RICS APC Ethics LH Flashcards
RICS Conduct and Competence covers…
Rules of Conduct
Conflicts of Interest
Bribery, Corruption, Money Laundering and Terrorist Financing
Risk, Liability and Insurance
Client Relationships and Handling Data
Client Money
The regulatory functions of RICS relating to Standards and Professional Development are led and overseen by the Standards and Regulation Board (SRB).
Summarise this Professional Statement… February_2019_Countering_Bribery_And_Corruption_Money_Laundering_And_Terrorist_Financing
The document titled “Countering Bribery and Corruption, Money Laundering and Terrorist Financing” is published by the Royal Institution of Chartered Surveyors (RICS). It provides guidance for professionals in the real estate and construction industry on how to prevent bribery, corruption, money laundering, and terrorist financing.
The document begins by defining the terms bribery, corruption, money laundering, and terrorist financing, and explains how these activities can harm the reputation of the industry and create legal and ethical risks for professionals. The document then outlines the key principles for countering these activities, which include risk assessment, due diligence, and monitoring.
The first principle is risk assessment, which involves identifying and assessing the risks of bribery, corruption, money laundering, and terrorist financing that may be associated with a particular project or transaction. The document provides guidance on how to conduct a risk assessment, including the use of risk matrices and risk registers.
The second principle is due diligence, which involves conducting background checks on individuals and companies involved in a project or transaction. The document provides guidance on how to conduct due diligence, including the use of public registers, interviews, and site visits.
The third principle is monitoring, which involves ongoing monitoring of a project or transaction to identify any changes in the risk profile. The document provides guidance on how to conduct monitoring, including the use of transaction monitoring and ongoing due diligence.
The document also provides guidance on other key aspects of countering bribery, corruption, money laundering, and terrorist financing, including the use of whistleblowing policies, the importance of leadership and culture, and the role of training and awareness.
In addition, the document provides guidance on how to comply with relevant legislation and regulations, including the UK Bribery Act 2010, the Proceeds of Crime Act 2002, and the Terrorism Act 2000. The document also provides guidance on how to work with law enforcement agencies and other relevant authorities to prevent and detect these activities.
Overall, the document provides comprehensive guidance for professionals in the real estate and construction industry on how to prevent and detect bribery, corruption, money laundering, and terrorist financing. By following the principles and guidance outlined in the document, professionals can help to protect the reputation of the industry and reduce the legal and ethical risks associated with these activities.
summarise in 250 words RICS professional statement on Client money handling Oct22.pdf
RICS has published the “Client Money Handling, 1st Edition,” a guidance note aimed at providing best practices for professionals in the property sector when handling client funds. The document underlines the importance of maintaining trust, transparency, and accountability in financial management to uphold the highest ethical standards and protect clients’ interests.
The guidance note specifies key principles and procedures that RICS members and regulated firms should follow when managing client money, which include:
- Segregation: Keep client money separate from the firm’s own funds, using designated client bank accounts to ensure client funds are not mixed with the firm’s money.
- Account designation: Clearly label client bank accounts to indicate they hold client funds and not the firm’s own money.
- Bank selection: Carefully choose a reputable bank and ensure it acknowledges that the firm holds the money on behalf of clients.
- Reconciliation: Regularly reconcile client bank accounts against internal records, identifying and resolving any discrepancies in a timely manner.
- Record-keeping: Maintain accurate, up-to-date, and comprehensive records of all client money transactions, ensuring these records are easily accessible and can be audited if necessary.
- Client communication: Keep clients informed about the handling of their funds, including providing statements or updates on the status of their money.
- Controls and monitoring: Implement robust internal controls and checks to safeguard client funds, prevent fraud, and detect any irregularities.
- Staff training and oversight: Ensure staff members who handle client money receive adequate training and supervision to maintain competence and compliance with RICS standards and applicable regulations.
- Handling interest and charges: Establish clear policies regarding the payment of interest on client money and the allocation of bank charges.
- Reporting and regulatory compliance: Adhere to RICS reporting requirements and comply with all relevant laws and regulations governing client money handling.
By following these guidelines, RICS members and regulated firms can demonstrate their commitment to professionalism, transparency, and accountability, ensuring the proper handling of client funds and maintaining trust in the property sector.
Explain how to handle potential conflicts of interest
RICS has published the “Conflicts of Interest Global, 1st Edition,” a guidance note that provides best practices for professionals in the property sector to identify, manage, and mitigate conflicts of interest. The document emphasizes that maintaining the highest ethical standards and upholding the public interest are crucial for RICS members and regulated firms.
The guidance note outlines the importance of understanding different types of conflicts of interest, including actual, potential, and perceived conflicts. RICS members are advised to be aware of these conflicts and manage them effectively to maintain trust and integrity in their professional relationships.
To prevent conflicts of interest, the document recommends adopting a proactive approach, which includes implementing appropriate policies, procedures, and systems within an organization. Key elements of an effective conflicts management framework include:
- Identification: Regularly assess and identify conflicts of interest that may arise from an organization’s activities, relationships, or services.
- Management: Implement strategies to manage, mitigate, or eliminate identified conflicts of interest.
- Disclosure: Ensure transparency by disclosing relevant conflicts of interest to affected parties in a timely and appropriate manner.
- Record-keeping: Maintain accurate and up-to-date records of identified conflicts of interest and the measures taken to address them.
- Training and awareness: Educate staff on the importance of managing conflicts of interest and provide them with the necessary tools and knowledge to identify and manage such situations effectively.
- Monitoring and review: Regularly review the effectiveness of the conflicts management framework and make improvements as necessary.
RICS members are encouraged to seek guidance from the organization’s professional standards and regulations, as well as relevant laws and industry best practices, when managing conflicts of interest. By adhering to these guidelines, RICS members can maintain the highest standards of professionalism, protect their reputation, and uphold the public interest in the property sector.
outline the RICS ethics decison tree
The RICS Ethics Decision Tree is a tool designed to help RICS members and professionals in the property sector make ethical decisions in their work. While the exact format of the decision tree may vary, the general principles offer a step-by-step approach to guide professionals through the decision-making process when faced with ethical dilemmas. Here is an outline of the key steps in the RICS Ethics Decision Tree:
- Identify the issue: Recognize the potential ethical dilemma or problem at hand. Consider the relevant facts and circumstances surrounding the situation.
- Consult RICS standards and regulations: Review the RICS professional standards, guidance notes, and any relevant regulations to understand the expected behavior and requirements for RICS members in such situations.
- Consider the law: Ensure that your decision complies with all applicable laws and regulations, including domestic and international legal requirements.
- Assess stakeholder impact: Evaluate how your decision might affect various stakeholders, such as clients, colleagues, the public, or the environment. Consider the potential consequences and the long-term implications of your actions.
- Identify potential conflicts of interest: Determine if there are any conflicts of interest that could impact your decision-making process or compromise your professional integrity.
- Reflect on your values: Consider your personal principles and values, as well as RICS’ core values of integrity, honesty, and professionalism. Think about how your decision aligns with these values.
- Seek advice: Consult with colleagues, mentors, or other professionals if you are uncertain about the best course of action. Discuss the situation and gather different perspectives to help inform your decision.
- Make a decision: Based on the information gathered and the ethical considerations, make an informed decision that upholds the highest standards of professional conduct.
- Document your decision: Keep a record of your decision-making process, including the factors you considered and the rationale behind your final decision.
- Review and learn: Reflect on your decision and its outcomes, identify any lessons learned, and use these insights to improve your future decision-making.
By following these steps, RICS members can ensure they make ethical decisions that align with professional standards, legal requirements, and the best interests of all stakeholders involved.
Why were the RICS rules updated for 2022
The new Rules replace the previous version which had been in place for members and firms since 2007. We have introduced the following changes to bring our ethical standards into one clear framework.
A simpler structure.
We have made it easier for RICS members and firms to understand our rules, providing more confidence for clients and the public.
Clear examples.
To help support members’ professional judgement, each Rule is illustrated with examples of how members and firms can behave to comply with the Rule. There are also 12 case studies showing real-life application of the Rules.
Focusing on respect, diversity and inclusion.
Whether it’s encouraging diversity and inclusion, or tackling modern slavery, respect and courtesy underpin all our professional ethics.
Understanding evolving technology.
The Rules highlight the importance of understanding the evolving use of data and technology, and the associated benefits and risks.
Tackling global challenges.
The Rules show that ethical practice by RICS members and firms has an important role when it comes to global challenges, including creating sustainable development and tackling climate change.
The new Rules of Conduct came into effect on 2 February 2022.
summarise the Guidance Note on Risk, liability, and insurance
The document titled “Risk, Liability and Insurance” provides guidance to professionals, including building surveyors, on the importance of risk management and insurance in their practice.
The key points covered in the document include:
- Risk management: The document emphasizes the importance of identifying and managing risks in order to prevent potential claims and minimize losses.
- Liability: The document highlights the various types of liability that building surveyors may face and provides guidance on how to manage and mitigate these risks.
- Insurance: The document explains the importance of having adequate insurance coverage in place to protect against potential claims and liabilities.
- Professional indemnity insurance: The document provides guidance on the importance of having professional indemnity insurance in place, the level of coverage needed, and how to manage claims effectively.
Overall, the document emphasizes the importance of risk management, liability management, and having adequate insurance coverage to protect against potential claims and liabilities for building surveyors and other professionals in the construction industry.
RICS: Minimum limit of professional indemnity insurance cover
Table 1: Minimum limit of indemnity
Firm’s turnover in the preceding year - Minimum limit of indemnity
£100,000 or less - £250,000
£100,001 to £200,000 - £500,000
£200,001 and above - £1,000,000
Risk, Liability and Insurance: Top tips
Risk, Liability and Insurance: Top tips
Liability caps - RICS recommends regulated firms use liability caps, where legally permissible and following the principles of good practice set out in the guidance note, as a way to manage the risk of their professional work, and to ensure that there is a fair allocation of risk and reward between members and their clients. Third party reliance - Regulated firms need to be aware of third-party reliance and make clear in their contracts/engagement terms that their advice may only be relied upon by the named client, so as to ensure that they are aware of and have control over future requests for third party reliance. Terms and conditions - There are at least three key terms that should be considered from a risk perspective in the context of every instruction that a surveyor undertakes: The scope of the work The basis on which the fee will be calculated The liability cap Professional Indemnity Insurance (PII) – PII is a key part of managing risk and in arranging PII, regulated firms should ensure that the amount of cover purchased is consistent with the nature of their practice, proportionate to the risks taken by the firm and consistent with the RICS PII requirements. PII – Although larger firms sometimes have designated partners or employees who manage the firm’s insurance arrangements, it is important that all partners and senior members are involved to an appropriate extent and have at least a working knowledge of the firm’s professional indemnity insurance
What is the recommending procedure for Complaints handling
According to the document titled “Complaints Handling” by RICS, the recommended procedure for dealing with complaints includes the following steps:
- Acknowledge the complaint: The complainant should receive a prompt acknowledgment of their complaint, which should provide details of how the complaint will be handled and the expected timeline for a response. (do so within 7 days) - consider contacting PII / broker
- Investigate the issue: The complaint should be thoroughly investigated to determine the facts of the matter and identify any areas for improvement. (do so within 28 days)
- Respond to the complainant: Once the investigation is complete, a written response should be provided to the complainant that addresses their concerns and provides any necessary remedies or solutions. (respond within 28 days of conclusion of investigation)
- Review and follow-up: After the response has been provided, a review should be conducted to ensure that the complaint has been effectively resolved and to identify any further steps that may be required.
(offer ADR in case client is not satisfied with outcome)
Overall, the recommended procedure emphasizes the importance of prompt acknowledgment, thorough investigation, and effective communication with the complainant throughout the process.
what are basic principles of “Client Money Handling” by RICS
The document titled “Client Money Handling” by RICS outlines the basic principles that a business should follow when handling client money. These principles include:
- Compliance with regulations: The business should comply with all relevant regulations, such as anti-money laundering regulations and data protection laws.
- Separation of client money: The business should maintain separate accounts for client money, which should be clearly identifiable and distinguishable from the business’s own funds.
- Handling of client funds: The business should handle client funds with care and should only use them for the purpose for which they were intended.
- Record-keeping: The business should maintain accurate and up-to-date records of all client money transactions, including receipts and payments.
- Independent checks: The business should conduct regular independent checks of its client money handling procedures to ensure compliance and identify any potential issues.
Overall, the basic principles for handling client money emphasize the importance of compliance with regulations, separation of client funds, careful handling of client money, accurate record-keeping, and regular independent checks.
what are conflicts of interest and how should they be managed…. January_2022_conflicts_of_interest_global_1st_edition (Professional Statement)
Conflicts of interest occur when a surveyor or firm is involved in a situation where their personal or financial interests may influence their professional judgment or actions, potentially leading to biased or unethical conduct. The document titled “Conflicts of Interest” by RICS explains that conflicts of interest can arise in various contexts, such as:
- Dual representation: When a surveyor or firm represents two or more clients with competing interests in the same transaction.
- Personal interests: When a surveyor or firm has a personal or financial interest in the outcome of a transaction, such as a potential financial gain or loss.
- Familiarity or bias: When a surveyor or firm has a pre-existing relationship or bias towards one party in a transaction.
To manage conflicts of interest, RICS recommends that surveyors and firms should:
- Identify and disclose conflicts of interest: Surveyors and firms should identify potential conflicts of interest and disclose them to relevant parties as soon as possible.
- Obtain informed consent: If a conflict of interest cannot be avoided, surveyors and firms should obtain informed consent from all parties involved in the transaction.
- Maintain independence and objectivity: Surveyors and firms should maintain independence and objectivity in their professional judgment and actions, avoiding any bias or influence from conflicting interests.
- Document and monitor: Surveyors and firms should document all conflicts of interest and the steps taken to manage them, and monitor the situation throughout the transaction.
Overall, managing conflicts of interest requires careful identification, disclosure, and management of potential conflicts, while maintaining independence, objectivity, and transparency in professional conduct.
how does RICS manage complaints? /2022_February_Investigating_And_Managing_Concerns_Version_4_With_Effect.pdf
The document titled “Investigating and Managing Concerns” by RICS outlines the process for managing complaints and concerns related to RICS members and regulated firms. The process involves the following steps:
- Initial assessment: RICS will conduct an initial assessment of the complaint or concern to determine if it falls within RICS’ regulatory remit.
- Investigation: If the complaint or concern falls within RICS’ regulatory remit, an investigation will be conducted. This investigation will typically involve gathering evidence and interviewing relevant parties.
- Determination of findings: After the investigation is complete, RICS will determine whether there has been a breach of RICS standards or regulations.
- Sanctions: If there has been a breach of RICS standards or regulations, RICS may impose sanctions on the member or firm, such as a reprimand, fine, or suspension.
- Appeals: Members and firms have the right to appeal RICS’ determination and sanctions.
Throughout the process, RICS aims to be transparent, impartial, and fair to all parties involved. RICS also has various measures in place to protect the confidentiality of complainants and witnesses. The document emphasizes the importance of effective communication and collaboration between RICS and complainants or witnesses to ensure that concerns are appropriately managed and resolved.
provide a summary of how a consultancy business can comply with the UK Bribery Act 2010
To comply with the UK Bribery Act 2010, a consultancy business can take the following steps:
- Develop and implement an anti-bribery policy that outlines the company’s position on bribery and corruption, and provides guidance to employees on how to identify and report potential violations.
- Conduct a risk assessment to identify areas of the business that are most vulnerable to bribery and corruption, and implement measures to mitigate those risks.
- Train employees on the company’s anti-bribery policy, as well as the risks associated with bribery and corruption.
- Conduct due diligence on third-party contractors, suppliers, and partners to ensure they are not involved in bribery or corruption.
- Establish a system for monitoring and reporting potential violations of the company’s anti-bribery policy, and ensure that whistleblowers are protected from retaliation.
By following these steps, a consultancy business can demonstrate its commitment to preventing bribery and corruption, and reduce the risk of legal and reputational damage.
how can a conflict of interest be identified…
A conflict of interest occurs when an individual or organization has competing interests or loyalties that may compromise their ability to act impartially or in the best interests of a client or stakeholder. The following are some ways to identify a conflict of interest:
- Personal interests: If an individual has a personal interest, such as a financial stake or family connection, in a project or transaction, it may create a conflict of interest.
- Relationships: If an individual has a relationship with a client or stakeholder that could compromise their impartiality or independence, such as a close personal or professional relationship, it may create a conflict of interest.
- Outside activities: If an individual is involved in outside activities or affiliations that may conflict with their duties to a client or stakeholder, such as serving on a board or committee that has a conflicting interest, it may create a conflict of interest.
- Professional interests: If an individual has professional interests or affiliations that may conflict with their duties to a client or stakeholder, such as being a supplier or competitor, it may create a conflict of interest.
To identify a conflict of interest, individuals and organizations should conduct a thorough review of all potential conflicts and take appropriate steps to manage or avoid them. This may include disclosing the conflict to all parties involved, recusing oneself from certain activities or decisions, or seeking independent advice or oversight.
