standards and Regulation Board

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35
Q

SEVEN Professional obligations for firms (Appendix to Rules of Conduct)

A
  1. Publish a CHP and maintain a complaints log
  2. Appropriate PII cover
  3. If having a sole principle, make appropriate arrangements for their professional work to continue in the event of their incapacity, death or absence from work
  4. Cooperate with RICS
  5. Provide all information requested by the Standards and Regulation Board,
  6. Display on their business literature, in accordance with RICS’ published policy on designation, a designation to denote that they are regulated by the RICS
  7. Report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
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36
Q

Why have the Rules of Conduct been updated?

A
  • Provide one clear framework
  • Provide clear examples alongside each rule.
  • Focus on respect, diversity and inclusion.
  • Understand evolving technology.
  • Tackling global challenges such as sustainable development.
  • To respond to new risks and challenges.
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37
Q

What is the ethics decision tree?

A

Provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation

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38
Q

Why is it important to regulate the surveying profession?

A
  • To protect the public
  • Uphold confidence in the profession
  • Uphold professional standards
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39
Q

Who undertakes disciplinary procedure?

A

Undertaken by the Standards and Regulation Board

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40
Q

What is the guidance on disciplinary procedure?

A

RICS Regulatory Tribunal Rules 2022

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41
Q

What is the guidance for the regulatory approach?

A

RICS Regulatory Decision Making 2022 provides an outline of the regulatory approach by RICS of regulated members, non-members and firms

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42
Q

Action by a Disciplinary Panel

A

Use for serious breaches of conduct

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43
Q

What are the penalties available to a Regulatory Tribunal Disciplinary Panel?

A
  1. Issue a Regularity Compliance Order (as above)
  2. Reprimand
  3. Fine
  4. Impose an unlimited amount of fine
  5. Impose conditions upon future continued RICS registration
  6. Expulsion
  7. Require publication of the results of the hearing
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44
Q

What is the associated guidance with use of social media?

A

Regualtion: Use of social media: guidance for RICS members 2021

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45
Q

What does the guidance on social media state?

A

RICS is likely to investigate concerns about social media posts where they involve:
1. Discrimination
2. Dishonesty
3. Abusive or threatening behaviour
4. Bullying/harassment
5. A pattern of frequent or a large number of concerning communications
6. Ignoring previous advice or warnings about concerns

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46
Q

When is the RICS unlikely to investigate social media posts?

A

RICS notes that it is unlikely to investigate social media posts which:
* Are critical of an organisation, its policies and performance, rather than individuals
* Use professional and respectful language

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47
Q

What is the latest on Professional Standards?

A
  • The RICS is in the process of re-categorising all current PS and GN to become Professional Standards
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48
Q

What is a Professional Standard?

A
  • ‘Set requirements or expectations about how they provide services or outcome of their actions’
  • Mandatory requirements, use the word ‘must’ and these must be complied with
  • Recommended practice uses the word ‘should’
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49
Q

What is an RICS Practice Information?

A

Information to support the
- practice,
- knowledge and
- performance of RICS members and regulated firms

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50
Q

What are examples of practice information?

A

These can include but are not limited to:
- good practice,
- information,
- insights of processes

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51
Q

What must be included in ToE?

A
  1. clients agreement to proposed fee basis
  2. agreement of payments of expenses
  3. copy of CHP can be available upon request
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52
Q

What do you know about fee negotiations?

A
  • Avoid price fixing
  • Market-based and agreed on an ad-hoc basis.
  • Consider level of service when negotiating.
  • Be completely transparent (e.g., if a referral fee is involved).
  • Consider the Bribery Act 2010 and the RICS Rules of Conduct.
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53
Q

What is the relevant guidance on granting and receiving referral fees?

A

Bribery Act 2010 and the RICS Rules of Conduct 2021

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54
Q

When agreeing fees what should be considered?

A
  1. Time
  2. Cost
  3. Quality
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55
Q

THREE steps of Terms of Engagement

A
  1. Competent
  2. No conflicts of interest or personal interest
  3. Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction
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56
Q

Why might you decline an instruction?

A
  1. Not competent
  2. Insufficient facts
  3. The client won’t sign ToE or complete AML checks
  4. Conflict of Interest
  5. PII liability cap cannot be agreed
  6. The advice is for a friends or on a pro bono basis and your PPI cover does not cover work done on a personal basis
  7. The potential client is included in the UK governments sanctions list
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57
Q

What is a conflict of interest?

A

Arises when a member of firms independence and impartially is threatened due to the existence of conflict between two client.

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58
Q

Conflict avoidance v conflict management (‘No v Yes’)

A
  • A conflict avoidance = do not accept the instruction
  • Conflict management = instruction is accepted, and steps are agreed and put in place to manage the conflict, with the written agreement of all parties
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59
Q

What is the RICS Guidance on Conflicts?

A

RICS Global Professional Standard: Conflicts of Interest 2017

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60
Q

What does the guidance on conflicts state?

A
  • 3 types of conflict:
  • “Informed consent” must be given
  • Must be in best interest of all parties and legal.
  • All conflicts must be managed in accordance with the Professional Standard
  • All firms must keep records to show their compliance with the Standard
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61
Q

What is informed consent?

A
  • This can only by given in writing
  • Need to be transparent about any material factors
  • Only seek informed consent if satisfied that all relevant parties are best served by doing so
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62
Q

What 2 things do you consider when managing a conflict?

A
  • Transparency
  • Openness
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63
Q

What are the 3 steps of handling a conflict of interest?

A

Steps:
1. Conflict avoidance
* Consider whether the conflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be properly managed maintaining transparency and openness
2. Written advice to both parties
* Disclose the nature of the conflict and how you propose to manage it
* Be clear – so parties can make informed decisions
* Request written consent
3. Conflict management
* Set up information batter

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64
Q

How should information barriers be operated?

A
  • The barrier must be robust
  • Must be physically separated, preferably in different buildings, or different floors
  • There is a virtual IT barrier
  • Information should be securely stored
  • Keep a clear audit trail of the conflict check process
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65
Q

What is an personal/own interest conflict?

A
  • This arises when acting for a family member, a close business associate or someone with whom you have financia (‘connected person’)
  • You must not let a personal interest interfere with or influence your professional judgment.
  • Full transparency is required
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66
Q

What is client confidentiality?

A
  • RICS Byelaws state that client confidentiality must be maintained.
  • Permission to share information is needed unless under investigation.
  • Files must be held for a minimum of 6 years before disposal.
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67
Q

What would you do if you overheard confidential information?

A
  • Cannot be used for own purposes, info disposed of securely.
  • Client must be notified of error and matter recorded.
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68
Q

What does the RICS state regarding the CHP?

A
  • Firms must have a published complaints handling procedure (CHP) that meets the requirements of the RICS Rules of Conduct 2021.
  • CHP needs to be in ToE
  • Need to notify your PPI insurers if there is a claim for negligence
  • A complaints log must be maintained t
  • Firm must include an RICS approver Alternative Dispute Resolution (ADR) mechanism in their CHP.
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69
Q

What must be detailed in the complaints log?

A
  • details,
  • progress and
  • outcome of any complaints
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70
Q

What is the first thing you do when there is a complaint?

A

Notify PI insurers and CHP must be approved by the RICS.
Whenever the firm receives a complaint from who they owe a duty of care.

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71
Q

What is stage 1 on CHP?

A

STAGE 1 – In House
1. CHP details issued,
2. clear procedure,
3. complaints handling officer,
4. submitted in writing.

Acknowledged within 7 DAYS and Investigated within 28 DAYS.

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72
Q

What is CBREs CHP timeframes?

A

Acknowledged within 5 DAYS and Investigated within 20 DAYS

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73
Q

What is stage 2 of CHP?

A

STAGE 2 – ADR, 3rd Party
* If unresolved, an appropriate redress mechanism must be provided such as the** Property Redress Scheme** and the RICS Dispute Resolution Service.

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74
Q

Whats included in CBRE ToB

A
  • Charges and expenses
  • Payment of fees
  • CHP
  • Liability
  • Termination
  • Money laundering and sanction regulations
  • Processing of data
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75
Q

What are the 6 types of ADR?

A
  1. Negotiation
  2. Mediation – neutral mediator – facilitates discussions between parties.
  3. Early neutral evaluation – independent, non-binding opinion
  4. Ombudsman – confidentially receive case details and instigates resolution of complaint.
  5. Arbitration(Arbitration Act 1996)
  6. Independent Expert Determination (RICS Guidance Note 2016)
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76
Q

What are the FOUR requirements of CPD?

A
  1. Min 20 hours CPD in a calendar year
  2. at least 10 must comprise Formal CPD.
  3. Must maintain current understanding of RICS Rules of Conduct during a rolling 3-year period
  4. All member much record their CPD activity using the RICS CPD management system
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77
Q

What is the difference between formal and informal learning

A

Formal
- Structured learning
Informal
- Self-managed learning

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78
Q

Why would there be a negligence claim?

A
  • Duty of care is breached
  • Claim for damages arises
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79
Q

What is the Statutory Compliance for setting up a new practice? (NINE)

A
  1. Disclose business name.
  2. Equality Act 2010, Financial services Act 2012, Bribery Act 2010.
  3. Money Laundering Regulation 2007 – appoint Money laundering officer
  4. Health and Safety Compliance - Health & Safety Act 1974, Control of Asbestos Regulations 2012.
  5. Fire safety compliance, - Fire Safety Act 2021
  6. Register for data protection - GDPR 2016 and Data Protection Act 2018 compliance.
  7. Inform HMRC – VAT threshold = £90k per annum.
  8. Compliance with current employment law.
  9. Ensure insurance compliance for employer and public liability
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80
Q

How to avoid negligence?

A
  • Understand the clients objectives
  • Confirm scope Terms of Engagement
  • Ensure you are competent
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation
  • Cap the professional liability excess on your PII policy in the terms of engagement
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81
Q

What is the Limitation Act 1980?

A

Limits the time period for legal action to be taken against debtors and for breaches of the law.

  • Contract - 6 years from date of negligent act / 3 years from date of knowledge / 15 years long stop date.
  • Tort – 6 years from the date the claimant suffered the loss.
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82
Q

What is Professional Indemnity Insurance?

A
  • To protect clients, surveyors and third parties against negligence claims when their duty of care is breached and a claim for damages arises
  • appropriate level of insurance is in place
  • All policies must be underwritten by an RICS approved insurer, as found on the RICS website
  • Mandatory for surveyors working in practice
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83
Q

What is the RICS compliance on closing a practice?

A
  1. Inform the RICS of your closure and deregister
  2. Inform clients and hand over to a new firm
  3. Return any monies held by client to their own accounts
  4. Inform insurers and procure PII run-off cover for a minimum of 6 years
  5. Retain a copy if the client files and records for a minimum of 6 years.
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84
Q

What is the RICS guidance on Professional Indemnity Insurance?

A

RICS Regulation: RICS Professional Indemnity Insurance Requirements 2022

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85
Q

What does RICS Professional Indemnity Insurance Requirements April 2022 state?

A
  • An appropriate level of insurance is in place for each instruction
  • Consideration on potential liabilities which may exist
  • All policies must be underwritten by an RICS approved insurer, as found on the RICS website
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86
Q

Minimum requirements of PII based on turnover include

A
87
Q

maximum level of uninsured excess required by RICS is:

A
88
Q

What needs to be considered when basing requirements of PII cover?

A
  • Their likely risk profile to negligence claims when deciding on their levels of insurance needed
  • If it is a new business, estimate the turnover and adjust accordingly
89
Q

What else should you know about PII cover?

A
  • The PII certificate to be sent to the RICS on an annual basis
  • Early notification to firm’s insurers is required when a potential claim arises
90
Q

What is Run-off cover following cessation of trading?

A
  • protects businesses and individuals from claims made after they have stopped trading
  • A minimum of £1m of aggregate cover over period of 6 years
  • Most firms aim to cap their liability with clients for individual instructions
91
Q

What is the guidance on Liability caps?

A

RICS Practice Information – Risk, Liability, and Insurance 2021

92
Q

What does the guidance on liability caps state?

A
  • Use of liability caps to manage risks associated with professional work
  • Be aware of third-party reliance
  • Ensure that only those stated in the report can rely upon the information
93
Q

What is the guidance on handling clients money?

A

RICS Professional Standard: Client Money Handling, 2019

94
Q

What are the SIX areas of ‘Client Money Handling, 2019’

A
  1. Holding client money
  2. Providing information to clients
  3. Receipt of client money
  4. Payments of client accounts
  5. Accounting records sand controls
  6. Compliance
95
Q

What procedure do chartered surveyors need to be aware of when handling clients money?

A
  • Keep accounts separate / identifiable (use word “client”).
  • Client must have monies on demand.
  • Money only to be withdrawn if properly required.
  • Keep accurate records.
96
Q

What is the RICS compliance when setting up a new practise? (NINE)

A
  1. Inform RICS
  2. Appoint ‘Responsible Principal’ for all communication
  3. Register with RICS regulatory board.
  4. PII and CHP details to RICS.
  5. Procedures for client money handling.
  6. Complaints Handling Officer and log.
  7. Comply with use of RICS logo.
  8. Succession plan.
  9. CPD logged and RICS annual return completed.
97
Q

What is the key legislation on gifts and bribery?

A

Bribery Act 2010 -
* Aims to reduce bribery in business in UK and abroad

98
Q

What is hospitality?

A
  • Hospitality which seeks to genuinely promote and improve the image of a firm is an acceptable
  • key part of doing business
  • and registered, if required, by the Firm in accordance with their anti-bribery procedures
99
Q

What is CBRE’s gift policy?

A
  • All gifts must be reported on Gifts and Hospitality Declaration Form.
  • As a general rule, employees can give/accept gifts or events tickets up to the value of £100 per person.
  • The gifts cannot be cash, cannot be in a manner that can influence a decision (e.g. if we are pitching for business).
  • If unsure, you must consult the Compliance Director before accepting or making offers.
  • CBRE Compliance Director is Geraldine Mash.
  • Excessive gifts can be seen a conflict of interest, or bribe.
100
Q

What considerations did you have when offered a gift?

A
  • Is gift prohibited by law?
  • Could it be interpreted as a bribe?
  • Could it influence business decision?
  • How would it be perceived if publicly disclosed?
101
Q

What is a bribe?

A
  • The giving or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust
  • Certain forms of lavish corporate entertainment can be classed as bribery.
102
Q

What is accepted in terms of gifts/hospoitality?

A
  • Government guidance states that hospitality is not prohibited by the Act.
  • It states that offering a client reasonable and proportionate hospitality will not constitute an offence
  • such as a ticket to a major sporting event and taking clients for meals as long as this is accurately recorded in a gift hospitality register.
103
Q

What are the SIX principles of the Bribery Act 2010?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
104
Q

Can you expand on any of the principles of the bribery act?

A

Top-level commitment
Top-level management should be committed to preventing bribery
Risk assessment
Organizations should assess the risks of bribery from both internal and external sources
Due diligence
Organizations should apply due diligence procedures to individuals who work for them, taking into account the risks involved
Communication
Organizations should ensure that their bribery prevention policies and procedures are understood by everyone in the organization
Monitoring and review
Organizations should monitor and review their bribery prevention procedures and make improvements where necessary

105
Q

What are the FOUR offences relating to bribery?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent a bribery
106
Q

What are the penalties of bribes?

A
  • If this Act is breached, there is a maximum penalty of 10 years imprisonment and/or an unlimited fine for individuals; companies face an unlimited fine
  • The Bribery Act is policed by the Serious Fraud Office
107
Q

Are companies responsible for employees corrupt acts?

A
  • Yes.
  • Unless the company can show they had adequate policies/procedures in place to combat bribery.
108
Q

What is the RICS Guidance on money laundering?

A

Terrorist Financing and Transfer of Funds Regulations 2017

109
Q

What are the key provisions of the regulation within the Money Laundering, Terrorist financing and Transfer of Funds Regulations, 2017? (UK LAW)

A
  1. Need a written money laundering and terrorist financing risk assessment
  2. Implement systems to address money laundering
  3. Adopt appropriate internal controls
  4. Staff training
  5. Comply with new customer, enhanced and simplified due diligence requirements
  6. Comply with the requirements relating to politically exposed persons (PEPs)
  7. Ensure appropriate record keeping
  8. AML checks to confirm the identity of the proposed purchaser and check the purchaser’s source of funds
  9. To include additional high-risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring in certain cases eg when there are transactions between parties based in high-risk third countries
110
Q

What is money laundering?

A

Proceeds of criminal activities are disguised or converted and then realised as legitimate assets

111
Q

What are the two types of due diligence?

A

Customer DD
Enhanced DD

112
Q

What is customer DD?

A
  • Identify the client and verify their identify
  • Obtain information on the purpose and intended nature of the business relationship
  • Proposed funding arrangements as appropriate
113
Q

What are the different levels of DD needed for?

A

Money laundering caution

114
Q

What is enhanced DD?

A
  • More detailed examination of the background and purpose of the transaction and increased monitoring
  • Additional procedures for a ‘high risk third country’ or a ‘politically exposed person (PEP) or a PEP family member/business associate
  • A PEP is a term describing someone who has been entrusted with a prominent public function
  • A PEP generally presents a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.
115
Q

what are the penalties of money laundering?

A

If failure to comply with regulations?
* Maximum sentence of 14 years and/or unlimited fine for doing.
* Maximum sentence of 5 years and/or unlimited fine for assisting.

116
Q

What are typical money laundering checks?

A
  • Public Ltd Company – London Stock Exchange Listing
  • Publicly Accountable Body – Government Ownership Control
  • Private Limited Company – Certificate of Incorp. Full Name and ID.
  • Private Individual – Passport driving licence/bank statement/3 months.
117
Q

What are some red flags to consider with regard to money laundering?

A
  1. Unwillingness of parties to provide identity documents
  2. Changes to parties involved in transactions
  3. Unusual transaction features, such as urgency required by parties, p
  4. Unusual currencies
118
Q

UK Government Sanctions
Anti-money laundering sanctions update March 2022

A
  • Consider risks to AML policy, e.g., sanction lists contain UK citizens.
  • Use software as part of DD if a firm is more likely to engage with high-risk clients or assets.
  • HM Treasury’s ‘consolidated list’, MLRO will have access.
  • Office of Financial Sanctions Implementation (OFSI) for assistance.
119
Q

What three main areas are stated as an offence in the Proceeds of Crime Act 2022?

A

3 main areas of offence:
1. Concealing criminal property;
2. Arrangements; - facilitates criminal property for a person
3. Acquisition use and possession of criminal property

120
Q

What is the guidance on bribery and money laundering?

A

RICS Professional Statement: Countering bribery, corruption, money laundering and terrorist financing 2019

121
Q

What does RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019 state?

A

It is divided into 3 parts:
1. Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorism
2. Guidance setting out supporting good practise for the above
3. Supplementary guidance on some of the concepts set out in parts 1 and 2

122
Q

What is the regulation on bribery and corruption?

A

RICS Professional Standard: Countering bribery, corruption, money laundering and terrorist financing 2019
This sets out the mandatory requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing

123
Q

What does Part 1 - Bribery and Corruption state?

A

RICS firms must:
- Report suspicion
- Not offer or accept anything that could constitute a bribe
- Have procedures in place to comply with the law
- Act with due diligence to review risks
- Retain records to show that the firm has met the requirements of this Professional Statement

124
Q

What does Part 1 - Money Laundering and terrorist financing state?

A

RICS firms must:
- Not facilitate or be complicit in ML and TF
- Take appropriate measures to understand the client and the purpose of the instruction
- Have systems in place to comply with the laws
- Report suspicion
- Evaluate and review the risks
- Verify the client by undertaking basic ID checks

125
Q

What does Part 2 state? (Countering bribery…)

A

Practical guidance provided such as
- Written policy in place
- Setup a gifts register
- Encourage transparency
- Keep up to date with the legislation

126
Q

What does Part 3 state? (Countering bribery…)

A

Provided on a range of issues including:
1. Establishing a ‘risk-based approach’:
2. WHO you act for
3. WHAT you are doing
4. WHY you are being asked to do something
- Dealing with politically exposed persons (PEPs): they are higher risk as they hold positions of influence and enhanced due diligence is required
The need to identify the beneficial ownership of a company, partnership or trust – such as by requesting a recent Certificate of Incorporation or Annual Return for a company

127
Q

What is the purpose of professional indemnity insurance?

A
  • To protect clients and yourself when a duty of care is breached
  • when claims for damages arise
128
Q

How long should you store valuation files for? Why?

A
129
Q

What is the purpose of ToE?

A
  • provide clarity with client
  • protection in terms of PII
  • helps to ensure good level of service is met
130
Q

What would you do if you carried out a large loan security valuation and the customer sent you a case of Champagne?

A
  • Under CBRE RISE values of ‘Integrity’, there is guidance on gifts.
  • Excessive gifts can be seen a conflict of interest, or bribe.
  • All gifts must be reported on Gifts and Hospitality Declaration Form.
  • As a general rule, employees can give/accept gifts or events tickets up to the value of £100 per person.
131
Q

If unsure about a gift what would you do?

A
  • If unsure, you must consult the Compliance Director before accepting or making offers. CBRE Compliance Director is Geraldine Mash.
132
Q

What questions would you ask yourself regarding gifts?

A

Is gift prohibited by law?
Could it be interpreted as a bribe?
Could it influence business decision?
How would it be perceived if publicly disclosed?

133
Q

How do you carry out AML checks? Why is this important?

A
134
Q

What is the difference between ToE and ToB?

A

Terms of business are the general terms and conditions for a company’s operations,
while terms of engagement are the conditions for a specific engagement

135
Q

What might you find in terms of business?

A
  • Payment of fees
  • Liability
  • Money Laundering and sanction regulations
  • Charges and expenses
136
Q

What is the importance of the RICS Rules of Conduct?

A

Promotes the highest ethical standards
- They are based on ethical principles of:
Honesty and Integrity
Competence
Service
Respect
Responsibility

Apply to both members and firms

137
Q

Why were the Rules of Conduct updated?

A
  • To respond to new risks and challenges.
  • To provide one clear framework – simpler structure to provide confidence for clients and the public.
  • Clear examples alongside each rule.
  • Focus on respect, diversity and inclusion.
  • Evolving technology.
  • Tackling global challenges such as sustainable development.
138
Q

What are the implications of contravening?

A

Caution
Fine
Expulsion (taking bribes)

139
Q

What is the guidance on Rules of Conduct?

A

RICS Rules of Conduct 2021

140
Q

Rule 3

A

Members and firms must provide good-quality and diligent service.

141
Q

What is your company’s PII?

A

Confidential

142
Q

What is the RICS Complaints Handling pricedure?

A

Respond within 7 days
Investigate within 28 days

143
Q

For loan security purposes who do you run a conflict of interest check on?

A

Lender and borrower

144
Q

For loan security purposes who do you run a conflict of interest check on?

A

Lender and borrower

145
Q

Conflict check on client?

A
146
Q

Have you ever signed an NDA?

A

No
Company policy only E.D’s can

147
Q

Have you ever signed an NDA?

A

No
Company policy only E.D’s can

148
Q

How did you meet clients expectations? Valuation Example
Rule 4&5?

A

Rule 4 – Respect
- Respect the client’s expectations and I responded to their queries in a timely manner.

Rule 5 – responsibility
- Acted responsibly by undertaking a thorough due diligence process, as this could materially impact value.
- I ensured that these were peer reviewed by my supervisor.

149
Q

How did you meet clients expectations? Valuation Example
Rule 3?

A

Rule 3 – Service
- Met the scope of works within ToE
- Kept to timeframes
- Constant communication
- I made my client aware that I was a trainee working alongside a RICS Registered Valuer who would oversee the valuation.

150
Q

How did you meet clients expectations? Valuation Example
Rule 1 & 2?

A

Rule 1 – Honesty
- Ensure no conflicts before taking on an instruction

Rule 2 – Competent
- Ensure SUK
- Thoroughly reviewed work by directors to ensure highest quality

151
Q

What things does the ethics decision tree consider?

A
  • Facts
  • Is it legal?
  • In line with Rules of Conduct?
  • Clear reasoning?
  • Informed Decision?
  • Content if actions made public?

If all Yes = ACT
If No = Decline

152
Q

What is the ethics decision tree?

A
  1. Providing a decision-making framework to deal with ethical dilemmas.
  2. Framework of questions for members to ask themselves when facing a situation.
  3. Encourages consistency with the Rules of Conduct.
153
Q

What is CBRE’s CHP?

A
  1. Receive the complaint
  2. 5 days to acknowledge and respond with the case officer.
  3. 20 days to investigate and respond with a final management decision letter.
  4. If the client is unhappy the client may take the complaint to an external complaint handling.
  5. CBRE recommend Property Redress Scheme or the Centre for Effective Dispute Resolution.
154
Q

What must a firm have with regard to CHP?

A
  1. CHP in place
  2. Redress system
  3. Complaints Handling Officer
  4. Complaints Handling Log
155
Q

What is Stage 2 of CHP?

A

Alternative Dispute Resolution Service
- If unresolved, an appropriate redress mechanism must be provided such as the Property Redress Scheme and the RICS Dispute Resolution Service.

156
Q

What are CBRE’s timescales?

A

Acknowledged within 5 days
Investigated within 20 days

157
Q

What is Stage 1 of the process?

A

Stage One (in-House)
1. Details of CHP should be issued when the firm receives a complaint from a valid complainant to whom the firm owes a duty of care.
2. Procedure must be quick, clear, transparent and impartial.
3. Details of Complaints Handling Officer must be stated
4. Complaints must be made in writing.
5. Timescales of the complaint must be recorded

158
Q

Describe a Complaints Handling Procedure

A
  1. Needs to be approved by RICS
  2. Notify PII insurers if claim as it could lead to a claim for negligence
  3. Must be issued at same time as Terms of Business
  4. Tracked in a complains log (Details, Progress and Outcome)
  5. Must include an approved Alternative Dispute Resolution (ADR) mechanism
159
Q

What is the guidance on Complaints Handling?

A

RICS Professional Standard ‘Complaints Handling’ (2016)

160
Q

Salient points of Risk, Liability and Insurance?

A
  • Recommends the use of liability caps to manage risks associated with professional work.
161
Q

What is the guidance on liability caps?

A

RICS Guidance Note on ‘Risk, Liability and Insurance’ (April 2021)

162
Q

What is Run off cover?

A

Cover following the cessation of trading
Min. £1m of aggregate cover
Over 6 year (RICS run-off pool)

163
Q

What is the guidance on PII?

A

RICS Regulation ‘Professional Indemnity Insurance Requirements’ (Feb 2022)

164
Q

What is Professional Indemnity Insurance?

A

Protects against negligence claims when duty of care is breached
And claims for damages arise

165
Q

Example of how you adhered to Rule 5?

A

Risk assessment
Ensuring correct PPE
Complying with regulations
Responding to complaints in a timely manner

166
Q

Example of how you adhered to Rule 4?

A

Working cooperatively with others
Attending DE and I initiatives – not discriminating

167
Q

How did adhering to the RICS Rules of Conduct help you to meet clients expectations?

A
  • I was competent to undertake the work
  • Agreed ToE with clear time frames
  • Work was completed on time
  • Clear communication
  • Complied with regulations
168
Q

Example of how you adhered to Rule 3?

A
  • Agree scope of work through ToE and keeping to them
  • Working to timeframes
  • Clear communication with client
  • Measure client’s satisfaction through achieving KPIs, review against objectives and clear communication
169
Q

Example of how you adhered to Rule 1?

A
  • Identifying conflicts of interest and managing it
  • Not allowing myself to be bribed or influenced by gifts
170
Q

Why were the Rules of Conduct updated?

A
  • To respond to new risks and challenges.
  • To provide one clear framework – simpler structure to provide confidence for clients and the public.
  • Clear examples alongside each rule.
  • Focus on respect, diversity and inclusion.
  • Evolving technology.
  • Tackling global challenges such as sustainable development.
171
Q

How do you treat others with respect?

A
  1. Value everyone’s contributions
  2. Practice active listening
  3. Use inclusive language ie gender neutral language.
  4. Be mindful of your tone: Communicate with a respectful and professional tone.
  5. Address conflicts constructively
  6. Promote diversity and inclusion
172
Q

How do you promote diversity and inclusion in the work place?

A
  1. Act like a role model
    Demonstrating inclusive behaviours and hold other accountable
  2. Training
    Unconscious bias and inclusive communication
  3. Celebrate diversity
    Participate in cultural festivities or attend neuro-diversity sessions
  4. Challenge stereotypes
173
Q

What does an inclusive/diverse workplace look like?

A

Workplace where everyone feels respected, regardless of their background, gender, race, religion, or sexual orientation.

174
Q

How are you adhering to the Rules of Conduct through ‘Subject to Contract’?

A

Rule 3
- High level of service to my client and protecting their interests
-It allows me to conduct due diligence and ensure that all the terms of the deal are satisfactory before committing to a legally binding agreement.

**Rule 5- responsibility **
Acting responsibly to protect my client’s position for example when rent reviews

It promotes transparency in real estate transactions
This can help to avoid misunderstandings and disputes later on.

175
Q

What does ‘without prejudice mean’?

A

During negotiations, the opposing party cannot rely upon any documentation which are labelled ‘Without Prejudice’…

…where representations made in litigation to a judicial body.

The information is therefore ‘privileged’

176
Q

How are you adhering to the Rules of Conduct through ‘Subject to Contract’?

A

Rule 1 – Honesty
Promotes open and honest communication between parties

Rule 3 – Service
- Protects my clients interests
-It allows me to conduct due diligence and ensure that all the terms of the deal are satisfactory before committing to a legally binding agreement.

Rule 5- responsibility
Acting responsibly to protect my client’s position for example when rent reviews

**Transparency and clarity **
This can help to avoid misunderstandings and disputes later on.

177
Q

What is your level 2 example?

A

Valuation of PBSA Scheme (Market Square House)

178
Q

How did you determine there was no conflict?

A
  • Checked on our internal system
  • No conflict
179
Q

When would you consider conflict management?

A

If it can be properly managed maintaining TRANSPARENCY and OPENNESS.

180
Q

What THREE things must be included in a ToE?

A
  1. Clients’ agreement to fee basis
  2. Payment of expenses
  3. Copy of firms CHP
181
Q

What 3 steps should be followed before starting an instruction?

A
  1. Check professionally competent.
  2. No conflicts of interest or personal interest
  3. Confirm ToE and get written approval from client, BEFORE working on instruction.
182
Q

What was included in your ToE? (Example)

A
  1. Scope of works
  2. The property
  3. Valuers
  4. CoI
  5. Status of the valuer
  6. Purpose and basis of valuation
  7. Valuation date and timescales
  8. ESG and sustainability
  9. Reliance
  10. Liability agreement (lower of 24% of value or £20,000,000)
  11. Fees
  12. Valuation standard terms of business
183
Q

Why did you maintain strict confientiality?

A

The RICS bye-laws state that ‘client confidentiality must be maintained for all client affairs’

RoC - Rule 3, 4 & 5

184
Q

What is the difference between ToE and ToB?

A

Terms of business are a set of standard terms that apply to all engagements, while terms of engagement are a document that outlines the terms and conditions of a specific engagement

185
Q

How did you maintain strict confidentiality with the Gas Lane example?

A
  • Confidential documents were clearly classified
  • Strong passwords, and firewalls for confidential data
  • Limited access to those only involved in the valuation
186
Q

Why is transactional data confidential?

A
  1. Ensures they have a competitive advantage
  2. Proprietary Information
    Pricing models and strategies often involve proprietary information, such as cost structures, profit margins, and pricing algorithms.
  3. Negotiating leverage
187
Q

In the Gas Lane example how did you ensure everything remained classified?

A
  1. Password protected files
  2. Secure networks – VPN
  3. Titled confidential
  4. Limited access to files
  5. Did not discuss to anyone not involved
188
Q

How was your example at Gas Lane in line with RoC?

A

Rule 3 – Service
I provided a quality of service to my client by keeping their information confidential

Rule 4 – Respect
I respected the confidential nature of my clients transactional data

189
Q

Quarterly Accounts Valuation of PBSA, Dublin

A

Montrose (Yield pressure)

190
Q

How did you act ethically in the Dublin example?

A
  1. I did not secome to the pressure of my client
  2. I acted with integrity, objectivity and independence.
191
Q

How did you act in line with RoC for Dublin?

A

Rule 1 – Honesty and Integrity
I acted honestly and with integrity and adhered to my professional obligations as an RICS surveyor

Rule 3 – Service
I provided good quality service showing true valuations

Rule 5 – Responsibility
I acted responsibly without bribe, ensuring I maintained public confidence in the profession

192
Q

What other guidance were you following for Dublin example?

A

Red Book Global
PS 2 Ethics, competency, objectivity and disclosures
States:
‘must always act in a professional and ethical manner free from any undue influence, bias or conflict of interest.’

193
Q

What is PS2 of RICS Valuation - Global Standards (‘Red Book’) (2022)

A

Ethics, competency, objectivity and disclosures

194
Q

Co-living Valuation, Battersea

A

Folk - (Conflict management)

195
Q

How did you do a Conflict of Interest check?

A
  1. Internal system dating back at least 10 years
  2. Property address highlighted that it had been valued for another client
196
Q

What type of conflict was Folk?

A

Party conflict

197
Q

How did you determine there was no conflict? (Folk)

A
  1. CBRE had previously valued the site for accounting purposes
  2. We do not consider it a CoI because…
    - It was for a different purpose
    - Different personnel working on the instruction
    We informed both parties who confirmed in writing they were happy for us to proceed
198
Q

What is an information barrier?

A

A safeguard designed to prevent the flow of confidential information between different departments or individuals within an organization.

199
Q

How did you incorporate an information barrier?

A
  1. Robust enough to ensure no information passing
  2. ‘reasonable steps’ to operate an effective barrier
  3. Physical separation - different buildings or different floor
  4. Virtual IT barrier
  5. Clear audit trail of conflict check process and all communication
200
Q
A
201
Q

What 9 key provisions are included in the Terrorist Financing Regulation?

A
  1. Have a written money laundering and terrorist financing risk assessment.
  2. Implement systems and policies to address money laundering and terrorist financing risks.
  3. Adopt internal controls
  4. Provide staff training
  5. Customer and enhnaced DD
  6. Ensure record keeping, policies and procedures.
  7. AML checks must be undertaken to confirm identity of proposed purchaser and check source of funds.
  8. Include high-risk factors when assessing need for enhanced due diligence e.g. when transactions are based in high-risk third countries.
202
Q

What can firms do to prevent money laundering?

A
  • Have group-wide procedures and training on prevent money laundering and terrorist financing risks.
203
Q

What are typical money laundering checks?

A
  • Public Ltd Company – London Stock Exchange Listing
  • Publicly Accountable Body – Government Ownership Control
  • Private Limited Company – Certificate of Incorp. Full Name and ID.
  • Private Individual – Passport driving licence/bank statement/3 months.
204
Q

What Regulation concerns Money Laundering?

A
  • Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (as amended in 2022).
  • UK has recently implemented 6th EU Anti Money Laundering Directive into the Regulations.
205
Q

What is the RICS Guidance on money laundering?

A

Terrorist Financing and Transfer of Funds Regulations 2017

206
Q

What is a responsible principal?

A

A Responsible Principal (RP) is a person within a regulated firm who ensures that the Royal Institution of Chartered Surveyors (RICS) professional, technical, and ethical standards are upheld.

207
Q

why is diversity key?

A

prevents group think

208
Q

In the Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (as amended in 2022), what is the limit of cash acceptance?

A

10,000 euros

209
Q

If asked about an AML check what would you consider?

A
  • Money laundering, terrorist financing and transfer of funds regulation 2017
  • RICS professional standard - law comes first
  • Due diligence procedures
  • Professional objectivity, openness and transparency
  • ‘Red Flags’
210
Q

If asked about bribery and hospitality, consider:

A
  • Bribery Act 2010
  • RICS professional standard
  • companies procedures
  • Proportionality
211
Q

Whos responsibility is it to take out run off cover?

A
  • Taken out for the firm
  • Individual surveyor to ensure that they are covered
212
Q

How did you manage the conflict?

A

Served a conflict of interest letter which stated
- who the parties were
- nature of the conflict
- methods in place to manage the conflict

213
Q

What are Estate Agents legal obligations with regard to money laundering?

A

Guidance: ‘Estate agency business guidance for money laundering supervision
Firms must have policies to identify and scrutinize transactions which are:
- complex or very large
- unusual patterns of transactions
- without apparent economic or legal purpose

214
Q

Other points of note with regard to money laundering?

A
  • limit of 10,000 euros cash
  • detailed record keeping
  • senior staff must be appointed to take responsibility
  • a firm must contain records of min. 5 years
    Nominated person (Money Laundering Reporting Officer) must be appointed to report any suspicions to National Crime Agency

Tilly Rees SoE (45 decks)

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