Ethics, Rules of Conduct and Professionalism Flashcards

Question

What are the levels of Due Diligence and what do they entail?

Answer 1

1. Customer Due Diligence (CDD) - Identify the client and verify their identity - Make efforts to identify the beneficial owners of the client - Names of directors are required unless the company is listed on a regulated market - Determine the purpose and intended nature of the business relationship and proposed funding arrangements 2. Enhanced Due Diligence (EDD) - Additional procedures are required for any individuals established in a ‘High risk third country’ or a ‘politically exposed person’ (PEP) - EDD procedures require additional evidence and monitoring

Answer 2

- Inability or unwillingness of parties to provide identity documents - Changes to parties involved in transactions - Unusual transaction features, such as unexpected urgency required by parties, potential loss-making or an unusual transaction for a client - Payment of fees, purchase or rental monies in unusual currencies

Answer 3

- Turnover vs Cover Required - <£100,000 = £250,000 - £100,001-£200,000 = £500,000 - £200,001< = £1,000,000

Answer 4

o A ‘Party Conflict’ relating to work on the same or related instruction for two different parties o An ‘Own interest Conflict’ relating to a personal interest o A ‘Confidential Information Conflict’ relating to work between two parties that is confidential

Answer 5

1. Conflict Avoidance – is when you do not accept the instruction with conflict 2. Conflict Management – is when the instruction is accepted , and steps are agreed and put in place to manage the conflict, such as information/ethical barrier, with the written agreement of all parties. 3. Informed Consent: - This can only be given in writing by the party if the person explaining the position to them is entirely transparent about any material factors and sure that the party affected understands what they are doing. - Surveyors should only seek informed consent if satisfied that doing so is in the best interest of all parties

Answer 6

1. RICS Professional Standards - These are set requirements or expectations for RICS members and regulated firms about how they provide services or the outcomes of their actions. - These may include mandatory requirements, which use the word “must” and these must be complied with. 2. RICS Practice Information - This is information to support the practice knowledge and performance of RICS members and regulated firms 3. RICS Practice Alerts - This is a web page to provide alerts which are “key tools for warning or alerting the profession to emerging areas of risk over which the RICS has concerns”

Answer 7

* Firms should avoid price fixing, aggressive fee cutting or collusion with competitors * Fees should be market-based and agreed on an ad-hoc basis with clients * Healthy competition is encouraged but aggressive fee cutting is not allowed * You can enter into further fee negotiations with a prospective client, after having submitted your initial fee proposal, having regard to the above so long as you act in a professional manner * You may wish to vary your proposed level of service when renegotiating your initial fee proposal but beware of still being able to provide a high standard of service

Answer 8

1. Check professionally competent 2. No conflicts of interest or personal interests 3. Confirm Terms of Engagement in writing and get written approval from the client BEFORE you start work on the instruction

Answer 9

o Inform RICS (Complete a Firm Details Form) o Appoint a Responsible Principle for all RICS communications o Register with RICS for regulation of the firm o Arrange Professional Indemnity Insurance o Set up Client Money Handling procedures, including a Protection Scheme o Set up CHP with complaints handling officer o Log CPD and set up staff training plan o Submit an Annual Return

Answer 10

o Inform RICS of closure and deregister o Ensure clients are informed at the earliest opportunity and handover arrangements made to a new firm o Return any monies held for clients o Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of the policy in force. o Retain a copy of client files and records for a minimum of 6 years

Answer 11

Financial Conduct Authority

Answer 12

One must consider the RICS guidelines and assess the purpose of the gift and if it will create any undue obligation. If not, then any gift below £200 can be accepted while notifying your manager and noting the girft in the gift register. Anything above £200 needs prior approval from the head of the department.

Answer 13

- Clients must always have access to funds - Client money must be kept separate and clearly identifiable - Interest on the account must be agreed with the client - Must not be overdrawn - Controls in place to keep funds secure - Competent and knowledgeable staff in charge of procedures

Answer 14

It is an insurance policy run by the RICS that protects against direct loss of funds for gross negligence

Answer 15

RICS provides a model form which has two stages minimum. Stage 1: - Acknowledge the complaint within 2 days and respond within 5, or as quickly as possible but not more than 28 days - The complaint should be handled by a senior person or a designated complaints handler - The first stage must be free. Stage 2: - If unable to resolve internally, then the complaint may be taken to an independent redress mechanism that is approved by the RICS. - It must be clear, quick, transparent and impartial - Complainant may be expected to contribute to costs incurred in this phase - All complaints, their progress and outcomes must be recorded - There is a need to inform PI insurers of complaint immediately.

Answer 16

- Bribing another person: Offering, promising, or giving a bribe to another person. - Being bribed: Requesting, agreeing to receive, or accepting a bribe. - Bribery of a foreign public official: Bribing a foreign official to obtain or retain business or an advantage in the conduct of business. - Failure of a commercial organization to prevent bribery: Failing to prevent bribery on behalf of a company by an employee, agent, or subsidiary

Answer 17

1. Identify the conflict 2. Assess the risk: Evaluate the potential impact of the conflict on all parties involved. 3. Disclose the conflict: Inform all affected parties about the conflict of interest. 4. Obtain informed consent 5. Implement safeguards: If consent is obtained, put in place measures to mitigate the risk, such as information barriers. 6. Document the process: Keep records of the conflict, disclosure, consent, and safeguards implemented. 7. Seek external advice 8. Decline to act: If the conflict cannot be managed or consent is not obtained, decline to act in the matter.

Answer 18

1. Reject the Bribe: Immediately and unequivocally reject the bribe 2. Report Internally: Report the attempted bribery to a senior member of staff or the firm's designated compliance officer. 3. Record the Incident: Create a detailed record of the attempted bribery. 4. Consider Legal Advice: Seek legal advice to understand the legal implications of the attempted bribery and any obligations to report it to external authorities. This is cruciaeport Extern 5. Report Externally (If Required): Report the attempted bribery to the appropriate external authorities, such as law enforcement agencies or regulatory bodies, if legally required or if deemed necessary. The decision to report externally should be made in consultation with legal counsel.

Answer 19

The Financial Conduct Authority

Answer 20

The National Crime Agency (NCA)

Answer 21

1. Do not tip off 2. Report internally - immediately report this to your firms Money Laundering Reporting Officer (MLRO) 3. Follow internal Procedures 4. Document concerns and records of all suspicious activity 5. MLRO will then assess the information and if suspect money laundering, then they will make a report to the NCA via a Suspicious Activity Report (SAR) 6. Maintain confidentiality regarding suspicious activity.