Mandatory Competencies Flashcards
What are the two type of conflict of interest?
Professional conflicts and party conflicts
What are the two recognised financial reporting frameworks in UK company law?
International Financial Reporting Standards (IFRS)
Generally Accepted Accounting Practice (UK GAAP)
Which frameworks do publicly listed companies have to apply in the preparation of their group accounts and individual parent accounts?
Group accounts - IFRS
Individual parent accounts - Choice between IFRS and GAAP
What is Bidwells policy on gifts?
On receiving a gift, an employee should consider whether it is;
- Appropriate
- Proportionate
- Given openly and transparently
If the gift is accepted it should be recorded on the gift register if it is above the value of £50. If it is above the value of £100 if requires signed off by a line manager. Above the value of £250 should be pre-approved by the cheif operating officer.
What is the act governing gifts and hospitality/bribery?
Bribery Act 2010 (UK act)
What is considered an offence in relation to gifting, under the Bribery Act 2010?
If a person accepts a financial or other advantage intending that a function or activity should be informed improperly
What are the RICS 5 ethical standards?
Act with integrity
Always provide a high level of service
Act in a way that promotes trust in the profession
Take responsibility
Treat others with respect
What are the RICS principles of better regulation?
Proportionality
Accountability
Consistency
Targeting
Transparency
Who is the current RICS president?
Clement Lau just took over from Kath Fontana
What are the key areas of policy that the RICS presidential team are looking into?
- Responding to the recommendations of the Levitt review (Alison Levitt QC)
- Sustainability
- Technology
- Diversity and inclusion
What were the headline recommendations of the Levitt review?
- To conduct a review of purpose, governance and strategy
- To change the structure of the management board and governing council
What is the RICS’s take on sustainability?
The RICS has launched a ‘Value the Planet’ campaign which promotes the UN’s sustainable development goals and details how these can be implemented within the surveying profession.
What is the definition of sustainability?
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs
What is anti-money laundering?
Policy and legislation enforced on firms which handle client money, to monitor their clients in order to prevent money laundering
What is money laundering?
Disguising the origin or illegally sourced money by transacting it through financial systems, such as investing it in property.
Give some examples of countries on Bidwells high-risk money laundering list. Why are they high risk?
Barbados
Cayman Islands
Iran
Jamaica
Mauritius
Pakistan
Russia
Syria
Yemen
- there are high levels of organised crime
- there are inadequate measures in place against AML or terrorism
- High levels of organised crime
What does MLRO stand for?
Money Laundering Reporting Officer
What is detailed in the Bidwells anti-money laundering manual?
- The objectives
- A risk-based approach
- The nominated MLRO
- Scope of application
- Policy statement
- Roles and responsibilities
- Training
- Non-compliance
- AML procedures including sector-specific
What legislation governs AML?
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 AND 2019, and the Proceeds of Crime Act 2002
To what transactions do the AML procedures apply?
- Sale and purchase
- Letting over value of £8k per month
- Leases
- Option agreements
What is Bidwells principle in relation to roles and responsibilities for AML?
Three lines of defence:
- Fee earner
- Team Leaders and DMP’s
- MLRO and the oversight of policy
What is a PEP and why is it relevant to AML?
A Politically Exposed Person - someone who is (or has connections to) politicians, heads of state or any prominant public person.
They are considered high-risk as they are vulnerable to and targets for corruption.
What is a UBO?
Ultimate benificial owner
At what point should AML checks be carried out?
At the point of ‘an intended business relationship’ with the client. At the point of issuing a draft contract to the tenant/purchaser.
What is the AML procedure for sites with existing option or lease agreements?
AML not required until the point that the lease is exercised, unless terms are renegotiated (then AML check should take place).
What are examples of suspicious behaviour in relation to money laundering?
- Acting secretive about their ID, the source of funding or the UBO
- Uncooperative with due dilligence checks
- paying all or part in currency
- Sales at above or below market price
- loss making investment
- No obvious reason for using Bidwells
- Property is not in the profile of the consumer
What is Bidwells AML procedure?
- *New clients:**
- Agent to complete AML ID check and issue to compliance.
- Client entity
- Details of individual with authority to act (agent)
- copy of due dilligence such as passport or official company docs
- Explanation of the job/transaction involved and id any red flags
- Compliance carry out due dilligence and risk assessment
- Enhanced Due Dilligence if considered ‘high risk’
Counterparty:
- Agent issues counterparty AML request to counterparty
- Same process as above
Existing Clients:
- Constantly monitor for any suspicious activity or red flags
- Renew AML process as above every 3 years
How many years should you keep clients files for?
Maximum of 6 years
What does GDPR stand for?
General Data Protection Regulations
What legislation did the UK use to enforce the GDP regulation?
Data Protection Act 2018
What are the principles of GDPR?
That data should be used fairly, lawfully and transparently
What are personal rights under GDPR?
- Right to access any data held about you
- Be informed on how data is being used
- have incorrect data updated
- Have data erased
How can companies comply with GDPR?
- NECESSARY - limited to as little data as is actually required
- ACCURATE - Ensure data is accurate and up to date
- PURPOSE - Have a valid purpose to process data
What is the structure of the RICS?
- Privy council
- Governing Council
- Standards & Regulations Board
- Management Board
- Audit Committee
- (several other discretionary governance bodies - committees)
What is the role of the Governing Council?
The Governing Council has oversight and sets out overall strategy
What is the role of the Standards & Regulations Board?
Overseeing standard setting and upholding standards through assurance and enforcement regime
What is the role of the RICS Management Board?
Inform and oversee RICS affairs. Approve RICS business plan.
What is the role of the RICS audit committee?
Monitors the integrity and effectiveness of financial reporting, internal control and risk management systems. Appointing external auditors.
What are the current areas of focus for the RICS strategy?
- Responding to the Levitt review
- Sustainability
- Technology
- Diversity and inclusion
What is the RICS motto?
Est Modus in Rebus
(there is measure in all things)
What are the four RICS formal papers?
- Royal Charter
- Bye-laws
- Regulations
- Governance Procedures and Processes
When should you decline new work from a client?
If there is a conflict
If you can’t resource the job
Illegal
Discuss your companies complaints handling policy
Two stage process
Initially person contacts head of division
Complaint acknowledged within 24 hours
Responded to in full within 28 days
Then taken to Managing partner
Then be taken to appropriate ADR as approved by RICS
Discuss your companies complaints handling policy
Two stage process
Initially person contacts head of division
Complaint acknowledged within 24 hours
Responded to in full within 28 days
Then taken to Managing partner
Then be taken to appropriate ADR as approved by RICS
How would you limit risk of working with financially unstable client?
Due dilligence (companies house or company website)
Dun and Bradstreet credit check
Which case law introduced the requirement for run-off cover?
Merrett vs. Babb?
What are Porter’s 5 forces?
Barriers to entry
Subsitute products
Bargaining power of suppliers
Bargaining power of customers
Rivarly among existing firms
What is a PEST analysis?
Political
Economic
Social
Technological
….sometimes add legal and environmental
What do you find in a business plan?
Vision
Objectives and goals
Strategies and actions
What are contained in Bidwells Terms of Business?
Definitions and interpretations
Our services
Instructions and information
Charges
Payment
Confidentiality
Conflicts of Interest
Health and safety
GDPR
AML
Professional Indemnity Insurance
Complaints Handling
Governing Law
What are the three formal forms of dispute resolution?
Arbitration
Litigation
Adjudication
What is the difference between mediation and concilliation?
Similar, but concilliator is usually guiding the parties to come to their own agreement rather than suggesting the solution
What is arbitration?
Alternative dispute resolution
Private and parties in control of
Both parties agree arbitrator’s decision is binding
What might a company do to ensure GDPR compliance?
Audits
Raising awareness
Reviewing procedures
What are the 5 principles of better regulation?
Proportionality
Accountability
Consistency
Targeting
Transparency
What is the purpose of the five principles of better regulation?
For the RICS to regulate itself internall
What is the purpose of the RICS?
To regulate and promote the surveying profession
What measures should you have in place for handling client’s money?
- Should be in a seperate account
- Account clearly named including ‘client’
- Client have access to account
- Agree interest rates with client
- Must not go overdrawn
- Maintain client ledger
What steps would you need to take when setting up a new practice?
- Inform RICS & appoint a contact officer
- Register with RICS
- Arrange professional indemnity insurance
- Set up client account
- Complaints handling procedure
- Staff training and CPD
What is an RICS Responsible Principal?
An individual appointed by a firm to be the main point of contact for the RICS and to ensure that the firm has appropriate measures in place for employees to fully comply with RICS standards
Discuss one of the five ethical standards (integrity)?
- Being honest and straightforward in all that you do
- Respecting confidential information
- Being open and transparent, sharing necessary information
- Not offering or accepting gifts where it might suggest improper obligation
- Not allowing bias to interfere with your work
- Being transparent about any conflicts or potential for conflicts of interest
Discuss what makes a good negotiation
- Do your homework beforehand
- Take time to listen to the other party
- Show the other party how their needs will be met
- Always be willing to walk away
- Don’t be afraid to ask for what you want
What is included in the RICS Safe Surveying Guide?
- Personal and corporate H&S responsibilities
- Assessing risks and hazards
- RICS members’ places of work
- Occupational hygiene and health
- Visiting premises or sites
- Fire safety
- Management of contractors
When does a company require to become VAT registered?
When it has a taxable turnover greater than £85,000
Typically, for what period is a short-term business plan?
6-12 months
What is the status of a Professional Statement?
Mandatory for RICS regulated professionals and firms
Give examples of Professional Statements
- Conflicts of interest (how to recognise, deal with and avoid)
- Countering bribery and money laundering
How might you deal with GDPR for clients outside the UK but in the EU?
May have to consider developing a separate GDPR policy
What year was the Equality Act published and what are the various inclusivity elements known as?
Equality Act 2010 - Protected Characteristics
In the RICS Sustainability report, what is the approximate percentage of global greenhouse gas emissions cause by construction, operation and decommissioning of buildings?
40%
What are the three types of standards an RICS professional must adhere to?
Professional, ethical and technical
What are the three key types of RICS standards documents?
- Professional statement (PS)
- Guidance note (GN)
- Code of Practice (CoP)
Explain the difference between professional statements, guidance notes and codes of practice.
- Professional Statement: A list of mandatory requirements for RICS members and firms
- Guidance Note: A document that provides recommendations or an approach for good practice
- Code of Practice: a document developed in collaboration with other professional bodies which will have the status of one of the above
Give examples of professional statements, guidance notes and codes of practice.
- Professional statements: Conflicts of Interest, countering bribery and money laundering
- Guidance notes: Negotiating Options and Leases for Renewable Energy Schemes, Valuation of Rural Property
- Codes of Practice: Code of Measuring Practice,
What are protected characteristics?
Aspects of a person’s identity which are protected from discrimination under the Equality Act 2010
Discuss the key points and recommendations of the Levitt review
- Alison Levitt QC
- 467 pages long
- 13 recommendations
- Governance - recommended independent review
- Transparency - sharing minutes and reporting to Governing Council
- Financial bonuses at executive level
- Whistleblowing procedure
- External legal advice (tendering & changing providers)
- Issuing public apologies
What are the necessary minimum limits of PI insurance for an RICS registered firm?
- Up to £100k turnover - £250,000
£100k - £200k turnover - £500,000
£200,001 + turnover - £1 million
Whose responsibility is runoff cover?
The individual employee. The firm should be responsible for holding the cover, but the member is personally responsible for ensuring this is properly in place.
Discuss the Merrett vs. Babb case
Introduced requirement for run-off cover
Babb carried out negligent valuation
Original company no longer existed
Court rules Babb responsible for losses
What basis must PII be on? (i.e. aggregate etc.. )
Per claims basis
What is PII?
Professional Indemnity Insurance - cover for when a client suffers financial loss as a result of a breach of professional duty e.g. neglect or error
If a friend asks for advice, what should you do?
- Only consider doing the work if you feel it is appropriate and it is within your competency
- Ask them to contact you during work hours to arrange ToE’s
- Ensure you have appropriate PII in place and adhere to rules of conduct
What information to firms require to provide the RICS annually?
- Type of business and staffing
- Nature of clients
- Training povision
- CHP details and records
- PI insurance details
- Details on holding client money
Discuss the Merrett vs. Babb case
Introduced requirement for run-off cover
Babb carried out negligent valuation
Original company no longer existed
Court rules Babb responsible for losses
What are the 9 rules of conduct for members?
- Interpretation
- Communication
- Ethical Behaviour
- Competence
- Service
- CPD
- Solvency
- Information to RICS
- Co-operation
How many rules of conduct are there for members?
9
How many rules of conduct are there for firms?
15
What are the 15 rules of conduct for firms?
- Interpretation
- Communication
- Professional behaviour
- Competence
- Service
- CPD
- Complaints handling
- Client’s money
- PI insurance
- Advertising
- Solvency
- Arrangements to cover incapacity/death
- use of designations
- Information to RICS
- Co-operation
