General Ethics questions Flashcards
How/when was the RICS founded?
Founded in 1868, granted a Royal Charter in 1881
What sets out the governance of the institution?
Regulations and bye-laws
Which body ratifies bye-laws?
The Privy Council
How many current members are there?
Over 137,500 qualified and trainees
What are the four levels of membership?
Fellow, member, associate, trainee/student
What is the RICS’ current governance structure?
- Various internal councils and boards.
- Governing council has over 20 members.
- Standards and Regulation Board and Management Board report to Governing Council.
- 17 specialist professional groups, each with elected board, responsible for outlining standards for competence and practice.
Who is the current CEO?
Justin Young
Who is the current president?
Anne Gray FRICS, from Jan 2023. Now chairs the governing council.
What was the Levitt Review?
- Alison Levitt QC’s 2021 review of the RICS’ internal governance failings.
- Commissioned Lord Bichard to undertake a further review.
What is the role of the RICS?
- To maintain the highest standards of education and training.
- To protect consumers through regulation of professional standards.
- To be the leading source of information and independent advice on land, property, construction and associated environmental issues.
What was the Bichard Review?
- Followed the Levitt review.
- To clarify the purpose of the RICS; its public-interest responsibility; make governance recommendations; provide proposals on future culture/strategy.
What were some of the recommendations of the Bichard Review?
- New Management Board & Standards and Regulation Board
- Increased focus on public interest.
- Increased focus on diversity and inclusion.
- Greater leadership on issues such as sustainability & climate change.
All recommendations were adopted.
What are the 5 key benefits of RICS membership?
- Status - professional credentials
- Recognition - promotion of professionalism to governments/markets
- Competitive market advantage
- Knowledge sharing
- Network
Information required by the RICS for registration as a firm?
- Type of business
- Responsible Principal
- Statutory regulated activities - e.g. FCA
- Nature of clients
- Complaints handling procedure details
- PII details
- Whether handling client money
What are the types of practice?
Corporate body, partnership, LLP, sole practitioner
What do the Rules for the Regulation of Firms 2022 state?
Must be regulated if >=50% of Principals are members.
Can be if >=25% are.
What is a Principal and Responsible Principal?
Principal = leadership position in firm with status to act autonomously.
Responsible Principal = obliged to ensure all reasonable steps are taken and systems in place to ensure compliance with regulatory and RICS requirements.
What are the five rules?
- Honesty and integrity, comply with professional obligations
- Competency
- Service - good quality and diligent
- Diversity and inclusion - treat with respect
- Public interest, prevent harm and maintain confidence in the profession
Give me an example of a rule that you have complied with
Rule 1 - Honesty, integrity, professional obligations.
When undertaking conflict checks prior to undertaking instructions.
Give me another example of a rule that you have complied with
Rule 2 - maintain professional competency and ensure services are provided by competent individuals with relevant expertise.
I only undertake client work where I have the relevant expertise. E.g. healthcare properties valuation request in Yorkshire.
Give me another example of a rule that you have complied with
Rule 4 - treating other with respect and encouraging diversity and inclusion.
I attend CPD on diversity and inclusion wherever possible and try to eliminate any unconscious biases.
What does Appendix A in the Rules of Conduct include?
Professional obligations for members and firms
What are the mandatory professional obligations for members?
- Comply with requirements set by the RICS and CPD (20 hours pa, 10 formal).
- Cooperate with the RICS.
- Promptly provide information reasonably requested by the Standards and Regulation Board.
What are the mandatory professional obligations of regulated firms?
- Publish a complaint-handling procedure including ADR resolution and maintain a complaints log.
- Work to be covered by adequate PII.
- Those with sole principal must have adequate arrangements for their work to continue in the event of incapacity.
- Co-operate with RICS.
- Display that they are regulated by RICS on literature.
- Report to RICS any matter that are required to under the rules of Registration of Firms.
What do the rules of conduct replace and why were they updated?
They replace 3 documents: Rules for firms, Rules for members, and Global ethical principles. In effect from Feb 2022.
They were updated to give a simpler structure, making it easier for members and firms to understand. They focus on respect, diversity and inclusion, and on tackling global challenges such as climate change.
What is the RICS decision tree?
A flow chart of questions designed to help members make ethical decisions. It is published on the RICS website.
Additionally the RICS Regulation Confidential Hotline offers further assistance to members when making ethical decisions.
Tell me about the RICS’ disciplinary procedures?
Policed by the SRB.
Investigation by the Head of Regulation who can:
- fine
- regulatory compliance order
- refer to member of Regulatory Tribunal or to a Disciplinary Panel
What is a Regulatory Compliance Order?
For low level breaches of the rules which could be easily corrected. Failure to undertake CPD may result in a fine or disciplinary action which could result in expulsion.
What actions can a disciplinary panel take?
For more serious breaches. Actions include:
1. Regulatory Compliance Notice
2. Reprimand
3. Fine
4. Unlimited fine per breach, proportionate to offence
5. Expulsion
What can an Appeal Panel do?
Consider previous and new evidence and allow appeal and vary previous penalty.
What guidance is there on the use of social media and what does it say?
Use of Social Media: Guidance for RICS members 2021.
RICS will investigate posts relating to discrimination, dishonesty, abusive or threatening behaviour, bullying, etc.
It is unlikely to investigate posts that are critical of an organisation, its policies and performance, rather than individuals.
Posts should be professional, respectful, and removed if requested.
What are the new types of core material that are replacing all current RICS core material?
Professional Standards (mandatory) and Practice Information (guidance)
- replacing international standards, codes of practice, professional statements and guidance notes.
What does competition law cover?
Price fixing or collusion with competitors.
Fee negotiations should be professional, transparent of referral fees, not undercut other firms and should not affect the level service provided unless agreed with the client and still compliant.
What should you do prior to issuing a terms of engagement?
Check competence, conflicts, written approval of terms in writing prior to commencing work.
What regulations are relevant to terms of engagement?
Section 18 of the Estate Agents Act 1979 (informing the client of fee liability) and money laundering checks - for agency work.
The Consumer Rights Act 2015 - 14 day cooling off period.
When should you decline an instruction?
- Not competent.
- Insufficient facts.
- Client won’t sign terms or complete AML check.
- Conflict of interest.
- Professional Indemnity Insurance cap can’t be agreed.
- Pro bono advice not covered by PII.
- Client on sanctions list.
What are the three types of conflict of interest?
- Party conflict - work on same instruction for two parties.
- Own interest conflict - arising from connected person.
- Confidential information conflict - work between two parties that is confidential.
What is the difference between conflict avoidance and conflict management?
Avoidance is not taking an instruction. Management is taking steps to prevent it from affecting the impartiality of advice, for example information/ethical barriers.
What is the relevant RICS guidance on conflicts?
RICS Global Professional Statement on Conflicts of Interest 2017
Must not advise a client where there is a conflict, unless it is in their best interests, does not affect a second party and informed consent has been sought, and a management procedure has been agreed and implemented.