Ethics, Rules Of Conduct & Professionlism Flashcards
1
Q
What are the 5 Global Professional and Ethical Standards?
A
There are 5…
Act with integrity
Always provide a high level of service
Act in a way that promotes trust
Treat others with respect
Take responsibility
2
Q
What does Act with Integrity mean?
A
Being honest and straight forward in everything you do.
Trustworthy
Open and transparent
Respect confidential information
Don’t take advantage other anyone who you owe a duty of care too
Dont allow bias or conflict of interest get in your way
Don’t accept gifts which may portray improper obligation.
Act in the public interest
3
Q
How can you Provide a high level of service?
A
Ensure your client receive the highest level and best possible advice/service.
Be clear on the service you are offering and their requirements
Act within the scope or your competence
Be transparent about fees etc
Communicate with client so they are able to make informed decisions
4
Q
How can you promote trust in the profession?
A
Act in a manner which promotes you, your firm and RICS in a positive way.
Professionalism in does not end at 5pm
I and the RICS are accountable for my actions.
Do what you say you’re gonna do.
Provide a good service.
5
Q
How can you treat others with respect?
A
Treat others the way you would like to be treated this goes for clients, juniors, contractors etc all the same.
Be courteous, polite and considerate.
Never discriminate
6
Q
How can you take responsibility.
A
Being accountable for your actions and if something does go wrong own it and be prepared to do something about it.
Act with skill care and diligence.
Respond to complaints in an appropriate manner to resolve the matter.
If something isnt right raise the matter with your colleagues, firm, organisation, RICS or other.
7
Q
If you were stuck regarding an ethical issue how would you resolve this?
A
I would utilise the ethics tree, failing this I would call the RICS dedicated members help line.
8
Q
How will the RICS communicate with members?
A
post fax email telephone in person.
9
Q
What are the Principles of Better Regulation?
A
Implemented by the Better Regulation Commission. Requires regulatory bodies (Such as RICS) to have regard to the Principles (PACTT).
Proportionality
Regulators should intervene only when necessary. Remedies should be appropriate to the risk posed, and costs identified and minimised.
Accountability
Regulators should be able to justify decisions and be subject to public scrutiny.
Consistency
Government rules and standards must be joined up and implemented fairly.
Transparency
Regulators should be open, and keep regulations simple and user-friendly.
Targeting
Regulation should be focused on the problem and minimise side effects.
10
Q
What are the Rules of Conduct for Members?
A
2 Parts to the rules.
Part 1 - General
Interpretation
Communication
Part 2 - Personal and Professional Behaviour Ethical behaviour Competence Service Continuing Professional Development (CPD) Solvency Information to RICS Cooperation
11
Q
What are the Rules of Conduct for Firms?
A
3 Parts to the rules.
Part 1 - General
Interpretation - Definitions within the rules.
Communication - How RICS will communicate
Part 2 - Conduct of business
Professional behaviour
Competence
Service - Carry out its professional work
Training and CPD
Complaints handling - Have CHP and Complaints log
Clients’ money - preserve the security of clients’ money
Indemnity - RICS approved PI
Part 3 - Firm Administration
Advertising - in a truthful and responsible manner.
Solvency
Arrangements to cover the incapacity or death of a sole practitioner
Use of designations (Obtain a logo pack + G note)
Information to RICS
Cooperation
12
Q
What is required to be classed as a ‘Firm’
A
- Provide a surveying service to the public
2. Must have a contact officer who is authorised to submit a Firms Annual Return.
13
Q
What must you do if a conflict of interest arises?
A
Option 1 - Refuse.
Option 2 - Manage, obtain informed consent, information barrier, compliance officer, record decisions.
14
Q
What must a member of firm do to conform to best conflict of interest practice?
A
(a) identify and manage Conflicts of Interest in
accordance with this professional statement and
(b) keep records of the decisions made in relation to
whether to accept (and where relevant, to continue)
individual professional assignments, the obtaining of
Informed Consent, and any me
15
Q
Tell me about Confidential information?
A
RICS members and regulated firms must maintain
confidentiality of Confidential Information unless
disclosure is required or permitted by law, or the RICS
member or regulated firm concerned can demonstrate that the relevant party consented to the disclosure before it was
made.
Every RICS member working independently or within
a non-regulated firm or within a regulated firm must
provide to every client all the information that is material to that client’s professional assignment of which that RlCS member has knowledge.
16
Q
What must a firm have in place to deal with conflicts of interest?
A
Every RICS regulated firm must have in place
effective systems and controls appropriate to the size and complexity of their business to enable them to ensure that the firm and its employees are able to manage their compliance with RICS Conflicts of Interest guidance note.
Conflict checks and notices are circulated around the office.
17
Q
How can you record CPD?
A
App
Website
20 hours per year (10/10) - every 3 years must do ethics training.
18
Q
CPD Requirements?
A
20 Hours total per calendar year
10 formal
10 informal
Every 3 years ethics training.
19
Q
RICS History
A
The Surveyors Club was formed in 1792.
Name change: Institution of surveyors in 1868.
20
Q
How many members global?
A
134,000
21
Q
RICS History?
A
The Surveyors Club which was formed as far back as 1792.
Turned into the Institution of surveyors in 1868.
Incorporated By Royal Charter, 26th August 1881
22
Q
What countries/continents are the RICS in?
A
Asia America Australia Europe China UK and Ireland Sub-Saharan Africa
23
Q
RICS President
A
Kathleen Fontana
24
Q
RICS CEO
A
Sean Tompkins
25
RICS motto?
Est modus in rebus
| "There is measure in all things"
26
About RICS
The Royal Institution of Chartered Surveyors (RICS) is a professional body promoting and enforcing the highest international standards in the valuation, management and development of land, real estate, construction and infrastructure.
RICS work at a cross-governmental level. delivering a single, international standard that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.
Professionals holding RICS qualifications may use the following designations after their name: AssocRICS (Associate), MRICS (Member), FRICS (Fellow). Those with the designation MRICS or FRICS are also known as chartered surveyors.
27
Who is John Clutton
John Clutton is known as the Founding Father of the RICS who was the first president and founding memeber.
28
What is the Bribery Act and its principals?
Bribery Act 2010
Determines the offences (i.e. offering, accepting, facilitating, failing to prevent, bribing a foreign official)
6 principles to prevent Bribery and Corruption:
- Proportionability (Action taken should be proportionate to organisation)
- Top level commitment
- Risk Assessment
- Due Diligence
- Communication
- Monitor and Review
29
If a conflict of interest arises what do you do?
Conflict of interest – two options. 1 avoid or 2. Manage. Inform the clients and get informed consent in writing. Information barrier.
Record decisions
30
What are the Professional Indemtity Insurance requirements?
```
What are the PI requirements for RICS firms?
Turnover
0-100k = 250k cover
100-200k = 500k cover
200k+ = 1 million cover
```
Minimum 6 year run off @£250K - Maybe longer dependant on contract length.. (i.e. as a deed/underhand etc)
Run off must account for +3 years too such as the latent damage act which allows claimants to bring a claim 3 years after a liability period.
31
What would you do if a contractor invited you to a football match during a tender period that you were both involved in?
I would politely decline as this would not be suitable during a tender as this would portray improper obligation and bias.
It may be acceptable if the invite was out of a tender period, in good faith and proportionate which wouldn't sway my impartial judgement and allow bias. I would offer to pay for my own ticket.
32
What would you do when faced with a conflict of interest?
Either refuse the instruction or manage it by creating an information barrier ensuring that your ability to provide competent advice to one client without having a negative effect on another is upheld.
33
How do you assess a new client in terms of money laundering procedures?
Customer due-diligence:
Name, ID check, address verification.
34
Explain the procedure you go through prior to agreeing to undertake a service (terms)?
Client checks - Conflict and money laundering check
Determine if the clients requirements can be met
Agree fee and scope / issue terms in writing which includes Data Protection, CHP, Fee, instructions, limitations
Desktop study
35
Why are Bribery, corruption, money laundering and terrorist financing bad?
illegal and unethical.
36
In relation to bribery and corruption RICS-regulated firms must:
(Mandatory)
* not offer or accept, directly or indirectly, anything that could constitute a bribe.
* Processes and procedures.
* have gift/hospitality registers in place.
* report any suspicious activities.
* act with due diligence and care.
* Record information and decisions.
37
In relation to bribery and corruption RICS members must:
| Mandatory
* not offer or accept, directly or indirectly, anything that could constitute a bribe
* Recorded in registers (hospitality/gift)
* ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of the RICS professional statement
* report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
38
In relation to money laundering and terrorist financing RICS-regulated firms must:
(Mandatory)
- Not facilitate or be complicit in money laundering or terrorist financing activities.
- Training.
- Report any suspicions activities.
- Due diligence and customer checks.
- Record and retain information detailing how the firm has met the requirements of this professional statement.
- Evaluate and review periodically the risks that prospective and existing business relationships.
39
In relation to money laundering and terrorist financing RICS members must:
(Mandatory)
not facilitate or be complicit in money laundering or terrorist financing activities
report any suspicions of money laundering or terrorist financing activities to the relevant authorities (as specified in local legislation); where there is no local legislation
the activity should be recorded and, if possible, reported to a senior manager.
40
In relation to bribery and corruption RICS-regulated firms should have what in place?
* Written policies, governance systems and controls covering anti-bribery and corruption including a risk assessments – this policy should be reviewed and updated periodically as appropriate.
* Gift/hospitality registers etc
* Appoint a contact officer.
* publish a staff code of behaviour and guidelines
* Due diligence
41
In relation to bribery and corruption RICS members should:
* Don't accept, give or take any bribes.
* Declare certain items to their employer, including gifts hospitality etc.
* Ensure training is up to date.
* Act in compliance with their employer’s policy.
42
In relation to money laundering and terrorist financing RICS-regulated firms should:
* Appropriate written policy.
* Appropriate governance and systems controls in place, proportionate to the type of work the firm does
* Staff training
* Keep reports of suspicious actives
* Appoint a senior person to be responsible for ensuring anti-money laundering and counter-terrorist financing policies are in place and complied with.
43
In relation to money laundering and terrorist financing RICS members should:
* Ensure training and awareness is up to date.
* Comply with their employer’s policy and process relating to money laundering and terrorist financing
* Report suspicion of money laundering and terrorist financing activity confidential
44
Money laundering red flag indicator, if a client:
* is secretive or evasive about who they are, the source of funds, the reason for the transaction etc
* avoids personal contact without good reason
* refuses to provide information about the transaction
* has criminal associations
* has unusually high level of knowledge about money laundering processes
* is a Politically Exposed Person (PEP) or subject to sanctions
45
Money laundering red flag indicator, if the parties:
- From a high-risk country (Algeria, Ecuador, Ethiopia, Indonesia, Myanmar, Pakistan, Syria, Turkey, Yemen, Iraq, Iran, and North Korea)
- They appear multiple times in transactions over a short period of time
- Executing the transaction are unusual, e.g. if they are under legal age or there is no logical explanation for their involvement are a director or representative which does not appear suitable for any reason e.g. age
46
Money laundering red flag indicator, If the source of funds for the transaction is unusual such as:
* large cash payments unexplained payments from a third party
* client doesn’t appear to have the means to pay/fund the transaction according to their legitimate income source
* loans from non-institutional lenders
* use of corporate assets to fund private expenditure of individuals use of multiple accounts or foreign accounts
47
There are a number of red flags that property professionals need to be aware of regarding money laundering. These can be classed in five main categories:
```
The client
The parties
The funds (source)
The transaction
The instructions
```
48
What is the main money laundering regulation?
Money Laundering Regulations and Terrorist Financing Regulations 2017
(amendments been made since)
49
When can informed consent be sought?
Informed Consent may be sought only where the RICS
member or regulated firm is satisfied that proceeding
despite a Conflict of Interest is:
(a) in the interests of all of those who are or may be
affected and
(b) is not prohibited by law, and that the conflict will not prevent the member or regulated firm from providing competent and diligent advice to those that may be affected.
50
Relating to conflicts of interest, every RICS member working independently or within a non-regulated firm or within a regulated firm must do what:
(a) identify and manage Conflicts of Interest in
accordance with the RICS professional statement and
(b) keep records of the decisions made in relation to
whether to accept.
51
Tell me about confidential information?
RICS members and regulated firms must maintain
confidentiality of Confidential Information unless
disclosure is required or permitted by law, or the RICS
member or regulated firm concerned can demonstrate that the relevant party consented to the disclosure before it was made.
Every RICS member working independently or within
a non-regulated firm or within a regulated firm must
provide to every client all the information that is material to that client’s professional assignment of which that RlCS member has knowledge.
52
What is a information barrier?
the physical and/or electronic separation of individuals (or groups of individuals) within the same firm that prevents confidential information passing between them.
53
Why is avoiding conflicts of interest important?
To prevent anything getting in the way of your duty to advise and represent a client objectively and independently.
Without regard to the consequences to another client, any third party, or your own interests and that the clients and in turn the public can be confident you are doing so.
54
You must not proceed with a conflict of interest if?
* reasonably be perceived to imply a lack of integrity
* cause embarrassment to your profession or
• mean that you are unable to advise and represent
each client objectively and independently
55
How can you obtain informed consent?
In writing.
Must obtain prior Informed Consent from all affected parties.
It is entirely transparent about any material factors
Ensures all parties affected understands what they are doing (including the risks involved and any alternative options available) and is doing it willingly.
56
Where a Conflict of Interest or a significant risk of one
| exists, what should you do?
you should only consider proceeding with the work
(and seek Informed Consent in order to proceed) if you are satisfied that all of the relevant clients’ (or other parties’) interests will be served by you doing the work (as opposed to another firm doing it).
You should not seek Informed Consent in order to proceed because your firm's interests are served by doing so. Obtaining Informed Consent is a process that requires proper consideration, professional judgement, and careful execution with every affected party
57
Why is it challenging to act with a conflict of interest?
Having the certainty what the effect of that Conflict of Interest, even if managed carefully, might have on your ability to advise and represent each client. This uncertainty reinforces the importance of
considering carefully whether it is prudent to decline the assignment in question rather than seeking Informed Consent to proceed.
58
The RICS anticipates that Conflicts of Interest are unlikely to arise between related firms, simply by way of business/ ownership structure, if the following criteria are all satisfied
(i) the firms are separate legal entities
(ii) there are no directors, partners or employees in
common between the firms
(iii) there is no direct or indirect fee sharing between the firms and
(iv) there is no access to information or common internal data sharing arrangements relating to the area of conflict.
59
If an ethical issue arises how may you deal with this?
Consult with the ethics tree.
60
Why is it important to handle a clients money correctly?
Ensure clients money is safe and secure.
Ensure transparency, clarity and reassurance.
RICS-regulated firms must have the appropriate controls and procedures to safeguard client money in accordance with the rules for firms.
61
How would you set up a client bank account / handle clients money?
1. Set up new bank account with the word 'Client' in.
2. Issue the client with an opening statement.
3. Confirm how the money will be drawn and when.
4. Request confirmation from the client its suitable to withdraw before every withdrawal.
5. Provide a new statement after every withdrawal.
6. Repeat until job finished.
7. Provide a closing statement and return any monies.
62
Examples of clients held money includes:
* a payment on account of costs generally
* rents and service charges
* client money held but due to be paid to contractors
63
How would you set up your own practice?
Register with RICS and Companies House.
Setup company bank account.
Register with the RICS. Required to register if 50% of principles are members. Eligible to register if 25%.
Appoint a contact officer
Have insurances in place, PI, Public, Employer, Contents
RICS approved CHP
CPD and staff training.
64
How would you close down your practice?
Inform RICS an clients, hand over clients.
6-15 year 250k PII insurance run off.
Return any client money.
Make arrangements with another firm if you are a sole trader and die.
65
What factors does the RICS Decision Tree consider?
- Sufficient facts
- Legality
- Ethical standards
- Clear reasoning
- Impact if actions made public
66
What is a conflict of interest?
Anything that impedes an individual's or firm's ability to act impartially and in the best interest of a client
67
Give some examples of where conflicts of interest may arise.
Acting for two different parties with competing interests at the same time.
Financial interests (e.g. gaining over and above your normal fee).
Personal or commercial relationship
68
What should you do if a conflict of interest arises?
Should be dealt with by implementing openness and transparency.
Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party.
All parties can then decide how they wish to proceed and if there are any objections you must stand down
69
What is a 'Chinese Wall'?
An information barrier within an organisation used in order to prevent exchanges or communication that could lead to a conflict of interest
70
Can one part of a chartered surveying practice work for a client, whilst another part of the practice is working for a different client who has conflicting interests to the first?
Yes, providing an information barrier is effectively implemented.
Teams should be physically separated in different parts of the building (or in different buildings)
Requires a compliance officer to monitor the 'barrier' - education and training must be made available to those managing the barrier.
71
You're acting on behalf of a client in a dilapidations claim and realise you know the other party personally - what should you do?
Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party.
All parties can then decide how they wish to proceed and if there are any objections you must stand down.
72
What must a bank account do/state in relation to handling clients money?
- Bank account must have "client" in the name
- Account must be separate
- State arrangement for interest
- Transparent with reconciliation
- Fast access
73
What are your company's complaints handling procedure?
Complaint made
Implement 2 stage process.
Stage 1
Sent to complaints handling person for review
Acknowledged (within 7 days of receiving)
Respond (within 28 days)
Stage 2
Third party organisation used should complainer not be satisfied
74
What is the RICS complaints handling procedure?
RICS CHP Help Sheet 2011 states CHP requires two stages:
- consideration of the complaint by a senior member of the firm or the firm’s designated complaints handler
- if the complaint cannot be resolved, referral to an independent third party with the authority to award redress.
RICS Complaints Handling 2016 provides further guidance
75
What would you do if your colleague was acting outside of the Global Professional and Ethical Standards?
- Ascertain the facts to ensure they are acting outside of the rules
- Use ethical decision tree to confirm
- Remind them of the rules
- If no change, report to RICS
76
What is your company's gift policy?
Any gift must be noted in the Register.
Maximum threshold is £100 for an individual, £250 for a group.
77
How would you carry out a money laundering check?
- Customer Due Diligence
- Simplified Due Diligence
- Enhanced Due Diligence (done by compliance team for detailed investigation required out of my scope of confidence)
78
What is tipping off?
Alerting or giving an early warning of the investigation
79
What is the maximum amount of cash allowed to be taken?
Maximum allowed is EU10,000 in cash, counted and receipted.
As a firms we don't accept cash and this would also be a money laundering red flag indicator.
80
What work can you do prior to agreeing your terms of engagement with a client?
Anything, as long as you do not provide advise to the client.
81
What would you do if you were presented with a gift from a client or contractor?
- To avoid being compromised perhaps the best solution is to refuse all, but in practice this is difficult without disrespecting the contractor/client.
- All gifts should be noted in firms gift register
- Ensure the gift is proportional in value and not given at a sensitive time e.g. final account negotiations or tender period.
- May look to donate the item to charity.
82
What is PI?
Professional Indemnity Insurance - mandatory for RICS firms.
Offers insurance against your advice to clients. If claims are brought against you the insurance will pay for any court dealing or defence and pay out any loss/claims.
Gives clients confidence that the advise they are seeking is fully insurance backed.
Protects firms.
83
If a contractor asked you to go for a coffee would you?
No I would not as this would portray bias to the contractor.
84
A new client calls you up to carry out an instruction what do you do?
Gather information about client (money laundering checks)
Gather info about details of instruction
Check conflicts of interest
Sufficient knowledge/systems to carry out instruction
Prepare an instruction letter.
85
Whats in an instruction letter?
```
Property/project info
Scope of service
Fees
Limitations
Terms and conditions
CHP (Briefly!!)
```
86
If you were unable to obtain PI what would you do?
I would enter into the Assigned Risk Pool which would allow me to obtain PI cover.
This is a facility for actively trading Regulated Firms who find themselves unable to obtain insurance in the normal market.
Firms can remain in the ARP for a maximum of 3 years during which they will be audited and guided in how to amend business procedures/practices. Membership is subject to compliance with the terms and conditions of entry.
87
How do you assess a client in relation to Money Laundering/Terrorist Financing?
Due diligence,. ID check, address verification.
88
Explain the procedure you go through to agreeing to undertake a service for a new client?
Client checks (Money Laundering/Terrorist financing)
Conflict checks (Conflicts of interest)
Agree fee and scope - issue terms in writing which includes GDPR, CHP, Fee, instructions, limitations
89
How do you carry out Money Laundering checks?
Customer due diligence:
- Name
- Photograph on an official document which confirms their identity
- Residential address and date of birth - usually utility bill.
Simplified due diligence (If it can be reasonably assumed theirs no risk)
Enhanced due diligence (Used when there is suspicion, high risk, PEP etc)
90
When is Money Laundering Checks required?
- when you establish a business relationship with a customer (or another party in a property sale)
- when you suspect money laundering or terrorist financing
- when you have doubts about a customer’s identification information that you obtained previously
- when it’s necessary for existing customers - for example if their circumstances change
- Acting as a dealer and If you are not a high value dealer, when you carry out an ‘occasional transaction’ worth €15,000 or more.
- when you carry out an ‘occasional transaction’ worth €10,000 or more.
91
How do you carry out conflict checks?
A conflict brief document circulated around office to check for conflicts.
92
When should your PI insurers be notified about regarding a complaint/claim?
Your firm needs to notify your insurers immediately about:
* an actual claim
* a written or verbal threat of a claim
* any ‘circumstance’ which your firm has reason to believe may, or is likely to, result in a claim.
* any complaint notified via your firm’s complaints handling procedure.
93
During a project you notice the workers dont speak English what are the risks of this and what would you do?
Risks:
- Unlikely to read English if cannot speak so they likely that they cannot understand Health and Safety signs
- May be illegal immigrants (extreme circumstances).
- Report them to the police for investigation (Client and Contractor may be in on it)
94
If you've set up a client bank account and there's surplus money what would you do?
Appoint an auditor to review the audit trail to determine/find where the money came from and return.
If cannot be found, keep money in a separate bank account for at least 3 years and donate to a registered charity. Obtain an indemnity from the charity for the donation in the event someone comes forward.
