Ethics - lvl 1 Flashcards
Professional and Ethical Standards Decision Tree
- Questions to go through when you are asked to act in a potentially unethical manner or situation.
- Encourages members to consider legalities of actions and their consistency with RICS RoC
- Consult senior colleagues and have clear reasoning.
- If in doubt, phone RICS Regulation Confidential Hotline for ethical issue
Test: would you want decision to be made public?
What does good governance mean to you?
- Professionalism & Transparency: Ensuring clarity in governance structures, processes, and maintaining high standards.
- Trust & Resilience: Earning trust through transparent operations, acting in the public interest, and designing governance for long-term stability.
- Diversity & Inclusivity: Ensuring diverse representation and engaging all stakeholders in an open manner.
How do professional integrity and professional ethics differ?
- Professional Integrity: An individual’s consistent adherence to moral principles in their actions.
- Professional Ethics: Formal rules set by a profession dictating right and wrong behavior.
- Integrity is personal commitment, while ethics provides the framework.
What is the new maxim of RICS in relation to compliance?
Responsible Business
What do you understand by the term professional practice?
- Refers to the ethical and competence standards expected of its members.
- Ensure professionalism to protect consumers and businesses.
Why do you want to become a member of RICS?
- Regulation & Standards: Uphold and work to the highest industry standards.
- Professional Status: Recognized globally as a mark of professionalism.
- Knowledge & Expertise: Access to the latest industry research and news.
- Networking Opportunities: Connect with a global community of professionals.
- Training & Development: Continuous professional development resources.
- Career Advancement: Enhances employability and career prospects.
What are the key functions of RICS? x5
- Standards: Develops and enforces professional and ethical standards.
- Regulation: Regulates members and firms for compliance.
- Education: Accredits courses and offers member training.
- Research: Produces market surveys and guidance.
- Policy Engagement: Advocates for sustainable built environment policies.”
What is a Royal Charter?
RICS’ Charter: Granted by Queen Victoria in 1881, recognizing RICS as a professional body in the UK.
RICS’ Powers: Enables self-regulation and permits the appointment of a Governing Council.
Obligations: Directs RICS to foster the profession for public benefit.
Who is the current RICS president?
Ann Gray FRICS
Who is the current CEO of the RICS?
Justin Young
What are the levels of membership for the RICS?
- Graduate
- Assoc RICS
- Member RICS
- Fellowship RICS
What must you do to achieve FRICS status?
- Five or more years at MRICS
- Leadership role
- Professional/technical achievement
- Academic achievement or raising profile of RICS
What is the structure of the RICS?
Governing Council:
- Supreme governing body of RICS.
Sets RICS’s strategy, vision, and approves constitutional changes.
Oversees the RICS Board and the Standards and Regulation Board.
RICS Board:
- delivering the business plan
- overseeing operations
Professional Group Panels (To be established in 2023):
Result of Lord Bichard’s recommendation.
Six panels: Construction, Valuation, Commercial Property, Residential Property, Land and Natural Resources, and Building Surveying and Building Control.
Each panel will have a Chair, part of the Knowledge and Practice Committee.
World Regional Boards:
RICS’s global membership is divided into five regions.
Each board develops a strategy and business plan for its region.
Regions include: Asia Pacific, Europe, Middle East and Africa, and Americas.
Standards and Regulation Board:
- exclusive responsibility for RICS’ regulatory functions.
- Independently led, comprising both non-members and RICS members.
- Oversees professional standards,
- entry/admission to the profession,
- education/qualification standards,
- dispute resolution services, and
- the Regulatory Tribunal.
What is the SRB
The SRB focuses on the
- conduct and competence of RICS members,
- to set proportionate standards in the public interest and based on risk.
Its approach is to foster:
- a supportive atmosphere that encourages a strong, diverse, inclusive, effective and sustainable surveying profession
What do you understand by the term self-regulation?
RICS Role: A self-regulatory body under its Royal Charter ensuring public trust and maintaining professional standards.
SRB: Independently led board responsible for global regulatory strategy development and oversight.
Reports its activities and performance to the RICS’ Governing Council.
Can you tell me what you understand by the principles of better regulation? PACTT
- Proportionality – making penalty proportional to breach
- Accountability – to members and public
- Consistency – treating all members the same
- Targeting – serious breaches
- Transparency – to members, clients and public
What is a Bye-Law?
A list of laws applied internally using powers granted by the Royal Charter
Give an example of one of the RICS Bye-Laws.
- 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 - demonstrate the attainment of the appropriate Professional Competence to be admitted
- Chartered Members shall be entitled to use Designatory Initials or Designations
Explain to me the new RICS Rules of Conduct - what do they replace?
- promoting and enforcing the highest ethical standards in the RICS
- support positive change in the built and natural environments.
- Rules of Conduct for Members
- Rules of Conduct for Firms
- Global Professional and Ethical Standards
When do they take effect?
2 February 2022.
Who do they relate to?
The rules apply to all members and firms regulated by RICS, regardless of where they work or practice.
What are the 6 ethical principles that the Rules of Conduct are based on? HICSRR
Honesty
Integrity
Competence
Service
Respect
Responsibility
What are the 5 Rules?
Rule 1: Honesty and Integrity - Members and firms must be honest, act with integrity, and comply with their professional obligations.
Rule 2: Competence - Members and firms must maintain their professional competence.
Rule 3: Service- Members and firms must provide good-quality and diligent service.
Rule 4: Respect - Members and firms must treat others with respect and encourage diversity and inclusion.
Rule 5: Responsibility - Members and firms must act in the public interest and take responsibility for their actions.
Give me an example of rule 1
Always providing truthful information in reports and not misleading clients.
comply with their professional obligations and obligations to RICS
Avoid conflict of interest
Give me an example of rule 2
Members and firms only undertake work that they have the knowledge, skills, and resources to carry out competently.
Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills, and resources to do their tasks competently.
Members and firms check that subcontractors have the necessary knowledge, skills, and resources to do their tasks competently.
Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them, and are able to demonstrate they have done so.
Give me an example of rule 3
Members and firms understand clients’ needs and objectives before accepting any professional work.
Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.
Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.
Members and firms undertake their work in a timely manner; with due care, skill, and diligence, and in accordance with RICS technical standards.
Give me an example of rule 4
Members and firms respect the rights of others and treat others with courtesy.
Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds.
Members and firms do not bully, victimise, or harass anyone.
Members and firms work cooperatively with others.
Give me an example of rule 5
Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS, or any other appropriate person, body, or organization where they believe in good faith that it is necessary to do so.
Members and firms support directors, partners, employees, colleagues, or clients who have acted in good faith to report concerns.
Members and firms respond to complaints made against them promptly, openly, and professionally.
What are the core professional obligations of firms and members to RICS in the RoC?
For Members:
- Comply with the CPD requirements set by RICS.
- Cooperate with RICS.
- Promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
For Firms:
- Publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
- Ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.
- Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their incapacity, death, absence from, or inability to work.
- Display on their business literature, in accordance with RICS’ published policy on designations, a designation to denote that they are regulated by RICS.
- Report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
RICS Hierarchy of Publications:
- Rules of Conduct (for Firms and Members) (Mandatory)
- Global Standards (Mandatory)
- Professional Standard (Mandatory)
- Guidance Notes (Voluntary)
- Practice Information (Mandatory or Recommended Good Practice)
The RICS Red Book.
The RICS Red Book sets global standards for valuation practices, ensuring consistency, and transparency.
The RICS Black Book.
The RICS Black Book consolidates best practice guidelines for quantity surveying and construction, promoting consistency and professionalism in the industry.
Dicipline
What disciplinary procedures can the RICS impose?
- Fixed penalty notice
- Regulatory compliance order
- Refer matter to single member of Regulatory Tribunal
- Refer matter to a Disciplinary Panel.
Dicipline
In what circumstances can disciplinary procedures be imposed?
professional misconduct, Violated RICS standards, rules, or regulations.
outlined in the RICS Regulatory Tribunal Rules.
Most common breaches are ethical / professional behaviour, CPD, and client’s money.
Dicipline
When did RICS last update their disciplinary panel rules?
RICS Regulatory Tribunal Rules - 2 February 2022 - same as RoC
Dicipline
What are the different levels of action within these procedures?
- RICS investigates the complaint.
Less serious:
* Consent Order given if admitted.
* Possible fine or caution.
Not admitted but no hearing needed:
* Single Tribunal Member decides.
Most serious:
* Disciplinary Panel hearing.
* Outcomes range from fine to expulsion.
What can you tell me about RICS guidance relating to bribery, corruption or money laundering? CBCMLTF19
Countering bribery, corruption, money laundering and terrorist financing, 2019
What status does it hold? CBMLTF2019
RICS Professional Statement - Manadory
What are some of the key principles of this guidance?
Part 1:
Bribery and Corruption:
- No offering or acceptance of bribes.
- Implement procedures to adhere to the law.
- Report any suspicious activities to authorities.
- Conduct due diligence and regular risk evaluations in writing.
- Maintain records demonstrating compliance with the Professional Statement.
Money Laundering and Terrorist Financing:
- Do not facilitate or be involved in such activities.
- Establish systems to ensure legal compliance.
- Report any suspicions.
- Assess risks to the firm.
- Understand the client and the purpose of their instruction.
- Confirm client identity via ID checks.
- Keep records showing adherence to the Professional Statement.
Part 2:
Guidance:
* Draft a written policy for senior management oversight.
* Release a code of behavior for staff and offer training.
* Promote transparency.
* Create a register for gifts.
* Stay updated with relevant legislation.
Part 3:
Supplementary Guidance:
- Adopt a risk-based approach considering the client, the task, and the reason for the task.
- Handle politically exposed persons with enhanced due diligence.
- Identify the beneficial owner of entities like companies or trusts, possibly through annual returns.
ML
What is money laundering
Money laundering is where proceeds of crime are disguised or converted and then realised as legitimate assets.
ML
What money laundering regulations or legislation are you aware of?
The Money Laundering and Terrorist Financing (Amendment) Regulations:
* 2022:
Updates the 2017 Regulations.
Adds provisions on proliferation financing and beneficial owners.
- 2019:
Introduces requirements for:
Risk assessments.
System controls.
Customer due diligence measures.
Record keeping.
Reporting suspicious activity.
New definitions for:
“Cryptoasset exchange provider.”
“Custodian wallet provider.”
“Art market participant.”
Proceeds of Crime Act 2002:
Allows UK authorities to recover assets believed to be from crime proceeds.
Establishes criminal offences to combat money laundering.
ML
What are the penalties for being involved in money laundering?
- Maximum of 14 years in prison and / or unlimited fine for assisting in money laundering
- Maximum of 5 years and / or unlimited fine for not tipping off or not reporting suspicion of money laundering
ML
What is a red flag of money laundering?
- Inability / unwillingness to provide identity documents
- Changes to parties involved in transaction
- Unusual transaction features – unexpected urgency, potential loss-making, unusual transaction for a client
- Payment of fees or purchase costs in unusual currency
ML
What constitutes an offence under the current money laundering regulations?
Concealing: Hiding the origins of illegally obtained money.
Arranging: Helping someone obtain or use illegal funds.
Failure to Report: Not alerting authorities about suspected money laundering.
Tipping Off:Warning someone they’re being investigated.
Lack of Due Diligence: Not verifying client identities or monitoring business relationships.
ML
How long should you keep anti money laundering records for?
5 years
ML
Explain the implications of the Sanctions and Anti-Money Laundering Act 2018.
Provides Updated UK’s framework for sanctions and anti-money laundering post-Brexit.
Enables UK to impose, update, and enforce sanctions independently.
ML
What is the Sanctions List and why should you be aware of it?
A list of individuals/entities subject to UK sanctions.
Ensures businesses don’t breach sanctions; non-compliance can lead to penalties.
ML
Why was the Register of Overseas Entities introduced?
Introduced for transparency in foreign ownership of UK property.
Aims to prevent money laundering via the UK property market.
Reveals true property owners, reducing hidden ownership.
ML
Explain the impact of the Economic Crime (Transparency and Enforcement) Act 2022.
Register: Mandates disclosure of beneficial owners by foreign entities owning UK property.
Anti-Money Laundering: Targets illicit funds in the UK property market.
Sanctions: Boosts UK’s power to impose sanctions for economic crimes.
Enforcement: Amplifies investigative and penalty powers.
Reputation: Reinforces the UK as a transparent business hub.
ML
What would you do if you became suspicious that a client was involved in money laundering?
Immediate Halt: Stop all transactions/activities with the suspicious client.
Suspicion Evaluation: Identify the reason for suspicion, such as unusual transactions or inconsistent documents
Non-Disclosure: Avoid discussing suspicions with the client or outsiders to prevent “tipping off.”
RICS Adherence: Follow Rule 1 of RICS Rules of Conduct, emphasizing honesty, integrity, and not facilitating financial crimes.
Internal Reporting: Use the company’s designated form to report suspicions confidentially to the firms MLRO.
Documentation: Maintain detailed records of all interactions and transactions with the suspicious client.
Cooperation: Assist any external authorities involved, as per the “Sanctions and Anti-Money Laundering Act.”
Risk Management: Log the incident in the company’s annual risk assessment.
Monitoring: Keep a close watch on the client’s activities for any further suspicious actions.
Seek Guidance: Consult superiors or relevant departments when in doubt.
Training: Stay updated on best practices and legal requirements through regular training.
What would you do if you became suspicious that a client was involved in terrorist activities?
Immediate Response: Cease any activities that might support the client’s suspected terrorist involvement.
Internal Reporting: Alert the organization’s Money Laundering Reporting Officer (MLRO) about the suspicions.
Legal Awareness: Familiarize with the Terrorism Act 2000 to avoid unintentional violations related to terrorism-linked activities.
Disclosure: Consider making a formal disclosure if there’s genuine belief or suspicion, as outlined in the Terrorism Act 2000 and Proceeds of Crime Act 2002.
Risk Evaluation: Assess potential risks of money laundering or terrorist financing, especially if the client uses new technologies or methods.
Country Analysis: Be cautious if the client is linked to high-risk countries known for corruption, terrorism, or sanctions.
Professional Integrity: Adhere to Rule 1 of RICS Rules of Conduct, emphasizing honesty, integrity, and professional compliance.
External Reporting: If suspicions are strong and credible, consider notifying external authorities like the police or National Crime Agency.
Documentation: Keep detailed records of all interactions and actions related to the suspicions.
Ongoing Monitoring: Continuously observe the client’s activities to detect further suspicious actions or gather more evidence.
Bribe
What bribery legislation are you aware of?
Bribery Act 2010 - Aims to reduce bribery in business in UK and abroad.
Bribe
What is a bribe?
Involves giving, offering, promising, or receiving a gift, payment, or service.
Aimed to induce improper performance of a function or activity.
Can also be a reward for such improper performance.
Undermines impartiality.
Conflicts with working in the client’s best interest.
Bribe
If a prospective purchaser offered you a financial incentive to accept their offer, explain how you dealt with this.
In essence, accepting a bribe risks professional, legal, and reputational consequences, contradicting RICS standards and company policies. Immediate Rejection: I’d decline the offer due to potential CoI, compromising objective advice to the seller.
Objective Duty: My primary role is to provide objective and independent advice. A bribe would undermine this.
Integrity Concerns: Accepting an incentive risks perceived lack of integrity and damages professional reputation.
RICS Values: Accepting a bribe contradicts RICS’s core values of consumer protection and public advantage. UK Bribery Act 2010: Criminalizes all forms of bribery with severe penalties, including imprisonment and fines.
Corporate Accountability:Organizations can be liable for failing to prevent bribery.
International Reach: The Act applies globally to UK nationals, residents, and businesses.
Defensive Measures: Organizations must show adequate anti-bribery procedures to defend against accusations.
Reputational Risks: Bribery scandals can cause lasting reputational damage. Company Reporting: I’d report the incident internally, aligning with the company’s Anti-Bribery & Corruption Policy.
Bribe
What are the penalties for accepting a bribe?
Maximum penalty of 10 years in prison and / or unlimited fine
Bribe
What constitutes an offence under the Bribery Act 2010?
- Bribing
- Receiving a bribe
- Bribing a foreign official
- Failing to prevent bribery
Bribe
What would you do if you were asked by a client to reduce a fee proposal to win new work?
Bribery Implications: Offering significant fee reductions to secure business can be seen as a form of bribe.
Ethical Business Conduct: Business should prioritize quality and ethics over merely securing contracts
Unfair Competition: Reducing fees to undercut competitors is not a fair business practice.
Integrity Concerns: Offering fee reductions to outbid others may compromise professional integrity.
Respect for Peers: Undercutting fees disrespects fellow surveying firms and their value.
Service Quality: Assess if the desired service level can be maintained at a reduced fee.
Devaluing Profession: Drastic fee cuts can diminish the perceived value of the surveying profession.
Sustainability Issues: Continual undercutting is not a viable long-term business strategy.
.
PII
What is Professional Indemnity Insurance (PII)?
To protect clients, surveyors and third parties against negligence claims where a duty of care is breached and a claim for damages rises
Neg
What is negligence
Failure to exercise due care expected in professional/business activities.
Results in harm or damage to another party.
Lacks intentional misconduct but shows carelessness or oversight.
PII
Can you tell me about the RICS requirements in relation to PII?
- Firms must ensure all past and current professional work is covered by adequate and appropriate PII.
- The insurance should be on an ‘each and every’ claim basis or aggregate plus unlimited reinstatement basis.
- The policy wording should be RICS’ minimum or more comprehensive, based on the firm’s turnover.
- The policy should be fully retroactive, covering claims made against the insured during the insurance period regardless of when the negligent act occurred.
- The policy should be underwritten by an RICS listed insurer and cover all past and present employees.
PII
What is a PII aggregation clause?
single incident that creates multiple claims, can be treated as a single claim for the purpose of the policy limit.
PII
What does ‘claims made’ mean in terms of PII?
insurance covers you for any claims made during the period the insurance is active, no matter when the incident that led to the claim actually happened.
PII
Is a PII excess usually paid for per claim?
The maximum level of uninsured excess varies based on the firm’s turnover. For firms with a turnover of £10,000,000 or less, the maximum uninsured excess is the greater of 2.5% of the sum insured or £10,000.
