Ethics, Rules of Conduct and Professionalism Flashcards
What is the role of the RICS
1 – Maintain the highest standards of education and training
2 – Protect the consumers through strict regulation of professional standards
3 – Leading source of information and independent advice on land, property, construction & associated environmental issues.
What year was RICS founded? And when did it receive its Royal Charter
1868 and 1881
Who is the current CEO of RICS? and who is the President and President Elect
CEO: Justin Young, President: Justin Sullivan, President Elect: Nicholas Maclean
What was the purpose of the Bichard Review for RICS?
Clarify the purpose of RICS and its responsibility to act for the public advantage
How many recommendations did the Bichard Review make?
36 recommendations
List three key themes of governance recommended in the Bichard Review.
- A renewed and increased focus on the public interest remit of RICS.
- Maintaining Self-regulation
- Increased focus on diversity and inclusion
- Greater regional support, with increased member engagement and a renewed focus on younger members
- Undertaking an independent review of RICS’ governance and delivering against its charter every 5 years
- A new simplified, clear, and accountable governance structure
- Showing greater leadership on issues that matter most to society
What are the five foundations published by RICS in November 2023?
- Vision – A built environment that is sustainable, resilient and inclusive for all
- Mission – Inspire members, Advance knowledge, Uphold standards
- Strategic Goals – Lead and influence on sustainability, Attract a diveser next generation, Strengthen trust in the profession, Enhance member value and engagement
- Values – Professional, Collaborative, Inclusive, and Ambitious
- A World Class Organisation – An efficient, effective and inspiring professional body that is easy to do business with
What is a benefit of being an RICS member?
- Status
- Recognition
- Market advantage
- Knowledge
- Network
What information is required for a firm to register with RICS?
- Type of business and staffing details
- Name of the responsible Principal
- Statutory regulated activities – such as for financial services
- Nature of clients
- Complaints handling procedure details and records
- Professional indemnity insurance details
- Whether the firm holds clients money
When does a firm need to register with the RICS
If 50% of Principles of a UK firm which provides surveying services are RICS members, then it has to be regulated, and if at least 25% then it can apply to be regulated
What are the five Rules of Conduct established by RICS?
- Honesty and integrity
- Maintain professional competency
- Provide good-quality service
- Treat others with respect
- Act in the public interest
What are the three levels of disciplinary action in RICS?
- Action by Head of Regulation
- Disciplinary Panel
- Appeal Panel
True or False: RICS allows dual agency practices.
False
What is the minimum CPD requirement for RICS members per year?
20 hours
All old files should be held for a minimum of ______ before disposal. for confidentiality reasons
6 years
What is the purpose of Professional Indemnity Insurance?
Protect clients, surveyors, and third parties against negligence claims
What should firms do if they lose client money?
Contact police and report to the compliance officer
What is one of the six principles of Bribery outlined in the Bribery Act 2010?
- Proportionality
- Top Level Commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitoring and Review
What is the limit for accepting cash under anti-money laundering regulations?
10,000 Euros
What must firms do when starting a practice according to RICS compliance?
Inform RICS and complete a Firm Details Form
What is the role of the Money Laundering Reporting Officer?
Report any suspicions with a Suspicious Activity Report (SAR) to the National Crime Agency
What is the penalty for money laundering under the law?
Maximum 14 years prison sentence and/or unlimited fine
What is the role of the Responsible Principal in a firm?
Ensure compliance with regulatory and RICS requirements
What is the purpose of the RICS Client Money Protection Scheme?
Protect clients for claims in case of financial crimes
What are the levels of Due Diligence and what do they entail?
- 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 - 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
What are some Red Flags for potential Money Laundering?
- 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
What are the minimum requirements for firms Professional Indemnity Insurance?
- Turnover vs Cover Required
- <£100,000 = £250,000
- £100,001-£200,000 = £500,000
- £200,001< = £1,000,000
What are the types of conflicts of Interest?
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
What are some Conflicts of Interest management techniques?
- Conflict Avoidance – is when you do not accept the instruction with conflict
- 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.
- 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
What types of material does RICS put out and what is it used for?
- 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. - RICS Practice Information
- This is information to support the practice knowledge and performance of RICS members and regulated firms - 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”
What are the key points of fee negotiation
- 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
What must be considered when considering an instruction?
- Check professionally competent
- No conflicts of interest or personal interests
- Confirm Terms of Engagement in writing and get written approval from the client BEFORE you start work on the instruction
What do you have to do if you want to start a practice in terms of RICS requirements?
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
What do you have to do when closing a practice?
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
Which is the body that governs the Bribery Act 2010, Terrorism Act 2006, Terrorist Financing and Transfer of Funds Regulations 2017 (As amended 2023)
Financial Conduct Authority
What is SW’s gift policy?
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.
What processes need to be in place for handling clients money?
- 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
What is the Clients Money Protection Scheme?
It is an insurance policy run by the RICS that protects against direct loss of funds for gross negligence
What components must a complaints handling procedure include?
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.
What are the four main offences under the Bribery Act 2010?
- 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
What is the process if a conflict of interest is identified?
- Identify the conflict
- Assess the risk: Evaluate the potential impact of the conflict on all parties involved.
- Disclose the conflict: Inform all affected parties about the conflict of interest.
- Obtain informed consent
- Implement safeguards: If consent is obtained, put in place measures to mitigate the risk, such as information barriers.
- Document the process: Keep records of the conflict, disclosure, consent, and safeguards implemented.
- Seek external advice
- Decline to act: If the conflict cannot be managed or consent is not obtained, decline to act in the matter.
What must you do if offered a bribe?
- Reject the Bribe: Immediately and unequivocally reject the bribe
- Report Internally: Report the attempted bribery to a senior member of staff or the firm’s designated compliance officer.
- Record the Incident: Create a detailed record of the attempted bribery.
- 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
- 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.
Which body is responsible for financial crimes?
The Financial Conduct Authority
Who do you report bribery to?
The National Crime Agency (NCA)
What must you do if you suspect Money Laundering?
- Do not tip off
- Report internally - immediately report this to your firms Money Laundering Reporting Officer (MLRO)
- Follow internal Procedures
- Document concerns and records of all suspicious activity
- 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)
- Maintain confidentiality regarding suspicious activity.
