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APC > Ethics, Rules Of Conduct And Professionalism > Flashcards

Ethics, Rules Of Conduct And Professionalism Flashcards

1
Q

What are the RICS’ 5 principles of better regulation? PACTT

A

Proportionality - solutions must be proportionate
Accountability - justify your decisions
Consistency - consistent with rules and regs
Targeting - focus on the problem and minimise side effects
Transparency - be open

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2
Q

Difference between RICS ethics and rules?

A

Ethics are a set or moral values whereas rules of conduct are a framework that we work to

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3
Q

What are the 5 rules of conduct?

A

Be honest and Act with integrity
Maintain their professional competence
Provide good quality and diligent service
Treat others with respect and encourage diversity and inclusion
Act in the public interest and Take responsibility

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4
Q

Why does RICS have Rules of Conduct?

A

To provide a framework we can all work to.

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5
Q

What is the professional statement for conflicts of Interest?

A

RICS Conflicts of Interest 1st Edition 2017 (wef January 2018)

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6
Q

Can a member of firm still act if there is a conflict of interest?

A

Yes if they obtain informed consent from the parties involved and it is not prohibited by law.

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7
Q

What are the three types of conflict?

A

Party Conflict
Own interest Conflict
Confidential Conflict

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8
Q

What is a party conflict?

A

Where acting in the interest of a client or party conflicts with a duty owed to another client. This can also arise where a duty owed to a client conflicts with a duty owed to a court or tribunal or where requiring impartiality e.g. adjudicator, arbitrator, mediator…

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9
Q

What is a Own interest Conflict?

A

Where acting in the interest with a client conflicts your own interest.

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10
Q

What is a confidential information conflict?

A

Not disclosing one clients information to another.

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11
Q

When is informed consent not enough?

A
  1. A contentious matter
  2. Appointment is subject to a specific statutory or regulatory regime.
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12
Q

Is Competing Bidders a conflict?

A

Yes but it can be resolved by informed consent and appropriate information barriers being put in place.

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13
Q

What is an Information Barrier?

A

The physical or electronic (or both) separation within the same firm that prevents confidential information passing between them.

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14
Q

What is the RICS statement for bribery?

A

Countering bribery and corruption, money laundering and terrorist financing 1st Edition February 2019.

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15
Q

What must RICS firms do to counter bribery and corruption?

A

Prepare a written policy including a risk assessment
Have appropriate governance systems controls in place
Encourage transparency by implementing a register (i.e.gits etc)
Publish a code of behaviour

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16
Q

What must RICS members do to counter bribery and corruption?

A

Declare any gifts to their employer and attend relevant training

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17
Q

What is the RICS statement for Client money?

A

Client money handling October 2019 (wef January 2020)

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18
Q

What are the objectives of RICS statement on client money handling?

A

Ensure client money is kept safe
Ensure client money accounts are used for appropriate purposes
Ensure firms have appropriate controls and procedures to safeguard client money

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19
Q

What RICS scheme should a RICS firm be registered to for client money?

A

Either RICS Client Money Scheme for Surveying Services OR RICS Client Money Protection Scheme for Property Agents.

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20
Q

What is Rule 1 of the rules of Conduct and give me an example.

A

Must be honesty and act with integrity and comply with professional obligations, including those to RICS.

e.g. members and firms are open and transparent with clients about their fees and services.

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21
Q

What is Rule 2 of the rules of Conduct and give me an example

A

Maintain professional competence and ensure the services provided are by competent individuals who have necessary expertise.

e.g. Only undertake work that they have knowledge, skills and resources to carry out competently.

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22
Q

What is Rule 3 of the rules of Conduct and give me an example

A

Provide good-quality and diligent service.

e.g. understand a client needs and objectives before accepting any professional work.

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23
Q

What is Rule 4 of the rules of Conduct and give me an example

A

Treat others with respect and encourage diversity and inclusion.

e.g. work cooperatively with others and do not bully, victimise or harass anyone.

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24
Q

What is Rule 5 of the rules of Conduct and give me an example

A

Must act in the public interest and take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.

e.g. respond to complaints promptly, openly and professionally.

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25
Q

What are the 3 professional obligations for RICS Members?

A
  1. Comply with CPD requirements
  2. Cooperate with RICS
  3. Promptly provide all information reasonably requested by the Standards and Regulation Board
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26
Q

What are the 7 professional obligations for RICS firms?

A
  1. Publish a complaints handling procedure
  2. Ensure all previous and current professional work is covered by adequate professional indemnity insurance
  3. Make appropriate arrangements for their professional work to continue in the event of death or inability to work (Locum)
  4. Cooperate with RICS
  5. Promplty provide all information reasonably requested by RICS Standards and Regulation Board.
  6. Display on their business literature a designation to denote that they are regulated by RICS.
  7. Report any RICS matter they are required to under the Rules for the Registration of Firms.
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27
Q

What are the max levels of uninsured excess?

A

Effective from 1/4/22 the max uninsured excess:-

Liability up to £500K = greater of 2.5% of sum insured or £10K

Liability over £500K = 2.5% of sum insured

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28
Q

What is the purpose of PII?

A

To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, errors or omissions.

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29
Q

What is the min levels of indemnity?

A

Turnover:
£100,000 or less = £250,000
£100,001 to £200,000 = £500,000
£200,001 and above = £1,000,000

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30
Q

What is the RICS guidance note for firm registrations?

A

RICS Rules for the Registration of Firms wef 2/2/22

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31
Q

What Firms are required to register?

A

a) Provides surveying services to the public
b) Operating in Regulated Area A (UK)
c) 50% of the firms principals are RICS members

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32
Q

What is the procedure to register a new firm?

A
  • Make an application providing such information required by the Standards and Regulations Board
  • Have an appointed principal
  • agree RICS may share relevant information about the firm with government or other regulatory bodies as appropriate
  • agree if RICS declines, they may publish their decision.
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33
Q

What is RICS Standards and Regulations Board?

A

It oversees the activities of RICS’ professional standards, entry and admission to the profession, education and qualification standards, regulatory operations, dispute resolution services and the Regulatory Tribunal.

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34
Q

What is the RICS ethical decision tree?

A

The RICS decision tree assist me in making informed decisions, confirming my actions are ethical and legal.

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35
Q

What are the three types of due diligence?

A

Simple Due Diligence - Where you determine the business relationship is low risk of money laundering/terrorism
Enhanced Due Diligence - For high risk customers and transactions with greater threat to the financial sector
New Customer Due Diligence - Ensure your client is who they say they are.

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36
Q

Why does your firm have Terms of Engagement? What should be include in Terms of Engagement?

A

Creates a contract with the client and clear definition of what is expected and on what terms etc.

Sets out the proposed fee basis, payment of expenses and that a copy of the firms complaints handling procedure is available upon request.

37
Q

How long should files be kept for?

A

A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)

38
Q

How do you know you are competent?

A

Having the necessary knowledge, skills, training and experience.

39
Q

Can you advise somebody as an individual?

A

No unless you have the correct insurances in place. I would advise them to contact me during working hours

40
Q

What is a complaints handling procedure?

A

A procedure to allow and define the procedure for clients to raise a complaint.

41
Q

What must a complaints handling procedure include?

A

An Alternative dispute mechansim approved by the standard and regulation board. A nominated person, investigated with 28 days, record of the complaints, advise PI insurers of the complaint.

42
Q

What is the requirement of a complaints handling procedure?

A

Maintain a complaints log.
Acknowledge a complaint within 7 days
Investigated within 28 days.
If cannot be resolved then refer to a third party.

43
Q

Referring to your instruction in Bourne, why was this a conflict?

A

This was a party conflict given the interests of each client conflicted with one another

44
Q

What must you consider to do when closing a practice?

A
  1. Inform RICS
  2. Inform clients
  3. Return any monies
  4. Inform insurers and procure PII run off cover for a min 6 years from the expiry of the policy in force at that time
  5. Retain a copy of client files for a min 6 years.
45
Q

Who is the President of RICS?

A

Ann Gray

46
Q

Who was the previous President of RICS?

A

Clement Lau

47
Q

What should you consider when deciding to accept a gift or hospitality?

A

My firms systems in place such as a gift register.

The 6 principles of the Bribery Act 2010

48
Q

What are the 6 principles in the Bribery Act 2010?

A

Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review

49
Q

What does RICS stand for?

A

Royal Institution of Chartered Surveyors

50
Q

When was RICS founded?

A

1868

51
Q

When did the privy council grant the royal charter?

A

1881

52
Q

What are the four levels of membership?

A

FRICS
MRICS
AssocRICS
Trainee/student

53
Q

How many members are in the governing council?

A

25

54
Q

What is the purpose of the governing council?

A

The regulatory board, management board and various committee report to the Governing Council who provide a management and strategic direction

55
Q

What is the role of RICS?

A

To promote and enforce the highest professional qualification and standards in the development and management of land, real estate and construction

56
Q

What are the 5 main roles of RICS?

A
  1. Advancing the highest ethical and technical standards for professionals
  2. Protecting and providing benefits to consumers by enforcing standard and best codes of practice
  3. Providing expert impartial advice
  4. Equipping RICS members with leading edge advice, market insights and professional training
  5. Promoting RICS status and standards in key worldwide markets as the mark of property profession
57
Q

Aims of Lord Brichards review?

A

Clarify the purpose of RICS, including its responsibility to act for public advantage

Make recommendations on its governing structure to deliver that purpose

Provide proposals for the incoming leadership and governing body on the future strategy of the institution

58
Q

What does Lord Brichard consider necessary for the RICS to move forward?

A

Make proposals for the future which will put the RICS in a prominent position for best practice in governance, transparency and accountability

59
Q

When was Brichard review published?

A

June 2022

60
Q

5 benefits of being an RICS member?

A
  1. Status
  2. Recognition
  3. Market advantage
  4. Knowledge (CPD)
  5. Network
61
Q

Three benefits of regulation of firms? (CPS)

A
  1. Confidence
  2. Professionalism
  3. Security (complaint handling procedure)
62
Q

Rules of registration of firms?

A

50% of principles of a UK firm which provides surveying services must be regulated

More than 25% then it can apply to be regulated

63
Q

6 areas of information required for registration?

A
  1. Type of business and staffing details
  2. Statutory regulated activities
  3. Nature of clients
  4. Complaints handling procedure
  5. PII
  6. Holding of client money
64
Q

What is the reason for developing new rules of conduct?
(5 things)

A
  1. A simpler structure
  2. Clear examples
  3. Focused on respect
  4. Understanding evolving technology
  5. Tackling global changes
65
Q

Three levels of disciplinary action?

A
  1. Action by head of regulation
  2. Regulatory tribunal
  3. Appeal panel
66
Q

What disciplinary actions can head of regulation take?

A
  1. Fixed penalty notice
  2. Regulatory compliance order (low level breaches that can be easily rectified)
  3. CPD sanctions
  4. Refer to disciplinary panel for consideration
67
Q

What actions can be taken by regulatory tribunal?

A
  1. Impose compliance order
  2. Impose an unlimited fine
  3. Impose conditions upon future continued RICS registration
  4. Expulsion
  5. Require publication of the results of the hearing in the RICS Modus, on the RICS website and local paper where the firm or member is based
68
Q

What is the guidance paper on social media?

A

Use of social media guidance for RICS members 2021

69
Q

What are the three steps to follow regarding TOE? (CIT)

A
  1. Competence
  2. Conflicts of interest
  3. Confirm TOE in writing before starting work
70
Q

What allows a 14 day cooling off period from date of agreement?

A

Consumer Rights Act 2015

71
Q

Reasons for declining an instruction? (8)

A
  1. Not competent
  2. Do not have sufficient facts
  3. Client will not sign TOE or undertake AML checks
  4. Conflict of interest
  5. Professional indemnity cap cannot be agreed upon
  6. Advice is for a friend and on a pro bono basis which is not covered by PII
  7. Potential client included in government sanctions list
  8. Would you be content with your actions being made public?
72
Q

What is a conflict of interest?

A

When a member or firms independence and impartiality are threatens due to the existence of a conflict such as:-
1. Any financial interest
2. Personal interest
3. Commercial relationship
4. Acting on both sides of transaction

73
Q

Should a conflict arise what is the three step process?

A
  1. Conflict avoidance
  2. Written advice to parties
  3. Conflict management
74
Q

What are the main areas of RICS Professional statement: Conflicts of interest - UK Commercial property market agency 2017?

A

Dual agency - not to act for buyer and seller

Multiple introductions - where an agent competing for contractural relationships simultaneously with several buyers for commercial real estate

Incremental advice - where an agent is approached by another party to provide advice to include valuation etc related to a purchase or disposal that is incremental to another client

Personal conflict - acting for a family memebr

75
Q

Should a third party want access to your clients flies what should you do?

A

Obtain client consent unless you are subject to a statutory duty overriding the clients confidentiality rights such as the police or HMRC investigation

76
Q

How do you become a Fellow (FRICS)?

A

Must evidence achieving four Fellowship characteristics:-
1. Five or more year at MRICS
2. A leadership role
3. Professional/technical achievement
4. Academic achievement

77
Q

If you are a sole practitioner, what must you do with regards to a complaint handling procedure?

A

The sole practitioner must nominate a surveyor in another firm to act as their complaints handling officer

78
Q

What are limitation periods for negligence under the Limitation Act 1980?

A

Contract - 6 years from date of negligent act

Tort - 6 years from date claimant suffered the loss

79
Q

How can you avoid negligence? (6)

A
  1. Clearly understand client’s objectives
  2. Ensure competence
  3. Adhere to RICS guidance and Standards
  4. Keep records
  5. Keep up to date via CPD
  6. Cap the professional liability on you PII policy in TOE
80
Q

What is the RICS compliance for starting a new practice? (7)

A
  • Inform RICS by completing a Firm Detail Form
  • Appoint a responsible Principal for all RICS communication
  • Register with RICS for regulation of the firm by Regulatory Board
  • Arrange PII and send details to RICS
  • Set up procedures for client money handling
  • Obtain RICS approval for the Complaints Handling Procedure
  • Set up a complaints log
81
Q

What is the Statutory compliance for starting a new practice? (9)

A
  • Requirement to disclose business name
  • Equality Act compliance
  • Financial services compliance
  • Bribery Act compliance
  • Appoint a AML officer
  • H&S/Asbestos compliance
  • Estate Agency compliance (Estate Agents Act 1979, Consumer Protection Regs 2008, Misrepresentation Act 1967)
  • Inform HMRC
  • Ensure Insurance compliance
82
Q

What is the RICS compliance for closing a practice? (5)

A
  • Inform RICS
  • Inform clients and make handover arrangements
  • Return any monies held
  • Inform insurers
  • Retain a copy of client files for a min 6 years
83
Q

What are the three main areas of offence under Proceeds of Crime Act 2002?

A
  1. Concealing criminal property
  2. Arrangements
  3. Acquisition, use and possession
84
Q

What are the four main offences of the Bribery Act?

A
  1. Bribing someone
  2. Accepting a bribe
  3. Bribing a public official
  4. Failure by a commercial organisation to prevent bribery
85
Q

What is a locum?

A

Another professional who is appointed to take over in the event of death or incapacity to work.

86
Q

What is the maximum excess for 2022 (PII)?

A

£10 mil or less turnover = 2.5% of sum insured or £10k
£10 mil or above = no limit

87
Q

What is the RICS Levitt Report?

A

Commissioned by the RICS following a Treasury management audit in 2018.

Following the report RICS accepted Levitt’s recommendations including:-

  1. RICS Governing Council to have more oversight of internal dealings
  2. RICS Governing Council are to be briefed by Management Board as opposed to single CEO
  3. RICS Governing Council to oversee executive management bonuses.
88
Q

What key challenges does Global Economic Recession present to your area of surveying?

A
  1. Rising inflation of around 10-11% = BOE increasing base rate which caused a large increase in borrowing costs.
  2. Online shopping meaning high streets and shopping centres are less attractive.

APC (16 decks)

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