Ethics, Rules of Conduct & Professionalism Flashcards
1
Q
What is rule 1 of the RICS Rules of Conduct?
A
Be honest, act with integrity and comply with personal obligations, including obligations to RICS
2
Q
What is rule 2 of the RICS Rules of Conduct?
A
Maintain professional competency and ensure that services are provided by competent individuals who have the necessary expertise
3
Q
What is rule 3 of the RICS Rules of Conduct?
A
Provide good-quality and diligent service
4
Q
What is rule 4 of the RICS Rules of Conduct?
A
Treat others with respect and encourage diversity and inclusion
5
Q
What is rule 5 of the RICS Rules of Conduct?
A
Act in the public interest, take responsibility for your actions and act to prevent harm, and maintain public confidence in the profession
6
Q
When was the RICS founded?
A
1868
7
Q
When was the Royal Charter awarded to the RICS?
A
1881
8
Q
How many members are there currently?
A
134,000
9
Q
What are the four levels of membership?
A
- FRICS
- MRICS
- AssocRICS
- Student
10
Q
How many members are on the Governing Council of the RICS?
A
21
11
Q
How many specialist professional groups are there and what three areas do they cover?
A
There are 17 groups covering property, land and construction.
12
Q
Who is the current President?
A
Ann Gray FRICS
13
Q
What is Levitt Review?
A
The Levitt Review was an independent review which took place in 2021 exposing the lack of clarity, structure and purpose of RICS governance arrangements.
14
Q
P.E.R.S.S.S.D.
What is the Bichard Review?
A
The Bichard Review followed the Levitt Review in June 2022 making seven key recommendations:
* P - Increased focus on the public remit interest of the RICS.
* E - Renewed focus on engaging with members, especially younger members.
* R - Independent review every 5 years.
* S - Maintaining self-regulation through independent regulation.
* S - Simplified govenance structure.
* S - Greater leadership on issues that matter most to society, such as sustainability.
* D - Increased focus on diversity.
15
Q
There are three…
What is the role of the RICS?
A
Promotes and enforces the high standards in the development and management of land, property and construction
Three main roles:
- To maintain the highest standards of education and training
- To protect consumers through strict regulation of professional standards
- To be the leading source of information and independent advice on land, property, construction and associated environmental issues.
16
Q
There are five…
What are the benefits of being an RICS member?
A
- Status- Your professional credentials provide unrivalled client confidence.
- Recognition- Promotion of your professional excellence to governments and markets.
- Market advantage - RICS status and standards gives you a competitive advantage.
-
Knowledge - International practice standards, professional guidance, CPD & knowledge sharing.
5.Network- Access to 125,000 professionals worldwide.
17
Q
What are the three benefits of regulation for firms?
A
- Confidence - for clients as regulated firms are monitored by RICS regulation.
- Professionalism - firms will have to provide clear, impartial and expert advice.
- Security - firms have to have a recognised complaints procedure, access to free independent redress and PII cover.
18
Q
RICS ‘Rules for the regulation of firms’ 2022 states that:
A
- If 50% of Principals of a UK firm are RICS members then it has to be regulated, and if at least 25% then the firm can apply to be regulated.
- Principals are sole practitioners, directors, partners etc - anyone without supervision.
- Each firm must nominate a ‘responsible principal’ - responsible for RICS compliance, requirements and reporting
19
Q
What are the six areas of information required in an annual return for RICS registration?
A
- Types of business and staffing details
- Statutory regulated activities - such as financial services
- Nature of clients
- Complaints handling procedure details and records
- Professional indemnity insurance details
- Whether the firms holds clients’ money
- Name of the responsible principal
20
Q
As per Appendix of the Rules of Conduct, RICS members must…
A
- Comply with CPD requirements set by RICS
- Cooperate with RICS
- Promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf.
21
Q
As per Appendix of the Rules of Conduct, RICS-regulated firms must…
A
- Publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
- Ensure all works is covered by professional indemnity cover.
- If a sole principal, make appropriate arrangements for the continuation of work in the event of their incapacity, death, absence from work etc.
- Cooperate with RICS.
- Promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf.
- Display on business literature that they are regulated by the RICS.
- Report matters to the RICS which they are required to report under the Rules for the Registration of Firms.
22
Q
What is the RICS Ethics decision tree?
A
23
Q
Why would a firm or member receive a disciplinary procedure?
A
If they fail to…
1. Protect the public
2. Uphold the public confidence in the profession
3. Uphold professional standards
24
Q
What are the three levels of disciplinary action:
A
- Action by Head of Regulation
- Regulatory Tribunal
- Appeal Panel
25
Once an investigation is complete, if found guilty, what four actions could the Head of Regulation initiate as disciplinary action?
1. Serve a **Fixed Penalty Notice**.
2. Make a **Regulatory Compliance Order**.
3. Refer the matter to a **single member of the Regulatory Tribunal** for consideration.
4. Refer the matter directly to a **Disciplinary Panel**.
26
What is a Regulatory Compliance Order?
It is a written document which states the terms upon which the member or firm must take to desist from taking certain actions in a specified time period, and an agreement to pay a fine.
27
Tell me about a Regulatory Tribunal Disciplinary Panel?
* The procedure is used in the case of **serious breaches of conduct**.
* The panel can include non-RICS members.
* Penalties can include:
1. Issue a **Regulatory Compliance Order**.
2. Impose an **unlimited amount of fine** per breach but it must be proportionate to the offence
3. Impose conditions upon future continued RICS registration
4. **Expulsion** from membership or remove a firm
5. Require publication of the results of the hearing
28
What is the RICS stance on social media use?
The RICS published a Guidance Note for members in 2021, titled "Use of Social Media: Guidance for RICS members, 2021".
* In this document the RICS notes the importance of social media networks to members and firms. It reminds members of the high standards of professional behaviour expected of RICS members and that the Rules of Conduct protect the interests of members and the profession as a whole.
29
RICS is likely to investigate concerns about social media posts where they involve:
* Discrimination
* Dishonesty
* Abusive and threatening behaviour
* Bullying, harassment or victimisation of a person or people
* a pattern of frequent or a large number of concerning communications
* ignoring previous advice or warnings about concerns
* endangering public confidence in the RICS
30
RICS will be unlikely to investigate a social media post which:
* is critical of an organisation, its policies and performance, rather than of individuals
* use professional and respectful language
* are removed if requested to do so
31
When negotiating fees, firms should avoid:
* Price fixing
* Aggressive fee cutting (healthy competition is encouraged)
* Collusion with competitors
32
What legislation and rules should referral fees be considered alongside?
* Bribery Act 2010
* RICS Rules of Conduct
33
Tell me about an example where agents have been found guilty of price-fixing?
Four Somerset estate agents who colluded to set minimum commission rates were prosecuted and fined by the Competition and Markets Authority, after illegal price-fixing in March 2017.
34
Terms of engagement must include the following:
1. Proposed fee basis
2. Payment of expenses (and how calculated)
3. A statement confirming that firm's complaints handling procedure is available upon request.
35
# C.I.T.
Before beginning work on an instruction you must:
1. Check you are professionally **c**ompetent
2. Check there are no conflicts of **i**nterest or personal interests
3. Confirm **t**erms of engagement in writing and get written approval from the client BEFORE you start work on an instruction.
36
Section 18 of the Estate Agents Act 1979 requires what?
For the agent to give the client written particulars of the circumstances in which the client would be liable to pay the agent for his work, before any contract was entered into.
i.e. Set out Terms of Engagement clearly.
37
How many days cooling off period does the Consumer Rights Act 2015 allow?
14 days from the date of agreement.
38
It may be appropriate to decline an instruction for one of the following reasons:
* You are **competent** to undertake the work - it is outside your limitations
* You do not have **sufficient facts** on the issue
* The proposed client will **not sign your terms of engagement** and/or complete AML checks
* There is a **conflict of interest** or personal interest
* A Professional Indemnity Insurance **liability cap cannot be agreed**
* The advice is for a friend or on a pro bono basis (for example free of charge for a charity) and your **professional indemnity insurance will not cover work carried out on a personal basis**
* The potential client is included in the **UK Government's sanctions list**
* Would you be content for your **actions to be made public** - in the newspapers or internet?
39
What is a conflict of interest?
When a member or firm's **independence and impartiality is threatened** due to the existence of a conflict between two clients.
40
Provide an example of a conflict of interest.
* Any financial interest
* A personal interest
* Commercial relationships
* Acting on both sides of a transaction (DUAL AGENCY)
41
Conflict avoidance vs. Conflict management
* **Conflict avoidance** is when you do not accept the instruction
VS.
* **Conflict management** is when the instruction is accepted, and steps are agreed and put in place to manage the conflict, such as an information/ethical barrier, with the written agreement of all parties.
42
RICS Global Professional Statement on Conflicts of Interest, 2017 states that...
* **A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest**, other than where those who are, or may be affected have provided their informed consent.
* **Informed consent** may only be sought where the RICS member or regulated firm is satisfied that proceeding despite a conflict of interest is in the interests of all of those who are or may be affected is not prohibited by law.
43
What are the three types of conflicts of interest?
1. A **'Party Conflict'** relating to work on the same or related instruction for two different parties.
2. An **'Own Interest Conflict'** relating to a personal interest.
3. A **'Confidential Information Conflict'** relating to work between two parties that is confidential.
44
How many steps are there in handling a conflict of interest?
Three
45
What is step one of handling a COI?
**Conflict avoidance**
Upon receipt of the full facts, **consider whether the conflict is irresolvable** becasue your impartiality is compromised and should be avoided or whether it can be properly managed maintaining transparency and openness.
**Decide whether you want to accept or decline the instruction** from Client A and Client B.
46
What is step two of handling a COI?
**Written advice to both parties**
Write to Client A and Client B covering the following three points:
* **Disclose the nature of the conflict** and set out your proposals for how the firm intends to deal with client.
* Be as clear as you can and **ensure both parties can make their own decision**.
* Request written confirmation of both clients **informed consent**.
47
What is step three of handling a COI?
**Conflict Management**
Once you have recieved written consent from Client A and Client B, set up an information barrier in accordance with the provisions agreed with both clients.
48
How do your operate an information barrier?
* **No information must pass** between the two parties.
* **'Reasonable steps'** must be taken to operate an effective barrier.
* The surveyors must be **physically separated**. Preferably by different floors of a building and with separate support teams.
* All information should be **securely stored**.
* Keep a **clear audit trail** of all actions of the transaction.
49
What is dual agency?
Where an agent has a **contractual agency relationship** with both **the seller and the buyer** at the same time.
This is banned by RICS from 1st January 2018.
50
What is the RICS stance on multiple introductions?
This is dealt with under the **RICS Professional Statement: Conflicts of Interest - UK Commercial Property Market Investment Agency, 2017**.
It depends whether the opportunity is introduced on an **exclusive basis** or **non-exclusive basis**.
If it is exclusive you cannot introduce the opportunity multiple times, however, if it is non-exclusive you can act but only with **informed consent** from each of the parties involved.
51
Exclusive basis vs. Non-exclusive basis for multiple introductions?
If the appointment is on an **exclusive basis**, other prospective buyers with whom the agent was in contact with must be informed that the agent is no longer able to advise them.
If the appointment is on a **non-exclusive basis**, the agent must obtain **informed consent** from the client(s) subject to the necessary information barriers being in place.
52
What is incremental advice?
Where an agent is approached by another party to provide advice, to include valuation, building surveying or planning, related to a purchase or disposal that is incremental to an existing instruction.
Incremental advice can be provided if consent is given and an information barrier is put in place before providing any incremental advice to the prospective buyer.
53
What is personal interest conflict?
This arises when acting for a family member, a close business associate or someone with whom you have a financial or personal interest or benefit (known as a 'connected person').
Full transparency is required. Any declaration will be required prior to instruction.
54
Please provide an example where you have dealt with a conflict of interest?
Purchaser requesting information on level of required bid on 12 Riverwalk.
55
What is a bye-law?
a rule made by a company or society to control the actions of its members.
56
What is RICS' policy on confidentiality?
* RICS Bye Laws state that 'client confidentiality must be maintained for all client affairs'.
* The client must be informed before any of their information is shared with a third-party.
* All old files should be held for a minimum of 6 years before disposal and destroyed securely.
* Any confidential material received in error should be disposed of securely.
57
What is a CHP?
Complaints Handling Procedure.
58
When was RICS Guidance Note on Complaints Handling released?
2016
59
Details of a firm's CHP should be issued at the same time of what?
Terms of Business.
60
Firms must include an RICS approved A... D... R... mechanism in their complaints handling procedure.
Alternative Dispute Resolution
61
What is the procedure for complaint handling at stage one (in-house)?
* Details of the **CHP should be issued whenever the firm receives a complaint** from a valid complainant to whom the firm owes **a duty of care**.
* The procedure must be **quick, clear, transparent,** and impartially implemented.
* Details of the **nominated person** who will investigate the complaint (The Complaints Handling Officer) must be stated as the person to be contacted in the first instance.
* The complaint must be made **in writing**.
* Procedures and strict timescales for the investigation of the complaint should be **recorded**.
* A complaint should be **acknowledged within 7 days** and **investigated within 28 days**.
62
What is the procedure for complaint handling at stage two (ADR - Third Party Resolution)?
* If the complainant is not happy with the review, the second stage of the CHP involves using an independent redress scheme that the firm has chosen to use
* The name of the appropriate redress mechanism must be provided to the complainant such as The Centre for Dispute 'Resolution (CEDR}, The Property Redress Scheme and the RICS Dispute Resolution Service
63
How would a sole practitioner handle a complaint?
A sole practitioner must nominate a surveyor in another firm to act as their complaints handling officer
64
What are the four requirements for Continued Professional Development (CPD)?
1. Members shall undertake a **minimum of 20 hours** CPD per annum.
2. Of the 20 hours, **at least 10 hours must comprise Formal CPD**. The remainder can comprise Informal CPD.
3. All members must maintain a relevant and current **understanding of RICS Rules of Conduct** during a rolling 3-year period.
4. All members must record their CPD activity using the **RICS CPD Management System** available on the RICS website.
65
What are the four requirements for Continued Professional Development (CPD)?
1. Members shall undertake a minimum of 20 hours CPD per annum.
2. Of the 20 hours, at least 10 hours must comprise Formal CPD. The remainder can comprise Informal CPD.
3. All members must maintain a relevant and current understanding of RICS Rules of Conduct during a rolling 3-year period.
66
What is formal CPD?
* This includes all forms of structured learning that has clear learning objectives and outcomes.
* Examples include structured online training, courses, seminars and self-managed learning that can bE assessed by an expert third party.
67
What is informal CPD?
* This includes any self-managed learning that is relevant or related to your professional role.
* The RIGS provides clear advice on the definition of both forms of CPD on their website and a useful decision tree to decide whether the CPD is formal or informal.
68
PII stands for what?
Professional indemnity insurance
69
What is the purpose of PII?
* To protect clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises.
70
All PII policies must be underwritten by an...
RICS approved insurer.
71
What is your company's PII cap?
* £1,000,000 - Liability cap
* £5,000,000 - Total insurance cover
72
What is negligence?
a breach of duty of care.
73
What is the Yianni v Edwin Edwards (1981) case?
the case established that a residential valuer instructed by a mortgagor lending institution could owe a duty of care in tort to a mortgagee purchaser relying on a valuation.
74
What is the Scullion v Bank of Scotland plc (t/a Colleys) (2010) case?
Scullion v Bank of Scotland plc (t/a Colleys) (2010) relates to a breach of the duty of care owed to Mr. Scullion in relation to a valuation report prepared for a flat in Cobham, Surrey. The Court of Appeal held that **a surveyor who provides advice on value to a lender in respect of a buy-to-let purchase does not owe a duty of care to the borrower who is seeking funding to purchase the property**. It over-turned the original court decision in the case of a "commercially astute" borrower
75
What is the Burgess v Lejonvarn (2020) case?
Burgess v Lejonvarn (2020) - established that professionals providing professional services pro bona
and without a contract owe a duty of care in tort to act with reasonable care and skill in respect of
services they provide. However, the Court of Appeal also determined that they are not under a duty to advise or give warnings, and nor are they liable for work they do not do.
76
Under the Limitation Act 1980, the limitation period for negligence on a contract is...
6 years from the date of the negligent act, breach of contract or omission.
Also, Section 14A provides an alternative limitation period of 3 years from the date of knowledge of the damage subject to the 15 years long stop from the negligent act or omission
77
Under the Limitation Act 1980, the limitation period for negligence for tort is...
6 years from the date the claimant suffered the loss
78
Negligence claims may be avoided or reduced by undertaking the following actions:
* **Clearly understand the client's objectives** and confirm precise instructions in writing in the terms of engagement
* Ensure you are **competent** to undertake the instruction
* Undertake the work in accordance with the **relevant RICS Standards and Guidance Notes**
* Make detailed **file notes** and take **photographs**
* Keep **up to date with market knowledge** and legislation and undertake and record your CPD
* **Cap the professional liability excess** on your PII policy in the Terms of Engagement
79
Regarding the handling of clients money, the RICS Rules of Conduct states that -
Firms keep client money safe and have appropriate accounting controls
80
There are six main areas of good practice as set out in the RICS Professional Statement 'Client Money Handling', 1st edition 2019 (which came into effect in January 2020):
1. **Holding** client money
2. **Providing information** to clients
3. **Receipts** of client money
4. **Payments** from client accounts
5. **Accounting** records and controls
6. **Compliance**
81
Clients' money can include...
* holding deposits
* rent
* service charges;
* and retentions.
82
RICS compliance in relation to starting a new practice includes...
* Inform RICS of your new practice by completing a Firm Detail Form
* Appoint a Responsible Principal for au RICS communication (previously known as the Contact Officer)
* Register with RICS for regulation of the firm by the Regulatory Board
* Arrange Professional Indemnity Insurance and send details to RIGS
* Set up procedures for the requirements for Client Money Handling, including a Protection Scheme
* Begister for the RIGS Valuer Registration Scheme (VRS) if undertaking Red Book Global valuation work
* Obtain RICS approval for the Complaints Handling Procedure
* Set up a complaints log
* Appoint a Complaints Handling Officer (or elect a surveyor in another practice if a sole practitioner)
* Use a logo kit from the RICS for all practice material to comply with the designation 'Regulated by RICS'
* Plan for succession/future running of the business if a sole practitioner
* Ensure CPD logged online on the RICS CPD Management System and set up a staff training plan
* Ensure completion of an online RIGS Annual Return at the end of each year
83
Statutory compliance in relation to starting a new practice includes...
* Requirement to disclose business name
: Disability discrimination compliance (Equality- Act 2010)
* Financial services compliance {Financial Services and Markets Act 2000, Financial Services Act 2012)
* Bribery Act 2010 compliance
* Appoint a Money Laundering Reporting Officer (Money Laundering Regulations 2017, as amended) Health and Safety compliance (Health & Safety Act 1974, as amended)
* Asbestos register (Control of Asbestos Regulations, 2012)
* Fire Safety compliance (Regulatory Reform (Fire Safety) Order 2005)
* Register for data protection (General Data Protection Regulation 2016 and Data Protection Act 2018)
* Estate agency compliance (Estate Agents Act 1979, Consumer Protection Regulations 2008, Misrepresentation Act 1967 et al)
* Inform HMRC for VAT and Tax registration (VAT registration threshold is currently £85,000 p.a. turnover)
* Ensure compliance with current employment law, i.e. National Living Wage, working hours, stakeholder pensions, gender pay gap reporting etc.
* Ensure insurance compliance for employer and public liability
84
RICS compliance in relation to closing a practice includes...
* Inform the RICS of your retirement/closure
* Ensure clients are informed at the earliest opportunity and hand over arrangements made to a new firm
* Return any monies held by clients to their own accounts
* Inform insurers and procure professional indemnity insurance run-off cover for a minimum of 6 years from the expiry of the policy in force at the time of cessation in accordance with RICS requirements
* Retain a copy of the client files and records for a minimum of 6 years
85
What are the two key pieces of legislation with regard to gifts, bribery and corruption?
* Bribery Act 2010
* Proceeds of Crime Act 2002
86
What does the Bribery Act aim to accomplish?
It aims to reduce bribery in business in UK and abroad
87
What constitutes a bribe?
A bribe can be the giving, offering, promising or receiving of an advantage such as a payment, gif service for an action which is illegal or a breach of trust
88
What are the six key principles which the Bribery Act is based on?
1. Proportionality
2. Top level commitment
3. Risk·assessment
4. Due diligence
5. Communication
6. Monitoring and review
89
What are the four offences relating to bribery?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official; and
4. Failing to prevent bribery
90
Are companies responsible for their employees' corrupt acts?
Companies are responsible for their employees' corrupt acts unless they can show that they had adequate policies and procedures in place to combat bribery.
91
YES or NO?
Government guidance states that hospitality is not prohibited by the Act.
Yes - Government guidance states that hospitality is not prohibited by the Act.
92
What steps can companies take to prove they have taken the steps to prevent bribery?
* identification of potential risks,
* staff training,
* provision of clear policies
* regular reviews
93
What is the maximum penalty for breaching the Bribery Act?
If this Act is breached, there is a **maximum penalty of 10 years imprisonment** and /or an **unlimited fine** for individuals; companies face an unlimited fine.
94
Who polices the Bribery Act?
Serious Fraud Office
95
What is money laundering?
Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate assets.
96
The statutory regulation on money laundering is known as?
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Pay Regulations, 2017 (as amended in 2019)
97
The key provisions of the 'Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Pay
Regulations, 2017 (as amended in 2019)' are?
1. A requirement to have a **written** money laundering and terrorist financing **risk assessment**
2. Implement **systems, policies and controls and procedures** to address money laundering and terrorist financing risks and meet the requirements under the regulations
3. Adopt appropriate **internal controls**
4. Provide staff **training**
5. Comply with new customer, enhanced, and simplified **due diligence requirements**
6. Comply with the requirements relating to **politically exposed persons** (PEPs)
7. Ensure appropriate **record keeping, policies and procedures**
8. **AML checks** must be undertaken to confirm the identity of the proposed **purchaser** of a property and check the purchaser's **source of funds** by the vendor's agent before contracts are exchanged.
9. To **include additional high-risk factors** when assessing the need for enhanced due diligence, and seek additional Information and monitoring in certain cases, e.g. where there are transactions between parties based in high-risk third countries
98
AML check must be completed on any transaction equal to or above what?
£100,000 per annum
99
AML checks must be completed on four different parties in a transaction. What are they?
vendors, purchasers, landlords and tenants
100
* Firms must have policies to identify and scrutinize transactions which are:
* Complex or unusually large, or
* contain unusual patterns of transactions, or
* are without apparent economic or legal purpose
101
In terms of AML procedures, what are the the levels of Customer Due Dilligence?
* **Identify the client** and **verify their identity** based on a reliable independent source ( .g. passport, driving Iicence or electronic identification}
* Make reasonable endeavours to **identify the beneficial owners** of the client (and to verify the identity of the person responsible for managing it if not able to do so in the Persons of Significant Control register at Companies House)
* For a company, its **name**, **company number** and **address** of the registered office is required
* The **names of the directors** are required unless the company is listed on a regulated market (such as the London Stock Exchange)
* Obtain information on the **purpose and intended nature of the business relationship** and **proposed funding arrangements** as appropriate
102
The levels of Enhanced Due Dilligence consist of...
* Additional procedures are required for any transaction or business relationship involving a person established in a **'high risk third country'** or a **'politically exposed person'** (PEP) or a PEP family member/ business associate. Essentially EDD procedures require additional evidence and monitoring
* A PEP is a term describing someone who has been **entrusted with a prominent public function**
* A PEP generally presents a **higher risk for potential involvement in bribery and corruption** by virtue of their position and the influence that they may hold
* More **detailed examination of the background and purpose of the transaction** and increased monitoring
103
What is the limit for accepting cash for a transaction?
* There is a limit of 10,000 Euros for the acceptance of cash
104
What are the penalties for failing to comply with regulations?
* Maximum **14 years prison sentence and/or unlimited fine** for **assisting with money laundering**
* Maximum **5 years prison sentence and/or unlimited fine for tipping off a person** by informing them that they are under suspicion for money laundering or for **failing to report suspicion**
105
What is required for money laundering checks on a PLC?
London Stock Exchange listing
106
What is required for money laundering checks on a publicly accountable body?
Government ownership / control
107
What is required for money laundering checks on a private limited company?
Certificate of Incorporation
Full name, registered number, registered office, business address, names of all directors and names of all shareholders with 25% or more holding. Identification of a higher risk client
N.B. Report any discrepancies to Companies House
108
What is required for money laundering checks on a private individual?
Copy of valid passport or driving licence with photo
Copy of a bank statement, credit card bill, council tax statement or utility bill to show evidence of address, not more than 3 months old
109
What are the red flags associated with money laundering property professionals should be aware of?
* 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
110
What does the Proceeds of Crime Act 2002 aim to accomplish?
Provides powers for enforcement authorities in the UK to recover in criminal and civil proceedings money and other assets which are deemed to be the proceeds of crime.
111
What are the three main areas of offence in relation to the Proceeds of Crime Act 2002?
1. **Concealing criminal property**: if a person conceals, disguises, converts or transfers criminal property
2. **Arrangements**: if a person enters into or becomes concerned in an arrangement which they know or suspect facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person
3. **Acquisition, use, and possession**: if a person acquires, uses or has possession of criminal property
112
The RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing, 2019 sets out...
the mandatory, globally applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing
113
The RICS Professional Statement is divided into three parts consisting of...
1. Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorist financing
2. Guidance setting out supporting good practice for the above
3. Supplementary guidance on some of the concepts set out in Parts 1 & 2
114
Part 1 of the RICS Professional Statement on bribery, corruption etc. consists of...
**Bribery and corruption (S&C)**
* RICS regulated firms must:
* **Not offer or accept anything that could constitute a bribe**
* **Have procedures in place to comply with the law**
* **Report suspicion to the relevant authority**
* Act with due diligence to perform periodic written evaluations of the risks the firm faces
* Retain records to show have the firm has met the requirements of this Professional Statement
**Money laundering and terrorist financing (ML & TF)**
* RIGS regulated firms must:
* **Not facilitate or be complicit in ML and TF**
* **Have systems in place to comply with the laws**
* **Report suspicion**
* Evaluate and review the risks presented to the firm
* Use third party reliance for checks only where there is a level of confidence for the quality of information provided by the third party
* Take appropriate measures to understand the client and the purpose of the instruction
* Verify the client by undertaking basic ID checks
* Retain records to show have the firm has met the requirements of the Professional Statement
115
Part 2 of the RICS Professional Statement on bribery, corruption etc. consists of...
**Guidance**
* Practical guidance is provided such as:
* Have a **written policy in place for**, and senior management to take control of, the **procedures**
* Publish a **code of behaviour** for staff and provide staff training
* **Encourage transparency**
* Set up a **gifts register**
* Keep up to date with the **legislation**
116
Part 3 of the RICS Professional Statement on bribery, corruption etc. consists of...
**Supplementary guidance**
* Provided on a range of issues, including:
* Establishing a **'risks-based approach'**: Consider the **three 'Ws'** when assessing risks to your business:
* **Who** you act for
* **What** you are doing, and
* **Why** you are being asked to do something
* Dealing with politically-exposed persons (PEPs): They are higher risk as they hold positions of influence and enhanced due diligence is required
* The need to identify the beneficial ownership of a company, partnership or trust - such as by requesting a recent Certificate of Incorporation or Annual Return for a company
