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RICS APC - P&D Pathway > Ethics, Rules of Conduct & Professionalism > Flashcards

Ethics, Rules of Conduct & Professionalism Flashcards

1
Q

When was the RICS founded?

A

1868

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2
Q

How many members does the RICS have?

A

Over 140,000

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3
Q

What are the four levels of membership?

A

FRICS, MRICS, AssocRICS and Trainee / Student.

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4
Q

What do you need to do to become a fellow?

A
  • Evidence of achievement of four fellowship characteristics, which include five or more years at MRICS, a leadership role, professional / technical achievement, academic achievement or raising the profile of the RICS.
  • A portfolio of professional achievement to support the application is required to include within your CPD record.
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5
Q

How many members does the current governing council have?

A

Over 20 members

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6
Q

How many specialist groups are there within the RICS?

A

17

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7
Q

Who is the current CEO?

A

Justin Young

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8
Q

Who is the current president?

A

Tina Paillet

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9
Q

What is the role of the RICS?

A

To promote and enforce the highest professional qualifications and standards in the development of land, construction, real and infrastructure.

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10
Q

Who are the RICS accountable to?

A

Members and the public

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11
Q

What are the three main roles of the RICS?

A
  1. To maintain the highest standards of education and training.
  2. To protect consumers through strict regulation of professional standards.
  3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues.
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12
Q

What was the Bichard Review?

A

Consultation with members and external stakeholders recommended a quick and phased approach to the adoption of clear responsibilities for governance by key individuals.

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13
Q

Has the RICS adopted all of the Bichard recommendations?

A

Yes - the changes are on-going

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14
Q

What is the aim of the Bichard Review?

A

To deliver a member-led public interest focussed RICS with 5 key themes of governance, strategy, people, culture and values of member service.

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15
Q

What was the outcome of the recent council elections that took place in April 2023?

A

Members are now elected to better reflect the geographical location and disciplines.

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16
Q

What new chairs have the RICS adopted after the April elections?

A

RICS has recruited diversity, equity, and inclusion & sustainability panel chairs to lead priority issued as part of the new structure.

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17
Q

How many recommendations did the Bichard Review make?

A

36 in 7 key areas

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18
Q

What 5 future foundations in November 2023 did the Bichard review publish?

A

Vision – A natural and built environment that is sustainable, resilient and inclusive for all.
Mission – Inspire members, advance knowledge, and uphold standards.
Strategic goals – Lead and influence on sustainability, attract a diverse next generation, strengthen trust in the profession and enhance member value and engagement.
Values – professional, collaborative, inclusive and ambitious.
A world class organisation

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19
Q

What are the 5 benefits of being a RICS member?

A

Status
Recognition
Market Advantage
Knowledge
Network

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20
Q

Can a firm register to the RICS if they do not have a member?

A

No

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21
Q

What practices can join the RICS?

A

Corporate body, a partnership, sole practitioner or a LLP.

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22
Q

What must registered firms do annually to the RICS?

A

Firms must annually make a return to the RICS confirming their compliance with their obligations.

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23
Q

When did the new rules of conduct become effective?

A

2nd February 2022

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24
Q

What information is required by the RICS for registration?

A
  1. Type of business and staffing details
  2. Name of the responsible principal
  3. Statutory regulated activities – such as for financial services
  4. Nature of clients
  5. Complaints handling procedure details and records
  6. Professional indemnity insurance details
  7. Whether the firm hold clients’ money
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25
Q

What are the 5 rules of conduct?

A
  1. Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to the RICS.
  2. Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
  3. Members and firms must provide good quality and diligent services
  4. Members and firms must treat others with respect and encourage diversity and inclusion.
  5. Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
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26
Q

What must RICS members do?

A
  1. Comply with the CPD requirements set by the RICS
  2. Cooperate with RICS
  3. Promptly provide all information reasonably requested by the standards and regulation board, or those exercising delegated authority on its behalf.
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27
Q

What must RICS regulated firms do?

A
  1. Publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
  2. Ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover
  3. If having a sole principal, make appropriate arrangements for their professional indemnity cover that meets the standards approved by RICS.
  4. Cooperate with RICS
  5. Promptly provide all information reasonably requested by the standards.
  6. Display on their business literature, in accordance with RICS published policy on designations.
  7. Report to RICS any matter that they are required to report under the rules for the registration of firms.
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28
Q

What does the RICS decision tree do?

A

The decision tree provides a framework of questions which members should ask themselves which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical issues manner or situation.

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29
Q

What are the three levels of disciplinary action?

A
  1. Action by head of regulation
  2. Disciplinary panel (drawn from the independent regulatory tribunal)
  3. Appeal panel
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30
Q

What four actions can follow if the head of regulation consider that disciplinary action is required?

A
  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.
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31
Q

What is a fixed penalty?

A

Procedure used for breaches of the rules relating to the supply of information to the RICS by firms and members. These may consist of a fine and / or a caution.

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32
Q

What is a regulatory compliance order?

A

It is a written document which states the terms upon which the member or firm must take or desist from taking certain actions in a specified time period, and an agreement to pay a fine

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33
Q

What might someone commit to receive a regulatory compliance order?

A

A regulatory compliance order may cover issues such as non-compliance with RICS rules, including failure to undertake appropriate CPD.

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34
Q

What penalties may come from attending a disciplinary panel?

A

o Issue a regulatory compliance order
o Reprimand
o Impose an unlimited amount of fine per breach but it must be proportionate to the offence
o Impose conditions upon future continued RICS registration
o Expulsion from membership or remove a firm
o Require publication if the results of the hearing in the RICS modus magazine, on the RICS website and in the local newspaper where the firm or member is based.

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35
Q

What has RICS core material been replaced with?

A

There is a new category of core material that is replacing professional statements and guidance notes. It is called a professional standard.

36
Q

What is a RICS professional standard?

A

These are set requirements or expectations for RICS members and regulated firms about how they provide services or for the outcome of their actions.

37
Q

What is RICS practice information?

A

This is information to support the practice, knowledge and performance of the RICS members and regulated firms. These publications can include, but are not limited to good practice, information, insights and processes. They do not contain advice.

37
Q

What is a RICS practice alert?

A

In august 2023 the RICS published a new web page to collect practice alerts which are key tools for warning or alerting the profession to emerging areas of risk over which the RICS has concerns

38
Q

What must terms of engagement include?

A

These must state in writing the clients agreement to the proposed fee basis, payment of expenses and that a copy of the firm’s complaints handling procedure is available upon request..

39
Q

What are three steps to follow when agreeing Terms of Engagement?

A
  1. Check professionally competent
  2. No conflicts of interest
  3. Confirm terms of engagement in writing and get written approval from the client before you start work on the instruction.
40
Q

Provide a few reasons why you might be able to decline an instruction?

A
  • Insufficient facts on the issue
  • The client won’t sign your terms of engagement
  • There is a conflict of interest
  • PI cannot be agreed
  • The advice is for a friend or on a pro bono basis and therefore your PI won’t be able to cover
  • The client is in the UK’s sanction list
41
Q

What is a conflict of interest?

A

A conflict of interest arises when a member of a firm’s independence and impartiality is threatened due to the existence of a conflict between two clients

42
Q

Name the four types of conflicts of interest?

A
  • Any financial interest
  • A personal interest
  • Commercial relationships
  • Acting on both sides of a transaction
43
Q

What is the difference between a conflict of interest and conflict management?

A

Conflict avoidance is where you do not accept the instruction
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

44
Q

What does the RICS Global professional standard: Conflicts of interest 2017 state?

A

That a member must not advise or represent a client where doing so would involve a conflict of interest or a significant risk of a conflict of interest, other than where all those who are, or may be affected have provided their informed consent.

45
Q

What professional standard relates to conflicts of interests?

A

RICS Global professional standard: Conflicts of interest 2017:

This mandatory standard came into effect on Jan 1st, 2018

46
Q

What are the three types of conflicts?

A
  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.
47
Q

What three steps must be followed when a conflict arises?

A

Step one – Conflict avoidance
Step two – Written advice to both parties
Step three - Conflict Management

48
Q

What should be followed when an information / ethical barrier is used?

A
  • The barrier must be robust enough to offer no chance of information passing between two clients
  • You must take reasonable steps to operate an effective barrier
  • The surveyors acting on different sides must be different and must be physically separated
  • There is a virtual IT barrier
  • All information regarding the instruction must be securely stored
  • A clear audit trail must be kept, including written and oral communication.
49
Q

How long should files be kept for before being destroyed and disposed of securely?

A

6 years

50
Q

Who should be notified if a claim is raised against a firm?

A

The firm’s PII insurer

50
Q

What should a surveyor do if they overhear a piece of confidential information?

A

If a surveyor overhears or finds out a confidential piece of information regarding a party who is not their client then this cannot be used for their own purposes – the client and sender should be advised of their error and should be recorded in a note to the firm’s compliance offer

51
Q

What is required from RICS firms regarding complaints handling?

A

It is a requirement firms have a published complaints handling procedure that the meets the requirements of the RICS rules of conduct, 2021.

52
Q

What are the four requirements of CPD?

A
  1. Members shall undertake a minimum of 20 hours CPD in a calendar year
  2. Open 20 hours at least 10 hours must comprise formal CPD
  3. All members must maintain a relevant and current understanding of the RICS rules of conduct during a rolling three-year period
  4. Members must record their CPD activity using the RICS CPD Management System available online on the RICS website by 31st January each year.
52
Q

What must be included within a firms complaint log?

A

Firm’s must include an RICS approved alternative dispute resolution mechanism in their CPH.

53
Q

What are the standard minimum procedures for handling a complaint?

A

Details of the complaints handling procedure should be issued whenever firm receives a complaint from a valid complainant to whom the firm owes of duty of care

The procedure must be quick clear transparent and impartially implemented

Details of the nominated person from the complaint must be stated as the person to be contacted in the 1st instant

The complaint must be made in writing

Procedures and strict timescales for the investigation complaint should be recorded

The complaint should be acknowledged within seven days and investigated within 28 days

54
Q

Define formal CPD?

A

This includes all forms of structured learning that has clear learning objectives and outcomes.

55
Q

Give an example of formal CPD?

A

Examples include structured online training, professional courses, seminars and self-managed learning that can be assessed by an expert third party

56
Q

Define informal CPD?

A

This includes any self-managed learning that is relevant or related to your professional role

57
Q

Give an example of Informal CPD?

A

This includes private study, on the job training an informal / seminars

58
Q

Define negligence?

A

Duty of care exists to clients and third parties, using a ‘reasonable care and skill’. When breached and there is a loss, a claim for damages arises.

59
Q

How can negligence claims be avoided?

A
  • Clearly understand the clients’ objectives and confirm precise instructions
  • Ensure you are competent to undertake the instruction
  • Undertake the work in accordance with the relevant RICS advise
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation and undertake and record CPD
  • Cap the PI liability excess on your PII policy in terms of engagement.
60
Q

What is the purpose of PI?

A

This it to protect clients, surveyors and third parties against negligence claims where there is a duty of care breached.

61
Q

What are the current requirements for PI levels? Based on annual turnover.

A

£100,000 or less - £250,000
£100,001 - £200,000 - £500,000
£200,001 or more - £1,000,000

62
Q

What are the maximum levels of uninsured excess required by the RICS?

A

Up to £10m – the greater of 2.5% of the sum insured or £10,000
Over £10m – No set limit

63
Q

On what basis does PI work?

A

PII policies work on a claim made basis – the PII certificate is to be sent to the RICS on annual basis.

64
Q

What are the 6 main areas of good practice as set out in the RICS professional standard: client money handling, 2019?

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments from client accounts
  5. Accounting from records and controls
  6. Compliance
65
Q

Name a few procedures that all surveyors need to be aware regarding handling money?

A
  • Client accounts must be kept separately & clearly identifiable
  • The word cline tis on the bank account and cheque book
  • A client must be able to have their monies on demand
  • Payment of interest is agreed with a client and accounts must be kept in credit
  • Regular bank reconciliation checking that payments received are transferred to the bank account
  • Accurate records are kept with a running balance available
  • Annual audit and reporting obligations by certified accountant employed by the RICS are met
66
Q

Name some of the steps you would need to comply with if you were to start a new practice?

A
  • Inform RICS of your new practice by completing a firm details form
  • Appoint a responsible principal for all RICS communications
  • Register with RICS for regulation of the firm
  • Arrange PII and send details to RICS
  • Set up procedures for the requirements for client money handling, including a protection scheme
  • Register for the RICS approval for the complaints handling procedure
  • Set up a complaints log
  • Appoint a complaints handling officer
  • Use a logo kit from the RICS for all practice material
  • Plan for succession / future running of the business if a sole practitioner
  • Ensure CPD logged online on the RICS CPD management system
  • Ensure completion of an online RICS annual return at the end of each year.
67
Q

Name some of the steps you would need to comply with if you were to close your practice?

A
  • Inform the RICS of your retirement and deregister
  • 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 PII run off cover for a minimum of 6 years
  • Retain a copy of the client’s files and records for a minimum of 6 years
68
Q

What key piece of legislation do you need to refer to when discussing Gifts & Bribery?

A

They key legislation to consider is the bribery act 2010.

69
Q

What is a bribe?

A

A bribe can be the giving, offering, promising or receiving of an advantage such as payment, gift or a service for an action which is illegal or a breach of trust.

70
Q

What six principles is the bribery act based on?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due Diligence
  5. Communication
  6. Monitoring and review
71
Q

What are the four offences relating to bribery?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official and
  4. Failing to prevent bribery
72
Q

What is the penalty for committing an offence relating to bribery?

A

If the act is breached there is a maximum penalty of 10 years imprisonment and / or an unlimited fine for individuals, companies face an unlimited fine.

73
Q

What is money laundering?

A

Money laundering is when a proceeds of criminal activities are disguised or converted and then realised as legitimate assets.

74
Q

Name a few of the key provisions in the terrorist financing and transfer of funds regulation, 2017?

A
  • A requirement to have a written money laundering and terrorist financing risk assessment
  • Implement systems, policies and controls and procedures to address money laundering and terrorist financing risks and meet the requirements under the regulations.
  • Adopt appropriate internal controls
  • Provide staff training
  • Comply with new customer, enhanced, and simplified due diligence requirements
75
Q

What policies should firms have in place to identify and scrutinise transactions?

A
  • Complex or unusually large, or
  • Contain unusual patterns of transactions, or
  • Are without apparent economic or legal purpose
76
Q

Name a few of the key requirements within the terrorist financing and transfer of funds regulation, 2017 act?

A
  • There is a limit of 10,000 euros for the acceptance of cash
  • The ongoing business relationship with client should be monitored
  • Detailed record keeping of the procedures undertaken is required
  • A senior member of staff / board member must be appointed to take responsibility for all compliance
  • A nominated person must be appointed to report any suspicions with a suspicious activity report
77
Q

List some of the typical money laundering checks for CDD based on the type of organisation?

A

Public limited company – London stock exchange listing
Public accountable body – Government ownership / control
Private limited company – certificate of incorporation, full name, registered number, registered office, business address, name of all directors and names of all shareholders.

78
Q

What would be a ‘red flag’ if you were transacting with a client?

A
  • Inability or unwillingness to provide identity documents
  • Changes to parties involved transactions
  • Unusual transaction features, such as unexpected urgency, potential loss making or an unusual transaction for a client
  • Payment of fees, purchase or rental monies in unusual currencies.
79
Q

What is the purpose of the countering bribery, corruption, money laundering and terrorist financing act 2019?

A

This sets out the mandatory, globally applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing.

80
Q

What are the three parts of the countering bribery, corruption, money laundering and terrorist financing act 2019?

A
  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.
81
Q

What does part 1 of countering bribery, corruption, money laundering and terrorist financing act 2019 state in terms of bribery and corruption?

A

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 how the firms have met the requirements of this professional statement.

82
Q

What does part 1 of countering bribery, corruption, money laundering and terrorist financing act 2019 state in terms of ML & terrorist financing?

A

Regulated firms must:
- Not facilitate or be complicit in ML & TF
- Have systems in place to with the laws
- Report suspicion
- Evaluate ad review the risks presented by 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 how the firm has met the requirements of this professional statement

83
Q

What does part 2 of countering bribery, corruption, money laundering and terrorist financing act 2019 refer to?

A

Practical guidance is provided such as:
- Have 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

84
Q

What does part 3 of countering bribery, corruption, money laundering and terrorist financing act 2019 refer to?

A

Provided on a range of issues including:
- Establishing a risks-based approach – consider the three W’s (who you act for, what you are doing and why you are being asked to do something).
- Dealing with politically exposed persons – they are higher risk as they hold positions of influence and enhanced due d 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.

RICS APC - P&D Pathway (15 decks)

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