Ethics - SOE Flashcards
What are the RICS Rules of Conduct?
1) Honesty, integrity and professional obligations
2) Maintaining and acting within competence
3) Providing good quality service
4) Respect and encouraging diversity and inclusion
5) Public interest, responsibility and public confidence
What are the aims of the updated RICS Rules of Conduct?
Simpler structure
Provide clear examples
Focus on respect, diversity and inclusion
Respond to evolving technology
Tackling global challenges
What is Rule 1? Any examples?
Members and firms must be honest, act with integrity and comply with their professional obligations to RICS
Example
- Don’t take advantage of others
- Act to prevent others being misled about their professional opinion
What is Rule 2? Any examples?
Members and firms must maintain their professional competence and ensure services are provided by competent individuals who have necessary expertise
Example
- Members only undertake work that they have the skills, knowledge and resources to carry out competently
- Undertaking sufficient CPD yearly
What is Rule 3? Any examples?
Members must provide good quality and diligent service
Example
- Members must understand clients needs and objectives before accepting professional work
- Must communicate with clients in a way they can understand
What is Rule 4? Any examples?
a
Members and firms must treat others with respect and encourage diversity and inclusion
Example
- Must respect rights of others with courtesy
- Do not bully, victimize or harass
- Work cooperatively with others
What is Rule 5? Any examples?
Members and firms must act in public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession
Example
- Respond to complaints promptly, openly and professionally
- Do not dissuade complaints from approaching an ADR, RICS or other regulatory board
What is RICS Conflicts of Interest?
Provides clear rules for RICS members and regulated firms to identify and manage potential conflicts of interest (effective 01/01/2018)
Informed consent must only be sought when all parties agree that proceeding is in the interest of all parties
What is the purpose of Professional Indemnity Insurance (PII)?
a
Protects firms against claims for loss or damage made by clients/third parties as a result of impact of negligent services/advice that has been provided
What are the three Conflicts of Interest?
Party - Relating to work on same or related instruction for two different parties
Own - Personal conflict
Confidential information conflict - relating to work between 2 parties which is confidential
What is a party conflict?
Conflict related to work on same or related instruction for two different parties (e.g. acting on behalf of seller and buyer)
What is a confidential information conflict?
A conflict between the duty of an RICS member to provide material information to one client, and the duty of that RICS member to another client to keep the same information confidential
What is an own interest conflict?
A situation in which the duty to act in the interests of a Client in a professional assignment conflicts with the interests of that same RICS member / firm
e.g. client instruct you to review a property they want to purchase but you are also looking to buy it
What is the RICS guidance on Conflicts of Interest?
RICS professional standard: Conflicts of Interest, 2017
- Effective 01/01/2018
- Changed from professional statement in July 2024
What are the 4 offences under the Bribery Act?
Bribing another person
Being bribed
Bribing a foreign public official
Failure of commercial organizations to prevent bribery
What PII cover is required?
Up to £100k turnover - £250k minimum
£100k-£200k turnover - £500k minimum
£200k + turnover - £1,000,000 minimum
What is a bribe?
The offer, promise, receiving, requesting or accepting of an advantage as a reward for an action that is illegal, unethical or a breach of trust
What are the principles under the bribery act?
1) Proportionality - Consider value of each persons human rights
2) Top Level Commitment
3) Risk Assessment
4) Due Diligence
5) Communication
6) Monitoring & Review
What is law under the money laundering regulations 2019?
Sets out obligations of private sector firms and aims to stop criminals using professional services to launder money
What were the updates made under the 2019 money laundering regulations?
Came into effect on 10/01/2020
- Align UK regulation with international standards through the financial action task force
- Strengthened controls over staff training on AML procedures
- Increased powers for financial conduct authority to enforce compliance and impose penalties
What did you learn in the RICS professionalism module?
- Importance of ethics within the profession
- The different RICS rules of conduct and importance of remaining integral as a member and on a firm wide basis
- Remaining open throughout the profession
What insurances are required when setting up a RICS regulated business?
-PII
-Public liability insurance
-Building insurance
-Employer liability cover
-Directors and officers cover
-Contents insurance
-Business interruption insurance
How do you set up your own RICS regulated business? What do you need?
-Notify RICS / register using the form
-Ensure you qualify for registration
-Correct insurances
-Client money handling procedures
-Complaints handling procedure
-Locum agreement
-Conflicts of interest procedure
-Ensure statutory compliance
-Need to state on literature regulated by RICS
Which rule of conduct relates to integrity?
Rule 1
What are the considerations within the RICS ethics decision tree?
Legality of action under law
Does it comply with RICS rules and professional standards
Is it consistent with public interest
Is it consistent with Rules of Conduct
What are the consequences of your actions
Seek guidance if unsure
Which ethical principles are the RICS rules of conduct based upon?
-Honesty
-Integrity
-Competence
-Service
-Respect
-Responsibility
What are the penalties of money laundering?
-Large unlimited fine
-Up to 5 years in Jail for tipping off
-Up to 14 years in Jail for assisting
What are the penalties of being involved in bribery?
-Policed by Serious Fraud Police
-Maximum penalty of 10 years imprisonment
-Unlimited fine
What is your firms policy regarding bribery and corruption?
-Undertake customer due diligence
-Bound by laws of Bribery Act 2010
-Take zero tolerance approach to Bribery/corruption
-Committed to acting professionally, fairly and with integrity
How do I ensure compliance with my firms policy regarding bribery and corruption?
- Understand laws relating to Bribery Act 2010
- Regularly read and understand the policy outlines prohibited behaviours and consequences of non-compliance
- Conduct due diligence on third parties (suppliers/agents/contractors)
- Keep records of business dealings that may be scrutinized under the laws/firm policy
- Undertake regular training
- Report any suspicious activity to partner
ONLY ACCEPT GIFTS WHEN RECEIVED OPENLY AND TRANSPARENTLY LOGGING ON GIFT REGISTER - NEVER ACCEPT CASH OR EQUIVALENT
What is the latest RICS guidance regarding client money handling?
RICS Professional standard, Client Money Handling, 1st Edition, October 2019
What rule does the 2024 Christmas Gift relate to?
Rule 1
What is a general complaints handling procedure?
The right for an individual/firm to complain about the services a company may offer, and the strategy that a firm employ to deal with these complaints
What does your firms specific conflict of interest check consist of?
All new instructions require a conflict of interest check before accepting
Anyone who encounters conflict must declare to partner in charge and advisory board
- Immediate disclose to all parties
- Withdraw from situation until resolved /considered
- Monitor conflict and update database
Who is the current RICS president and CEO?
CEO: Justin Young
President: Tina Paillet
What are the 3 main roles of RICS?
- To maintain the highest standards of education and training
- To protect consumers through the strict regulation of professional standards
- To be the leading source of information and advice on land and property
When was RICS founded?
1868
What are the benefits of being a member of RICS?
- Status
- Recognition
- Market advantage
- Knowledge
- Networking
What is the benefit of being a RICS regulated firm?
Confidence - from clients
Professionalism
Security
What is Conflict avoidance v Conflict management
Conflict avoidance
- Turning down an instruction due to a conflict
Conflict management
- Instruction accepted and steps taken to manage conflict e.g. through an information barrier
What happens if you receive confidential information in error?
- Notify sender immediately
- Delete the information
- Document the incident
- Do not use the information
- Report to partner
- Discuss the matter in confidence
- Comply with GDPR regulation
How can negligence be avoided?
By having PII cover
How would you close a RICS regulated business?
- Agree closure date
- Inform RICS of closure
- Inform Client and handover arrangements are made with a new firm
- Return client monies to their own accounts
- Notify PII insurers and arrange run-off cover for at least 6 years
- Retain copies of client files and records for at least 6 years
What do firms need to be sent to RICS annually?
RICS Annual return (provides info on firms structure/activities/compliance with RICS regulations)
How would a money laundering check be undertaken? What is required?
Anti money laundering check (AML)
- Verifying personal/business details
- Checking customer against sanction list
- Determine the source of funds/wealth
How can money laundering be suspected?
- Party has criminal associations
- Secretive about funds
- Party resides in a high risk country
- If transaction loss making
- Company uses multiple accounts
- No obvious commercial purpose to transactions
- Avoiding personal contact
When are AML checks carried out?
- For new clients and existing (ongoing monitoring)
- For new tenants + assignments
- When money laundering is suspected
- When regulations change
- Before conducting a transaction
Are you aware of any RICS mandatory regulations relating to bribery/corruption/money laundering?
RICS Professional Standard (Bribery, Corruption, Money Laundering and Terrorist Financing) 1st ed Feb 2019 - Effective September 2019 (Proff standard in July 2023)
- Outlines requirements to comply with local laws
- Must report suspicious activity
- Must not accept/offer bribes
When would RICS get involved in a complaint?
- Member fails to respond or prevents party gaining access to redress mechanism
- If RICS receive several complaints from a member/firm
What is your firms specific policy on conflicts of interest?
- Don’t accept instruction where known conflict of interest exists unless approval has been given
- Property by property basis
- Have a conflict of interest check procedure
- If COI arises - immediate disclosure, withdraw till resolved, monitor conflict + updated database
What is Workman’s purchasing policy?
- Only use workman’s approved contractors
- Min 3 quotes for works above £5k, 2 between £1.5k and £5k
