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RICS APC1 > Ethics, Rules of Conduct & Professionalism > Flashcards

Ethics, Rules of Conduct & Professionalism Flashcards

1
Q

What is Ethics

A

Valued based system on which we base of professional life and personal life

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2
Q

What is Regulation?

A

Preset rules that we work too, in the form of rule, regulations and laws.

RICS is self regulated.

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3
Q

Are RICS codes of practice mandatory?

A

They can be mandatory but also offer recommendations on good practice

E.G Service charge in commercial property 3rd edition.

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4
Q

What is the maximum uninsured excess for a limit of indemnity over £500,000

A

2.5% of the sum insured

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5
Q

Who chaired the independent review of the RICS in Sep 2021

A

Alison Levitt QC

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6
Q

What is RICS incorporated by?

A

Royal Charter

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7
Q

Describe the RICS Structure

(GERMP)

A

Governing Council
Executive team
Regulatory Board
Management Board
Presidential Team

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8
Q

How many years after instruction has been completed can a professional indemnity insurance claim be made?

A

15 years

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9
Q

What type of cover is needed to cover a claim brought after a firm/member ceases to trade?

A

Run-off Cover

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10
Q

What is the role of RICS?

A

Global leading professional body promoting the highest standards in the property industry

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11
Q

For professional indemnity what is the minimum limit for a turnover of less than £100k per year?

A

£250,000

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12
Q

When did the Bribery Act 2010 come into force

A

1st July 2011

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13
Q

When was the RICS founded?

A

1868

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14
Q

What is the Key objective of the RICS?
Hint - usefulness

A

To promote usefulness of the profession for the public advantage.

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15
Q

What is the role of the Privy Council?

A

Grants & awards the Royal Charter

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16
Q

Is the RICS regulated by Government?

A

No it is self regulated.

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17
Q

Name some functions of the RICS?

A

Consumer protection
Influence policy
Set standards
Accredit professionals
Quality assurance

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18
Q

If you are sole practitioner what do you need to have in place?

A

A locum to cover incapacity/death

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19
Q

Name some potential sanctions by the RICS

A

Fixed penalty notice
Consent order
Interim measure
Panel hearing
Expulsion

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20
Q

What is the purpose of professional Indemnity Insurance?

A
  1. To protect firms from financial loss in the event of a negligence claim and to cover damages
  2. To protect clients from financial losses which the firm can’t meet.
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21
Q

What does the RICS insist is a requirement in relation to PI?

A
  1. Minimum wording policy
  2. Each and every claim basis/ fully retroactive
  3. Covers past & present employees
  4. Minimum level of indemnity based on turnover
  5. Underwritten by an approved insurer
  6. Includes run-off cover
  7. Provides a maximum level of uninsured cover
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22
Q

What does the term fully retroactive/each and every claim basis mean?

A

Covers claims made during the insurance cover period irrespective of when the original act occurred.

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23
Q

What should you do if you receive notification of a Professional Indemnity Claim?

A

Inform your manager
Inform your insurer

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24
Q

What is a bribe?

A

Exchange of something of value in return for agreeing to or doing something improper

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25
Q

Can you accept a proportionate gift?

A

Yes - providing it does not compromise you impartiality/integrity

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26
Q

Name the 5 principles of better regulation?

A
  1. Transparent
  2. Proportional
  3. Accountable
  4. Consistent
  5. Targetted
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27
Q

Would it be wise to accept a gift close to the award of a key decision/tender?

A

No - it could be perceived as a bribe

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28
Q

Does the Bribery Act 2010 apply to non-UK business operating in the UK?

A

Yes

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29
Q

Name the penalties for breaching the Bribery Act

A

10 years imprisonment
Unlimited fine
Directors can be disqualified
EU-wide ban in relation to public procurement

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30
Q

Is it a corporate criminal offence to fail to prevent bribery?

A

Yes

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31
Q

Who should you report bribery too?

A

RICS
Serious Fraud Office

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32
Q

When did RICS Conflict of Interest Professional Statement take effect from?

A

1st January 2018

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33
Q

What are three types of conflict under the RICS guidance?

A
  1. Party Conflict
  2. Own Interest Conflict
  3. Confidential Information Conflict
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34
Q

Can information barriers still be used under the new RICS Conflicts of Interest guidance?

A

Yes - if appropriate

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35
Q

What is dual agency / double dipping?

A

Acting for the buyer and seller of the same property

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36
Q

How much CPD do qualified members need each year?

A

20 hours

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37
Q

What is the latest money laundering guidance called?

A

5th Anti Money Laundering Directive (2020)

Money Laundering Regulations 2017
- Register with a supervisory body
- AML compliance officer
- Staff training
- Customer due-diligence

38
Q

What is customer Due Diligence in relation to money laundering?

A

Must carry out due diligence on both parties (leasing/letting and purchase and sale transaction) before entering a business relationship.

39
Q

Name some offences under the proceeds of crime Act 2002?

A
  1. Concealing, disguising, converting or transferring criminal property.
  2. Becoming involved in an arrangement relating to criminal property
  3. Acquisition, use or possession of criminal property
  4. Disclosing tipping off that a SAR has been submitted.
40
Q

What does the RICS advise you should do if you wish to set up practice after qualifying?

A
  1. Register for Regulation by submitting firm detail form
  2. Purchase PII and other insurance
  3. Implement company policies such as H&S
  4. Use RICS designation appropriately
  5. Comply with regulations for holding client money
  6. Have a written CHP
  7. Train staff appropriately
  8. Comply with legislation e.g Companies Act 85
41
Q

What RICS guidance is there related to handling clients money?

A

RICS Professional Statement, Client Money Handling (1st Edition, Oct 2019).

RICS Client Money Protection Schemes

42
Q

When holding clients money what are the requirements of RICS?

A
  1. Designated client account
  2. Name of the firm/client in account name
  3. Terms of account holding confirmed in writing
  4. Authorised & Trained staff to handle money
  5. Regular ‘three way’ reconciliations signed of by a principle
42
Q

When holding clients money what are the requirements of RICS?

A
  1. Designated client account
  2. Name of the firm/client in account name
  3. Terms of account holding confirmed in writing
  4. Authorized & Trained staff to handle money
  5. Regular ‘three way’ reconciliations signed of by a
    principle
  6. Accounting software securely controlled and
    protected
  7. Funds banked in 3 working days
  8. Accounts should not be overdrawn
43
Q

Is a Professional Statement mandatory to follow?

A

YES!

44
Q

Is code of practice mandatory for members to follow?

A

It could be mandatory or recommended good practice

45
Q

Are guidance notes and information papers mandatory to follow?

A

NO - but they can provide a defence in a case of negligence

46
Q

What is Lionheart?

A

RICS benevolent fund

47
Q

Can an organisation be held liable under the Bribery Act 2010 if they didn’t know about the bribe?

A

Yes - strict liability applies

48
Q

What is a conflict of interest?
Hint - impedes

A

Anything that impedes or might be perceived to impede an individuals or firms ability to act impartially and in the clients best interest.

49
Q

What RICS guidance relates to money laundering and bribery?

A

RICS Professional Statement - Countering bribery and corruption money laundering and terrorist financing

50
Q

When was RICS PS - Countering bribery and corruption money laundering and terrorist financing effective from?

A

1st September 2019

51
Q

When do RICS new rules of conduct apply from?

A

2nd Feb 2022

52
Q

What do the new RICS Rules of Conduct replace?

A

Ethical & Professional Standards
Rules of Conduct for Members
Rules of Conduct for Firms

53
Q

How many new rules are there?

A

FIVE

54
Q

What is Rule 1?

A

Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS

55
Q

What is Rule 2?

A

Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.

56
Q

What is Rule 3?

A

Members and firms must provide a good-quality and diligent service.

57
Q

What is Rule 4?

A

Members & firms must treat each other with respect and encourage diversity and inclusion.

58
Q

What is Rule 5?

A

Members & firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.

59
Q

What are the three parts of the RICS Conflicts of Interest Professional Statement?

A

Part 1. Sets out mandatory rules
Part 2. General commentary on how RICS expects the member to use the Prof state
Part 3. Supplementary guidance note - how M+F can meet their obligations

(Appendix 1 example informed consent form)

60
Q

How would you check for a conflict of interest for a firm?

A

It would depend on the size, complexity and number of businesses.

However; you can use database checks, advisory emails to staff to enquire about any individual involvement, existing record searches.

61
Q

How did you conduct an own interest conflict check?

A

I conducted a compliance check, database check and sent a company wide email

62
Q

What information was recorded during your own interest conflict check?

A

• date
• client details
• property or assignment details
• the nature of the instruction
• details of the potential conflict (if any)
• correspondence and discussions
• informed consent (if necessary/appropriate)
• results and persons responsible.

63
Q

Who is the CEO of RICS

A

Richard Collins

64
Q

Why do you want to join RICS?

A

I want to be part of a prestigious organisation and progress my career in an industry I am passionate about. It will also provide a level of recognition amongst and allow greater work opportunities

65
Q

What are the Disciplinary procedures for RICS

A

3 levels

  1. Action by head of regulation
    - fixed penalty notice for not sharing info
    - consent order fine of £2k
    - referral to disciplinary panel
  2. Action by Disciplinary panel
    - consent order
    - unlimited fine
    - temp/suspension expulsion
    - publication of the result
  3. Appeal Panel
    - fixed penalty notice
    - disciplinary panel findings
    - conditions placed on registration
66
Q

4 offences under bribery act 2010

(Think about crimes relating to bribery)

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent a bribe
67
Q

Name the 3 obligations for members

(CCP)

A
  1. Comply with CPD requirements
  2. Co-operate with RICS
  3. Promptly provide information requested by Standards & Regulation Board
68
Q

Name the 7 obligations for firms

(CPLCPDR)

A
  1. CHP with an ADR approved by RICS, keep a complaints log
  2. PII
  3. Locum
  4. Cooperate with RICS
  5. Promptly provide info to standards and regulation board
  6. Comply with designations
  7. Report to RICS any matter required under obligations
69
Q

Regulation for new practice

A

Comply with

  • Business names act
  • Bribery Act
  • Control of asbestos regulations
  • Data protection
  • Financial services Act
  • Inform HMRC
  • Money laundering regulation 2007
70
Q

What is the process for closing down a firm?

A
  1. Inform RICS
  2. Inform clients
  3. Return clients money
  4. PII - 6 years run of £230k minimum
  5. Retain clients files (6 years)
71
Q

What are turnover limits for PII?

A

Less than £100k = £250,000 excess
£101k - £200,000 = £500
Over £200k = £1mill

72
Q

How many by-law are there and can you name an RICS by-law?

A

10 and yes designations and contribution to funds (membership fees)

73
Q

Can you tell me your complaint handling procedure?

A
  1. 2 stage complaint procedure
  2. 7 days to acknowledge
  3. 21 days for substantive reply
  4. Stage 2 is a redress system
  5. Property Ombudsman (could use property redress scheme)
74
Q

Penalties for breach of bribery act?

A

Upto 10 years in prison
Unlimited fine

75
Q

Penalties for breach of Money laundering regulations?

A

Upto 14 years in prison
Unlimited fine

76
Q

Principles of the Bribery Act?

A

Key principle = proportionality
Also
- due diligence
- monitor & review
- Risk assessment
- communication
- top level commitment

77
Q

What is the key principle of RICS conflicts of interest professional statement global 2016?

A

Informed Consent

78
Q

What are some red flags for money laundering?

A

Large payment in cash
Secretive about fund origins
Links to or reside in high risk areas such as Yemen, Russia or North Korea etc

79
Q

Can you provide an example of where you have advised a client around ethics?

A

Yes- when conducting a letting I was approached and asked what the highest current bid was and I advised my client to not disclose this as it would result in the informal tender not being fair and transparent - there might also be issues with data protection and we should not share that data with other bidders.

80
Q

Would you undercut another practice?

A

No - however you could adjust your scope to that of a lesser service for a reduced fee, but you would not provide the same service at a lower rate.

81
Q

Explain what you know around countering bribery and corruption money laundering and terrorist financing 2019?

A

Professional statement which outlines the need for proper due diligence such as enhanced or simplified checks.

82
Q

Explain what you know around countering bribery and corruption money laundering and terrorist financing 2019?

A

Professional statement which details the need for proper due diligence such as enhanced or simplified checks.

83
Q

When have you acted with integrity?

A

I was asked to provide a telecoms valuation for my client who was acting on behalf of a housing association.
This was for a renewal and on the telecoms?

84
Q

What would you do if you became suspicious that a client was involved in money laundering?

A

Report this to your firms compliance officer

Not to tell the client of your suspicion as this could be tipping off and a criminal offence

Report to NCA

85
Q

Why did you keep offers confidential?

A

The offers were not revealed as this was informal tender and bids were sealed, compliance with the estate agents act which outlines honesty and transparency.

86
Q

Name three examples of clients money?

A

➢ tenants’ deposits
➢ rents
➢ service charges
➢ interest credited to a client account (unless interest is retained by the firm by agreement)
➢ Arbitration fees
➢ fee money taken in advance
➢ clients’ money held but due to be paid to contractors
➢ sale proceeds and deposits

87
Q

Provide an example behaviour for rule 1?

A

identify actual and potential conflicts of interest

88
Q

Provide an example behaviour for rule 2?

A

Only undertake work that they have the knowledge, skills and resources to carry out competently

89
Q

Provide an example behaviour for rule 3?

A

Agree with clients the scope of the service to be provided and its limitations, and timescales for the work

90
Q

Provide an example for rule 4?

A

respect the rights of others and treat others with courtesy

91
Q

Provide an example behaviour for rule 5?

A

respond to complaints made against them promptly, openly and
professionally

RICS APC1 (18 decks)

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