Ethics, rules of conduct and professionalism Flashcards
1
Q
When was the RICS founded?
A
1868
2
Q
When did the RICS receive Royal Charter?
A
1881
3
Q
How many members are there?
A
over 140,000 qualified members
4
Q
What is Royal Charter?
A
Method of incorporation of the RICS granted by the Queens Privy Council and highlights the requirement for the RICS to act into the public interest.
5
Q
RICS Motto?
A
There is measure in all things
6
Q
What are the 4 levels of membership?
A
- MRICS
- FRICS
- AssocRICS
- Trainee
7
Q
How do you become a fellow?
A
- 5+ years as MRICS
- Leadership role
- Professional/technical achievement
- Raised the profile of the RICS
8
Q
How is the RICS governed?
A
Under the terms of its Royal Charter and by internal councils & boards
9
Q
What are bye laws? + example of one?
A
Laws approved by the members and made under the Royal Charter to allow the RICS to self regulate.
Bye law 3 = designations (MRICS & FRICS)
10
Q
What is the Governance Structure of the RICS?
A
- Privy Council - grants Royal Charter
- Governing Council
- Management Board
- Standards & Regulatory Board
11
Q
What is the role of the Privy Council?
A
Queens/ Kings advisors who granted the Royal Charter
12
Q
What is the role of the Governing Council? & How has it changed post the Bichard Review?
A
Governing Council is the highest governing body, setting RICS strategy and vision, ensuring RICS fulfils its Royal Charter obligations.
Following the Bichard RICS Review, Governing Council has agreed a series of measures to create a clear and accountable governance structure.
Governing Council has confirmed that the RICS President will also chair Governing Council, in line with Lord Bichard’s recommendation.
13
Q
Bichard Review other key recommendations?
A
- For increased focus on the public interest remit of RICS, including creating a public interest panel to advise the Governing Council.
- Increased focus on diversity & inclusion across the profession.
- Increased member engagement with renewed focus on young members.
14
Q
What is the role of the Standards and Regulatory Board?
A
They oversee RICS professional standards and admission to the profession.
15
Q
What is the role of the Management Board?
A
To provide day-to-day performance updates
under delegated authority from Governing Council.
16
Q
Who is currently in RICS governing positions as CEO, President and President elect?
A
CEO = Richard Collins (interim)
President = Ann Gray FRICS from 01.01.23 & chair Governing Council post Bichard Review
President Elect = Tina Paillet FRICS
17
Q
What are the roles/ objectives of the RICS?
A
- Education and training standards
- Protect consumers through regulations and standards.
- Leading source of information and advice for the sector.
18
Q
Why do you want to become a member? (5)
A
RSMNK
- Recognition
- Status
- Market Advantage
- Network
- Knowledge
19
Q
How do RICS standards ensure consumer protection? (x2)
A
By requiring members to have undertaken the APC, they can ensure high standard of ethics required.
Also by regularily updating leading international standards.
20
Q
What do you mean in your submission when you say you should consider the Rules of Conduct for Members?
A
The rules set out the standards of professional conduct and practice expected for all members, they are mandatory, so members should consider them in all private and personal life.
21
Q
What are the RICS new Rules of Conduct 2021?
A
- Members and firms must be HONEST, act with INTEGRITY and comply with their professional obligations, including obligations to RICS.
- Members and firms must maintain their professional COMPETENCE and ensure that services are provided by competent individuals who have the necessary expertise.
- Members and firms must provide good-quality and diligent SERVICE.
- Members and firms must treat others with RESPECT and encourage diversity and inclusion.
- Members and firms must act in the public interest, take RESPONSIBILITY for their actions and act to prevent harm and maintain public confidence in the profession.
22
Q
Which do you consider to be the most important?
A
I would say rule 5 as acting in the public interest underpins everything you do in the RICS.
23
Q
What do you understand by the International Ethical Standards?
A
Work the RICS is undertaking to promote consistency and clarity across different marketplaces
24
Q
Example of when you have acted with integrity?
A
I acted with integrity with an internal client when I knew I wouldn’t be able to provide them with my monthly updated planning tracker on her deadline due to other urgent work required.
I made sure to be transparent and give her plenty of notice. We agreed a reasonable new deadline, allowing me to make sure the work was reliable and accurate.
25
Example of when you have promoted honesty in the profession?
A internal client approached me about assisting with the discharge of a BREEAM condition.
I informed them that that was not my area of expertise and I had not previously had experience in BREEAM. However, the client advised that they had instructed a BREEAM assessor but needed my assistance and planning contacts to instruct work to satisfy the condition.
I understood how I could assist and was content that the client was aware of my lack of experience. The client thanked me for my honesty but ensured me he trusted that my input would be valuable.
26
How do you promote trust in the profession in your private life?
I hold and conduct myself in a way which does not bring embarrassment to the RICS.
In line with the RICS use of Social Media Guidance for members 2021, I make sure my actions online promote trust in the profession and to treat others with respect
27
Example of when you have treated others with respect?
I've had an instance where I was in a local coffee shop in my lunch break. After mentioning I had joined Shanly Homes one of the other customers was very rude about the business.
Regardless of his actions, I remained calm and polite and treated him with respect and swiftly left the cafe.
28
Example of when you have provided a good-quality service?
Creation of the MUFC planning budget and constant updates post invoices being received. This allowed the client to have an update to date understanding of what invoices have been received and any that might need to be disputed.
29
Example of when you have taken responsibility?
I always take responsibility when booking sits visits. E.g. site visit of Dee Road Fire Station. Made sure I was aware of the PPE required so me and my Director could operate safely and make sure we are not putting anyone else at a safety risk.
30
Why have the Rules of Conduct been updated?
The old rules were quite outdated now, from 2007.
To help the global professions respond to new risks and opportunities.
To incorporate:
- increased focus on diversity and inclusion;
- increased focus on technology;
- increased focus on sustainability.
31
Can you tell me about the revision to the RICS Rules of Conduct & what they replaced?
STREAMLINED DOCUMENT. Replaced the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards.
Updated to address challenges relating to sustainability, the use of data (understanding technological advances), and diversity and inclusion.
32
What are Shanlys values?
Unity, Quality, Decisiveness. We encourage a continuous learning environment and adopt a can-do attitude in all that we do as we work together to deliver results.
33
The Levitt Review - when was it, what was it and what did she find?
RICS' current governance arrangements are under review following The Levitt Review's (2021) of very public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
Levitt called for a full independent review of the "purpose, governance and strategy" of RICS = RICS commissioned Lord Michael Bichard to review.
34
What is your opinion on the outcome of the Alison Levitt QC enquiry?
I am aware of the very public nature of the events which showed a lack of governance and transparency.
As members, we adhere to strict ethical standards, which the RICS didn't do in this instance.
However, I am happy that action has been made and that the Governing Council has accepted all the recommendations.
35
What are the benefits of a firm being regulated? (3)
1. Confidence - for clients as regulated firms are monitored by RICS.
2. Professionalism - firms must provide clear, impartial, expert advice.
3. Security - firms must have a recognised CHP and PII cover.
36
RICS 'Rules for Registration of Firms' (2022) - What are the requirements for firms regulation registration?
Registering for regulation is to ensure a quality benchmark for all firms.
- if no RICS members = cannot register.
- 25% of principles are RICS members = it can apply to be regulated.
- 50% of principles are RICS members = has to be regulated.
Each firm also has to nominate a 'Responsible Principal' to ensure all systems are in place to comply with RICS requirements.
37
Who are company/ responsible principles and what do they do?
Someone who can act without supervision e.g. Board members
They ensure all compliance with regulation and report to the RICS.
38
Who can use the RICS logo?
RICS members and registered firms
39
Who controls disputes about becoming a registered firm?
Standards and Regulation Board
40
What information is required by the RICS for registration/ within an annual return?
Need to include the following in an annual return:
1. Type of business and staffing details
2. Name of responsible principle
3. Statutory regulated services
4. Nature of clients
5. CHP details and records
6. PII details
7. Whether the firm handle's client's money
41
What are the mandatory professional obligations of RICS regulated firms?
- Publish CHP and maintain a complaints log
- Ensure all work is covered by adequate PII cover
- If a sole principal = make appropriate arrangements for professional work to continue in the event of their inability to work.
- Cooperate with RICS
- Display 'regulated by RICS' on business literature
42
How do you demonstrate implementation of the Rules of Conduct?
I comply with the CPD requirements.
I provide a high level of service.
43
What are the mandatory professional obligations of RICS members?
Comply with RICS CPD requirements
Cooperate with RICS
Promptly provide all info reasonably requested by the Standards and Regulation Board
44
What is the RICS Ethical Decision Tree and tell us three aspects?
The decision tree provides a framework of questions that members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner.
1. Is it legal?
2. Is it in line with the RICS ethical standards?
3. Happy for it to be made public?
45
How does the RICS regulate itself?
Self-regulation
46
How can Disciplinary procedures be triggered for not following the Rules of Conduct?
1. Someone complaining to RICS
2. Allegation by a client
3. Or from information established by RICS
47
What are the three levels of disciplinary action?
1. Action by Head of Regulation
2. Disciplinary Panel (where the head has referred a matter)
3. Appeal Panel
48
What are the most common RICS breaches?
Professional behaviour, CPD and Protecting Clients Money.
49
What four actions can the Head of Regulation initiate following their investigations?
1. Fixed penalty notice
2. Regulatory Compliance Order
3. Refer matter to a member of the Regulatory Tribunal for consideration
4. Refer to Disciplinary Panel
50
What are fixed penalties (1)?
Fine or caution for breaches of the Rules
51
What are Regulatory Compliance Orders and what are they used for?
Used for low-level breaches of the RICS Rules.
A Compliance Order is a written document that states what a member or firm must stop doing.
52
When is action by the Disciplinary Panel/ Regulatory Tribunal taken? + what are some of the penalties?
On more serious breaches of conduct.
1. Regulatory Compliance Order
2. Unlimited fine per breach
3. Conditions on future RICS registration
4. Expulsion
5. Publication of results in Modus/website/newspaper
53
What is the role of the regulatory tribunal?
Used for less serious breachs, can be just one member.
Regulates the RICS
Independent/ fair judicial body
Consists of lay members and RICS members
54
Who comprises the Regulatory Tribunal/ Appeal Panel?
Lay people (not RICS members)
55
What does the Appeal Panel do?
Will hear a firm or member's appeal.
They can allow the appeal and vary the penalty imposed.
56
What are the different advice levels of RICS documents?
1. International Standards (Mandatory)
2. Professional Statements (Mandatory)
3. Practice Statements (Mandatory)
4. Guidance Notes (best practice)
5. Codes of Practice (mandatory or recommended)
57
Examples of International Standards?
RICS Valuation - Global Standards (2021)
58
Examples of Professional Statements?
1. Conflicts of Interest, Global (2017)
2. Property measurement 2018 (incorporating IPMS)
59
Examples of Practice Statements?
1. Surveyors acting as Expert Witnesses 2014
60
Examples of Guidance Notes?
1. Surveying Safely (2018)
2. Comparable Evidence in Real Estate Valuation (2019)
61
Examples of Codes of Practice?
1. Code of Measuring Practice (2015)
62
What would you need to do if you were starting a new practice from RICS point of view?
1. Inform RICS by completing a Firm Details Form
2. Appoint Responsible Principle for RICS communication
3. Register for regulation
4. Arrange PII and send details to RICS
5. Set up how you will handle client's money
6. Register for the RICS Valuer Registration System
7. Seek RICS approval for CHP
8. Set up a complaints log
9. Appoint Complaints Handling Officer
ASKED THIS YEAR
63
What info are firms required to send the RICS annually?
Type of business and staffing
Nature of clients
Training procedures
CHP details
PI insurance details
Whether firm holds Client Money
64
What RICS compliance do you need to follow to close a practice?
1. Inform RICS
2. Inform Clients
3. Return any money held
4. Inform PI insurers
5. Get PII run-off cover for a minimum of 6 years with minimum of £1,000,000 aggregate cover
6. Retain files for a minimum of 6 years
65
Why is it important for RICS members to undertake CPD?
One of the Rules of Conduct.
But means we can continue to offer the best service possible to clients by being up to date and in the know on latest guidance and information.
66
RICS CPD requirements?
20 hours minimum.
50% formal.
Ethics CPD every 3 years
67
Where would you go and what do you need to provide to source PII?
To an insurance broker with the relevant details such as:
- Name and address
- Length of business trading
- Whether the business is ltd, PLC or sole trader
- and estimated turnover in the past year
68
Where do you need to record your CPD?
RICS CPD Management System
69
Difference in Informal & Formal CPD?
Self-managed learning
Vs.
Structured learning with clear learning objectives
i.e. training courses, seminars, courses
70
Who is the RICS ultimately accountable to?
The Public
71
What are some of the UK statutory compliance steps for starting a new practice?
1. Disclose business name
2. Disability discrimination compliance (Equality Act 2010)
3. Bribery Act 2010 compliance
4. Appoint a Money Laundering Officer
5. Ensure compliance with employment law e.g. working hours compliance
6. Inform HMRC of Tax and VAT registration
7. Comply with GDPR
72
What are some of the RICS considerations for fee negotiations for consultants?
1. Firms need to avoid price fixing, aggressive fee cutting or collusion with competitors.
2. Healthy competition is encouraged.
3. Consultants can enter further fee negotiations once the initial fee has been submitted, as long as they act professionally.
4. Not to undercut other firms.
5. To be transparent e.g. informing the client if they are in receipt of a referral fee.
73
What would you do if a client suggested you reduced your fee by £3,000 to get an instruction?
Refer to the RICS Ethical Decision Tree...
- I would ask whether the scope of work had changed, as I would want to understand if this could be a reason for the revision e.g. timescales to complete have increased.
- If not this would be undercutting my competitors, not be treating other surveyors with respect and not acting with integrity.
- Therefore no as unfair competition.
74
What would a consultancy need to assess in order to set a fee for a client?
Assess:
1. resource required to undertake the project
2. time needed to complete
3. value of property
4. level of PII required
75
What must you do prior to starting an instruction?
CIT
1. Check COMPETENCE
2. Confirm no conflicts of INTEREST
3. Confirm TERMS of Engagement in writing
76
What do you understand by a Conflict of Interest? + example of one?
When an someone in a position of trust has a competing professional/ personal interest meaning they cannot fulfil their duties IMPARTIALLY. Chartered Surveyor must make clients aware of this.
e.g. Party Conflict = on a scheme I was working on in Chinnor, the planning consultant undertook a COI check prior to instruction as they had worked for another developer in the locality.
77
Difference between conflict avoidance and conflict management?
Conflict avoidance = not accepting an instruction
Conflict management = instruction is accepted and steps are agreed to manage the conflict
78
When were the RICS COI produced and why are there two? What are the key things they state?
RICS Global PROFESSIONAL STATEMENT on COI, 2017 = sets out high level principles for identification and management of conflicts.
RICS PROFESSIONAL STATEMENT: COI - UK commercial property market investment agency, 2017 = main function is to deal with dual agency.
79
What is informed consent?
Can be given in writing if both clients are fully aware about the material facts of the COI meaning your firm can act with no COI.
80
Name the different types of COI?
1. 'Party Conflict' - when you owe a duty to two different parties/ clients when working on the same instruction.
2. 'Personal Interest Conflict' - when acting for a family member or someone you have a personal interest with.
3. 'Confidential info Conflict' - work between two parties that is confidential.
81
What to do if a conflict of interest arises?
1. Conflict avoidance - decide whether you can accept the work or if you impartiality has been compromised.
2. Written advice to both parties to disclose nature of conflict, be as clear as possible and request INFORMED CONSENT from both parties.
3. Conflict management - set up an information barrier in accordance with the provisions agreed with both parties. Can ask both teams to sign NDA agreements.
82
What is Dual Agency (double dipping) in relation to COI and what RICS Core Material did it originate from?
When an agent has a relationship with both the seller & buyer at the same time. MUST NOT HAPPEN!
RICS Professional Statement = Conflicts of Interest - UK Commercial Property Market Investment Agency 2017.
83
What is meant by multiple introductions?
This is when an agent acts for several buyers. Within the TOE, it must be agreed where the agent makes it clear if they are acting exclusively (can only advise one buyer) or on a non-exclusive basis (must obtain informed consent from the clients).
84
Example of incremental advice? + when is this allowed to be provided?
e.g. Savills market land and I approach them for planning/ sales advice.
This can only be provided if there's transparnecy and they have consent from the seller.
85
What would you do prior to acting for a client for agency purposes?
1. Assess competence
2. No COIs or personal interest
3. Issue ToE
4. Get signed ToE
5. Conduct AML checks
86
Reasons why you might decline an instruction?
1. Not competent
2. Not enough resources to complete in timescales required
3. There is a COI
4. Not enough facts
5. Work is for a friend and PII won't cover personal interests
6. PII can't be agreed upon.
7. Wouldn't be happy if it was made public
87
What does the Consumer Rights Act 2015 allow?
A 14-day cooling-off period upon the signing of Agency Instruction Agreements.
88
What is a cooling-off period?
Period of time following a purchase when the purchaser may choose to cancel a purchase, and return goods which have been supplied
89
What should you do if you receive confidential information in error?
Information cannot be used.
Need to advise the client and sender of the error.
Delete securely.
90
When may a surveyor be negligent and how could this be avoided?
Duty of care exists for clients and third parties. If it is breached and there is a loss, they can claim damages.
- understanding the client's instruction - accurate & signed terms of engagement
- competence
- make sure dont have excessive work load
- undertake work in accordance with RICS Standards & Guidance Notes
- make detailed notes of meetings and take photographs
91
Why are Terms of Engagement important?
Confirm a clients agreement to the proposed fee basis, so avoid any misunderstanding. Confirms payment of expenses, copy of a firms CHP.
92
What should Terms of Engagement include?
Must state in writing:
- clients agreement to the proposed fee basis
- payment of expenses (and how calculated)
- a copy of the firm's complaints handling procedure, is available upon request.
93
How would you deal with a complaint from someone to whom you owe a duty of care?
Stage 1 - IN HOUSE. The CHO should be identified and noted as the person to contact in the first instance. Complaint must be made in writing. Should be acknowledged within 7 days and investigated with 28.
Stage 2 - THIRD PARTY RESOLUTION. If the client is not happy with the review, the second option involves an independent redress scheme. Alternative Dispute Resolution (ADR) mechanism which is identified within the CHP outlined within the Terms of Business.
94
What does the RICS Complaints Handling Guidance Note say about CHP?
RICS Guidance Note on Complaints Handling 2016.
A firm's written CHP must be approved by the RICS.
Notify PII insurers as soon as possible if a complaint arises.
Details of CHP issued same time as ToE.
Complaints log must be maintained showing details, status and outcomes of a complaint.
CHP must include an RICS-approved Alternative Dispute Resolution.
95
What are the RICS minimum timing procedures for CHP?
1. Complaints Handling Officer should be notified
2. Acknowledge a written complaint within 7 days
3. Investigate within 28 days
96
If you are a sole practitioner who can you use as your complaints handling officer?
A surveyor from another firm.
97
What is professional indemnity insurance for?
What is the core RICS material?
Requirement for all policies?
Insurance to protect clients, surveyors and third parties against negligence claims for damages after a Duty of Care is breached.
RICS "Professional Indemnity Insurance Requirements" effective from April 2022.
All policies need to be underwritten by an RICS approved insurer.
ASKED THIS SITTING
98
What are the minimum PII level requirements?
In-line with the RICS "Professional Indemnity Insurance Requirements" April 2022 they are based on firm preceding years turnover as follows:
Less than £100k = £250k min
£100,001 to £200k = £500k min
> £200,001 = £1,000,000
ASKED THIS SITTING
99
How would you set your PII cover for your first year of trading?
Estimate it based off your first year of income assumption, then adjust it at a later date.
100
What does the RICS require in regards to PI?
Must be made on an each and every claim basis;
Sets out the minimum levels of indemnity required;
Sets out maximum levels of uninsured excess;
Sets out run-off cover requirements
101
What are the maximum levels of uninsured excess required by the RICS?
You can't have much uninsured excess.
Limit of indemnity / Maximum uninsured excess is:
If turnover up to £10 million then = greater of 2.5% of the sum insured or £10,000
If over £10 million then no set limit.
ASKED THIS SITTING
102
In relation to PII, what does retroactive mean?
The policy covers claims that are made within the insurance period, regardless of when the negligent act occurred.
103
At what point should your firm notify insurers once a complaint has been received?
Immediatley when the complaint has been received. Make sure transparent and that there could be a claim being made.
104
What is run-off cover? Different levels and length required?
Cover required following cessation of trading. It is split for consumer & commercial claims.
For consumer claims = min £1,000,000 of aggregate cover for min of 6 years.
For commercial claims = firm must consider what is adequate for min 6 years.
105
What are the RICS rules regarding PII?
Mandatory requirement - Rules of Conduct for Firms
Need RICS approved insurer (list on website)
Need adequate and appropriate level for each instruction.
106
What if the loss exceeds the cover provided by the PII?
The firm is liable for the difference and would need to cover this using the assets they own.
107
How long should old files be held for and why?
Minimum 6 years, then destroyed securely. PII claims can be made up to 15 years after work was undertaken.
108
Why do firms have PII?
One of the Rules of Conduct.
Protects against negligent behaviour.
Protects clients, the firm and me.
109
What does 'pro-bono' mean? And what would a consultant need to ensure prior to providing pro-bono advice?
Unpaid work. Sufficient PI cover is needed for this.
110
Why is client money handling important for RICS members?
One of the Rules of Conduct for Firms - client money must be kept safe and have appropriate accounting controls.
111
Is there a RICS statement for Client Money?
Yes RICS Professional Statement 'Client Money Handling' 2019.
112
How should client money be held?
1. held separately with an authorised bank
2. account needs to be entitled with the client's name and Client
3. money held must be immediately available
4. provide written communication of any money movement
5. accounting records need to be kept
113
Can you accept cash?
ASKED THIS YEAR
1. FIRSTLY MAKE SURE TO REGISTER IT/ REPORT IT TO LINE MANAGER
2. THEN CONSIDER THE RICS ETHICAL DECISION TREE - INEVITABLE POINT IS HOW WOULD IT LOOK IF IT WAS MADE PUBLIC
3. NEED TO CONSIDER IF IT COULD IT BE CONSIDERED A BRIBE?
114
How would you want a client to pay for your work and why?
Ensure payment are paid by bank transfer, allowing for a record to be kept.
115
Name two key legislation that relate to gifts, bribery and corruption?
Bribery Act 2010
Proceeds of Crime Act 2002
116
What is a bribe?
The giving or receiving of an advantage such as payment for an action - which is illegal.
117
You mentioned the Bribery Act 2010, what are the main principles of bribery prevention within the Act?
PTR DCM
1. Proportional procedures when compared to the bribery risk to the organisation.
2. Top level of management commitment is required.
3. Risk assessment - organisation must assess the nature and extent of its exposure within a risk assessment.
4. Due diligence - of third parties to mitigate risk.
5. Communication - training procedures to imbed bribery prevention.
6. Monitoring and review - constantly improve procedures where necessary.
118
What are the offences under the Bribery Act 2010?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failure to prevent bribery
119
Who polices the the Bribery Act 2010 and what are the penalties?
Policed by the Serious Fraud Office.
Maximum 10 years in prison and /or unlimited fine.
120
What would you do if rejecting the gift would offend the client?
Would report it to my Head of Department and compliance team.
The Head of Department would either donate the item to charity or distribute or raffle the item among a large group of employees.
121
Are businesses responsible for employees corrupt acts?
Yes unless they can show they had adequate bribery prevention policies and procedures in place to mitigate.
122
What can companies do to prevent bribing?
Identify potential risks, staff training & regular reviews.
123
How can hospitality not be constituted as a bribery offence?
If it seeks to genuinely promotes the image of the firm and is REGISTERED in accordance with a firms anti-bribery procedures.
124
What is your company's policy on gifts?
Below £50 inform my Director but no need to register
£50 or more must be registered with the teams PA
£250 or more Must be registered with the PA and approved by the Chairman
125
What is money laundering?
Proceeds of criminal activities are disguised/ converted and then realised as legitimate assets.
126
What is the key national legislation for money laundering?
What professional practice does this mainly cover?
Money Laundering, Terrorist Financing, and Transfer of Funds Regulations (2019)
It covers estate agency.
127
What are some of the key components of the National Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2019)?
- Introduced the requirement to have a written money laundering and terrorist financing RISK ASSESSMENT.
- Comply with customer and enhanced due diligence checks
- Provide staff training
- AML checks must be undertaken to confirm the identity of a purchaser and check source of funds
- Ensure appropriate record keeping procedures
128
What are the two money laundering due diligence checks?
Customer due diligence
Enhanced due diligence
129
What does a customer due diligence check involve?
Verification of a clients identity
Identify the clients beneficial owners
Company name, company number, registered office address
Names of directors
Info on their proposed funding arrangements
130
What is enhanced due diligence and when is it required?
Further financial and personal research on an individual.
If the person is a PEP (politically exposed person)
If there are Red Flags
131
What is a Politically Exposed Person?
Someone who has been entrusted with a prominent public function.
Has a higher risk of potential involvement in bribery and corruption by virtue of their position.
132
What would class as a 'red flag' in regards to due diligence?
- Unwillingness to provide documents
- Unusual patterns of transaction i.e. undue urgency, potential loss-making
- Changing currencies/ unusual currency
- Changes to parties involved
133
What are the penalties under the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2019?
- Assisting with ML = MAX 14 YEARS imprisonment and/or unlimited fine
- Tipping off someone if you know they are under investigation = MAX 5 YEARS imprisonment and/or unlimited fine
134
What are some of the UK Government requirements for firms regarding money laundering?
- 10,000 euros is the maximum cash payment
- Must nominate a senior memeber of staff as the Money Laundering Reporting Officer to report Suspicious Activity Reports to the National Crime Agency
- Detailed record keeping procedures
- Keep records for min 5 years
135
What money laundering checks do you need to do for private individuals?
Passport/drivers licence
Utility bill from last 3 months
136
What money laundering checks do you need to do for Private Limited companys?
Find their registered number, office and name of Directors.
137
Where would you go for a PLC money laundering check? And what information would you need to note?
London Stock Exchange Listing
Certificate of incorporation
Full name
Registered Office
Registered number
Business address
Name of all shareholders with over 25% stake.
(report discrepancies to Companies House)
138
What money laundering checks do you need to do for public bodies?
Government ownership / control
139
With the Kensworth example, what would you do if you had Money Laundering related concern?
I would first speak to my manager and seek out their advice on the matter.
If we both believed there was a sufficient concern then I would notify my firm’s legal secretary - Ross Marvin.
He was also suspicious, then he would file a Suspicious Activity Report (SAR) and send to the National Crime Agency.
140
How long does AML information need to be held for?
5 years
141
Who polices the Money Laundering and Terrorist Financing and Transfer of Funds Regulations?
National Crime Agency
142
What is the Proceeds of Crime Act 2002?
Provides power for enforcement authorities to recover money and assets deemed to be the proceeds of crime
143
What would you do if you suspect suspicious Money Laundering activity?
1. Report to a Money Laundering Reporting Officer
2. They would raise a Suspicious Activity Report
3. Send it to the National Crime Agency
144
What is an offence under the Proceeds of Crime Act 2002?
- Concealing criminal property: concealing, disguising, converting or transfering criminal property.
- Arrangements: if a person enters into an arrangment which they suspect facilitates the aquisition, retention or use of criminal property
- Acquisition, use and possession of a criminal property
145
What is the RICS professional statement for bribery & money laundering + date? and what does it do?
RICS professional statement on countering bribery, corruption, money laundering and terrorist financing 2019.
Sets out mandatory, global requirements for RICS members and firms.
146
What does the RICS Professional Statement say firms must do in relation to Bribery, Corruption, Money Laundering and Terrorist Financing?
Divided into 3 parts.
Part 1 = regulated firms must:
- Not offer or accept bribes
- Have procedures in place to comply with the law
- No ML or TF
- Report suspicions
Part 2 = Guidance:
- Gifts register
- Training of stafff
Part 3 =
- Three W's. Who, why and what.
- Deals with PEP's.
147
Are you allowed to pitch for work over coffee?
No, could be seen as a bribe even though it is small.
Should be done in an appropriate workplace setting.
148
When can you allow a third party to access your files?
Only if you get prior approval from the client.
OR
There is a statutory duty overiding the client's confidentiality rights, such as a police or HMRC investigation.
149
What would you do if you were offered dinner at a Michelin Restaurant?
I would need to consider if it was ‘reasonable’.
If I were invited by a client who I completed a high-value instruction for successfully I might accept.
However, if I was invited by a client during an instruction, or for a low-value fee, I wouldn’t. I would also need to gain approval in line with company policy.
150
What would you do if you were offered a gift after an instruction had been completed?
Check company gift policy.
Check reasonableness.
Accept if reasonable.
151
What would you do if you were offered a gift during an instruction?
Politely decline as the instruction is not yet complete and this could impact my impartiality.
152
How would you deal with friends asking for advice on property matters?
Duty of care is owed even if providing pro-bono advice, so in theory if advice is given without my consideration of all the factors of the case I could be liable for negligence.
I would say that to advise on this it would require agreement of terms of engagement in order to establish the scope of instruction and so they understand what can be relied on from the professional advice given.
I would also explain whether I consider myself competent enough to advise. If I was I would need to undertake a site visit/ gain a better understanding of the facts. Also whether I had sufficient PII cover.
153
What is Matrics & Lionheart?
Matrics = somewhere that students, trainees and newly qualified RICS members can network and share their views on the profession.
Lionheart = charity that helps to support past, present and future RICS members.
