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RICS SPA > Money, Bribery, Complaints > Flashcards

Money, Bribery, Complaints Flashcards

1
Q

You have a compliant come through, when should you inform your insurers?

A

Immediately

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2
Q

Levels of PI insurance

A

£100k or less turnover = £250k RICS REGULATION 2022
£100-200k turnover = £500k
Over £200k = £1m

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3
Q

Maximum levels of uninsured excess?

A

Uninsured excess up to £10m = 2.5% of insured sum or £10,000 which ever is greater

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4
Q

5 types

What sort of insurances do Chartered Surveyors have?

A
  1. PI;
  2. Employers Liability Insurance 3rd Party;
  3. Public liability;
  4. Buildings and content;
  5. Run off Cover
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5
Q

6 points

What are the requirements regarding PI by RICS?

A

Regulation 2022
1. Must be made ‘on each and every claim or aggregate
2. Gives RICS minimum wording
3. Underwritten by RICS listed insurer
4. Sets out minimum levels of indemnity;
5. maximum levels of insured excess up to 10m (£10k or 2.5%);
6. Run off cover must be in place for 6 years

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6
Q

What if the loss exceeds the cover provided by PI insurance?

A

Firm is liable for the difference

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7
Q

5 points

What measures should be taken to try and avoid PI claims?

A
  • Keep detailed records
  • Record recommendations and advice given
  • Use proper letters of engagement, scopes and terms of engagement
  • Don’t advise outside your specialism
  • Use RICS guidance, PS
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8
Q

4 points

Are you familiar wih the term liability and where would it be used?

A
  • Limit of liability to place a cap on level of exposure a business signs up to
  • In the aggregate means maximum after many different claims
  • If cover is for each and every claim - that is the level for each claim
  • Assets could be at risk without cover
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9
Q

Tell me about Merrett vs Babb case law?

A

Court case 2001. About importance of runoff cover
Babb carried out valuation as employee of a company purchased by Merrett
Valuation negligent, but company ceased to exist and court ruled compensation could be sought from Babb

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10
Q

What is the significance of Merrett vs Babb?

A
  • Highlights individual valuer vulnerable to claims, importance of runoff cover
  • Professional individuals / firms must have run off cover in place even if it ceases trading
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11
Q

How long should runoff cover be in place?

A

Minimum
6 years if executed underhand; 12 years if executed as a deed

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12
Q

6

What are the main principles of the Bribery Act?

A

Six Principles of Prevention
1. Proportionate procedures
2. Top level commitment
3. Risk Assessment
4. Due Diligence
5. Communication
6. Monitoring & Review

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13
Q

4 offences

What are the offences related to the Bribery Act?

A

1.Making a bribe
2. receiving a bribe
3. bribery of a foreign public official
4. failing to prevent bribery

Applies to all UK Entities Includes associated persons

Up to 10 yrs in prison and unlimited fines

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14
Q

three headlines remember appropriate

What are the objectives of the PS on Client Money Handling?

A
  1. Client money is kept safe
  2. Client money accounts are used for appropriate purposes only
  3. RICS regulated firms have the appropriate controls and procedures to safeguard client money
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15
Q

7 reqs

What are the 7 mandatory requirements for RICS firms for Client Money Handling?

A
  1. Holding client money - Clearly identifiable ‘client’ in account name
  2. Information to clients - Bank account details; Copy of handling money procedures; Eg Interest
  3. Receipts of client money - Paid in promptly (no later than 7 days), account for interest
  4. Payments from client accounts - Only used for client matters; controls in place
  5. Accounting controls and records - Publish written procedures
  6. Compliance - Compliance with Money Laundering Legislation
  7. Firms must ensure registered with Client Money Handling scheme
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16
Q

simple answer

What is the Client Money Protection Scheme?

A

To give public some protection by making funds available when all other avenues exhausted

17
Q

two numbers

What is the limit on each claim to the Client Money Protection Scheme?

A

£50k for each claim
Up to £10.3m for a full financial year

18
Q

minimum consumer and commercial

How long to have run-off cover?

A

For consumer Minimum of £1m for at least six years
For commercial to be appropriate and adequate at least for six years

19
Q

5 areas

What general actions does PS on Complaints handling place on firms?

A
  1. Firm’s written CHP must be approved by RICS
  2. Notify PI insurers as soon as there is a compliant
  3. Details of CHP should be issued to client with Terms
  4. Complaints log must be maintained to show details, progress and outcomes of any complaints
  5. Firms must include RICS approved ADR mechanism as part of their CHP
20
Q

days 7/28

What are the procedures for handling a complaint?

A

Stage 1 in house
* CHP issued to client
* Procedure should be quick, transparent and impartial
* Details of the nominated person (Complaints Handling Officer) be state
* Complaint must be made in writing
* Max 7 days to acknowledge and investigated within 28 days

Stage 2 ADR - third party
If not sorted, independent redress such as Centre for Dispute Resolution

21
Q

What are the six areas of good practice in the PS Client Money Handling?

A
  1. Holding client money
  2. Providing information to the clients
  3. Receipting client money
  4. Paying client money
  5. Accounting and controls
  6. Compliance
22
Q

8

What 8 procedures do you need to do to protect client money?

A
  1. Client money separate account with Client identifiable
  2. Agreed how interest is dealt with, dont allow to be overdrawn
  3. Pay into account expediently
  4. Only pay out upon written agreement with client
  5. Countersignatory for payments
  6. Account statements to client on regular basis
  7. Client can access money at all times
  8. ALL FIRMS need to display their procedudes on website and their scheme membership certificate
23
Q

What are the client money protection schemes?

A
  1. For surveying services
  2. for Residential Agents
24
Q

9 key areas

Explain 9 key provisions of the Money Laundering, Terrorist Financing and Transfer of Funds Act?

A
  1. Written ML and Terrorist Financing Risk Assessment
  2. Implement systems, policies and controls to address ML
  3. Adopt appropriate internal controls
  4. Staff training
  5. Comply with customer, enhance and due diligence reqs
  6. Comply with requirement relating to politically exposed people (PEPs)
  7. Proper record keeping, policies and procedures
  8. AML to confirm identity of purchaser and source of funds prioe to contract exchange
  9. High risk factors and seek additional information if needed
25
Q

Relates to ML

What are the levels of Due Diligence Checks?

A
  1. Customer Due Diligence (CDD) - verify eg passport; beneficial owner (eg companies house)
  2. Enhanced Due Diligence (EDD) - eg Politically Exposed People - additional evidence and monitoring - background and purpose of transaction
26
Q

What are other key requirements of ML Act 2017?

A
  1. Limit of 10,000 Euros for acceptance of cash
  2. Ongoing relationship with client should be monitored
  3. Firm maintain records for a minimum of 5 years
  4. Report to Companies House any discrepancy between their customer info and the reported Companies record
27
Q

What are typical ML requirements for CCD?

A

Public limited company - LSE listing
Public accountable - Government ownership
Private limited company - Companies House certification of incorporation
Private individual - valid passport; bank statement

28
Q

What are the 4 red flags?

A
  1. Inability to share identity documents
  2. Changes to parties involved in transactions
  3. Unusual transaction demands
  4. Payment of fees, monies etc in unusual currencies
29
Q

What are the three areas of offence under Proceeds of Crime 2002?

A
  1. Concealing criminal property
  2. Arrangements - if a person enters into one that they know or suspect related to criminal activity
  3. Acquistion use and possession of criminal property
30
Q

8 steps

What would you consider if you are offered cash, gift or hospitality?

A
  1. Bribery Act 2010
  2. RICS Professional Standard on ML TF
  3. Own organisation’s procedures
  4. Professional objectivity, openess and transparency
  5. Proportionality and Timing
  6. Tax implications
  7. Sanctions
  8. Employment contract
31
Q

5 levels

What can you tell me about AML considerations? Think hierarchy

A
  1. REGULATION FIRST - Money Laundering. Terrorist Financing and Transfer of Funds (MLTFTF) Act 2017
  2. RICS Professional Statement
  3. Government guidance for estate agents
  4. Due Diligence Checks
  5. Red Flags

RICS SPA (13 decks)

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