Rules of Conduct & Ethics Flashcards
1
Q
what are the five rules of conduct introduced February 2022 ?
A
- Members and firms must be honest, act with integrity and comply with their professional obligations to RICS.
- Maintain their** professional competence **and ensure that services are provided by competent individuals who have the necessary expertise
- Must provide good quality and diligent service.
- Must treat others with** respect and encourage diversity** and inclusion.
- Must act in the** public interest**, take responsibilities for their actions and act to prevent harm / maintain public confidence.
2
Q
Rule 1: Example of where you have been honest and acted with integrity?
A
Don’t accept bribes where it might skew your opinion on something
Approached by contractor for tickets to an event if we used them for contractual work. Didn’t accept.
3
Q
Rule 2: Example of where you have maintained professional competence?
A
Undertake CPD and ensure you are complying with requirements set by RICS
4
Q
Rule 3: Example of providing good quality service?
A
Getting back to clients in a timely manner when it comes to any management concern.
5
Q
Rule 4: Provide example of respect and encouraging diversity and inclusion
A
Some apprentices joined our team, so I welcomed them and tried to include them.
6
Q
Rule 5: Example of acting in the public interest, responsibility and public confidence
A
Respond to complaints made promptly and professionally
7
Q
What would you do if one of your colleagues acting wrongly in the rules of conduct?
A
Raise it internally to my line manager. If that was ignored, then report to RICS.
8
Q
What are the necessary steps to start your own RICS Business?
A
Inform RICS and register for regulation
Professional indemnity insurance, public liability and employers liability.
Appoint complaints handling officer
Set up appropriate procedures if handing clients money
Compliance with statute IE Equality health and safety, money laundering act etc.
RICS designation
9
Q
Why do we need Rules of Conduct?
A
Knowing Chartered Surveyors have to follow these rules, gives client and the public comfort - they know that we would face disciplinary action if we failed to meet these rules.
10
Q
CPD?
A
20 hours ( 10 formal, 10 informal)
11
Q
What is Negligence?
A
A breach of a duty of care which causes loss
A Duty of Care exists to clients and third parties, using a ‘reasonable care and skill’. When breached there is a loss and a claim for damages arises.
Limitation Act 1980 - It is a statute of limitations which provides timescales within which action may be taken (by issuing a claim form) for breaches of the law - 6 years.
12
Q
How can you avoid negligence?
A
- Clear understanding of your clients objectives
- Competent to take on the instruction
- Make detailed file notes
13
Q
Thought there could be a conflict of interest?
A
Notify all parties of potential conflict; stating when the conflict arise - this is deemed as conflict avoidance.
- Manage conflict with all written agreement between all parties
- Avoid it, suggest another surveyor take over the works.
14
Q
When would a conflict be unmanageable to manage a conflict and decline an instruction?
A
If your impartiality judgement is compromised.
15
Q
What are the changes to the RICS code of conduct
A
diverse and inclusion
sustainability
simpler structure
clear examples
16
Q
What is the purpose of Professional indemnity insurance?
A
It protects clients, surveyors and third parties against negligence claims when there is duty of claim breached and a claim for damages arises
17
Q
What is the minimum level of professional indemnity insurance and run off cover required?
A
£100,000 or less - £250,000 per claim
£100,000- £200,000 - £500,000 per claim
£200,000 - £1m per claim
18
Q
What are the Professional Obligations to the RICS ?
A
- Members must comply with CPD requirements
- Members must co-operate with RICS
- Members must promptly provide all information reasonably requested by Standards and Regulation Board, or those exercising delegated authority on its behalf
Essentially lack of CPD or failing to cooperate with RICS = could see you expelled from RICS
19
Q
How would you handle clients money?
A
- Accounting systems must be securely controlled and protected
- Client accounts must be named and have word ‘client’ in name of account
- Client money should always be available on demand and should always be in credit, but there are circumstances where management agreements may differ (Fine as long as agreed in PMA - EG for emergency funds)
- Accurate records
ACC
20
Q
In what circumstances could there be a Conflict of Interest?
A
- May occur when advising a seller and buyer simultaneously (dual agency)
- May have obligations/pressures which detract from your relationship with the client - can’t act as expert witness in court in situ where already involved (and court don’t know about it)
- Might be acting for two or more parties competing for an opportunity.
21
Q
Please provide an example for conflict of interest?
A
might have one client selling to another one of your clients EG Threadneedle selling to Blackrock and you act for both
Conflict of interest can be managed here as it would be unreasonable to bring in another agent, as managing agents
Would have to declare conflict of interest
Would need informed consent from both parties
Information barrier
Would need different offices (but same firm) to deal with management side of transaction. Restriction on information. (don’t want to be favouring one client over the other - needs to be transparent between all parties)
22
Q
How would you identify a conflict of interest?
A
Ask yourself whether your ability to act in the best interest of your client could be potentially impaired by:
Financial Interest
Personal relationship
commercial relationship
interests of your firm
(FCPI)
23
Q
What is Run off cover?
A
Run-off cover is the insurance cover that is required after a
member ceases to practise.
Must have run-off cover for at least 6 years, but 15 years recommended
24
Q
What is the minimum level of uninsured excess?
A
Up to and including £500k - The greater of 2.5% of the sum insured or £10k
Over £500,000 - 2.5% of the sum insured
25
Why do firms have Complaints Handling Procedures?
Every firm must have this in place. REMEMBER to notify PII insurance if there is a complaint as it could lead to a negligent claim.
Must maintain a complaints log .
1. In the event of a complaint, please address Complaints Handling Officer and dealt with within 28 days.
2. Alternative Dispute Resolution - in the complainant isn't happy with the resolution, then the CHP involves going to an independent third party.
26
What is the Profession and Ethical Standards Decision Tree?
Structural framework for ethical dilemmas.
Encourages considering the legality of ones action and their consistency with the RICS code of conduct
Found on RICS Website.
Do you have sufficient facts on the issue
Is it legal?
Is it in line with RICS rules of conduct
Are the appropriate people informed?
Clear reasoning in reaching your decision ?
27
What is Money Laundering ?
Where the proceeds of criminal activities are disguised, then realised as legitimate funds/assets
- criminal activity
- disguised
- realised as litigimate funds
28
What are the penalties when failing to comply with Money Laundering regulations?
Maximum 14 years prison sentence for assisting with money laundering
Maximum 5 years prison sentence for tipping off a person by informing them that they are under suspicious for money laundering or for failing to report suspicion.
29
What would you do if you suspected someone was money laundering?
report your suspicions to your anti money laundering officer to comply with anti-money laundering legislation and inform RICS.
30
What are some red flag indicators when dealing with new client?
Inability to provide identity documents
unusual transaction features such as urgency required by parties
Payment using unusual currency
31
What factors need to be addressed with accepting gifts or hospitality?
Openness and transparency is important
What is value of gift/hospitality?
Who is it being given to? One person or range of people from different organisations?
Is it reasonable and proportionate?
Does gift or hospitality have genuine business purpose?
When is it being given? Out of the blue from a contractor who has just been asked to tender for a large contract?!
How easy is it to decline there and then? Harder it is, more likely it is to be a bribe
32
What do you need to factor in when agreeing fees
Market based
Avoid price fixing between firms
Do not undercut another firm
33
what is a Bylaw?
Laws within a firm
34
What are the provision of the bribery act?
bribing
receiving
bribing a foreign official
not preventing a bribe
BRFN
35
Who is the president & CEO of RICS?
President is Justin Sullivan and Justin Young is the CEO.
36
What is a Locam?
Arrangements to cover the incapacity or death of a sole practitioner.
37
Fee Negotiations:
Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
Fees should be market-based and agreed on ad-hoc basis with clients.
Healthy competition is encouraged, but aggressive fee cutting is not allowed.
Can negotiate further after submitting initial fee proposal as long as you act professionally
May vary proposed level of service when renegotiating initial fee proposal, but should still provide high standard of service
Do not be seen to undercut another firm
Be completely transparent and state whether you are receiving/offering a referral fee - state so in terms of engagement
Bare in mind RICS Rules of Conduct and Bribery Act 2010.
38
What is the Bribery Act 2010
Aims to reduce bribery in businesses in UK and abroad:
Based on 6 principles
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review
PTRDCM
39
What are the penalties associated with Bribing
Bribery Act is policed by the Serious Fraud Office
Maximum penalty of 10 years imprisonment and unlimited fine for individual or company
40
Benefits of being RICS member
Status
Recognition -
Market advantage
Knowledge
Network
To become a member of a professional body that promotes professionalism and integrity, and is responsible for delivering trustworthy services to the public.
To make my parents proud
41
Current challenges for RICS
climate change, sustainability
42
What are some examples of CPD?
* Professional work-based activities
* Personal and informal learning
* Voluntary or charity work
* Courses, seminars and conferences
* Mentoring
43
What different types of disciplinary panels are there?
1. Action by the head of regulation = fixed penalty notice, regulatory compliance order, CPD sanctions.
2. Disciplinary Panel - more serious breach of conduct: penalties include; Issue a regulatory compliance order, fine, expulsion from RICS.
3. Appeal panel - reviews decision made by reviewing the evidence, previously presented.
ADA
44
What are the key provisions of for Countering bribery and corruption, money laundering and terrorist financing.
Sets mandatory requirements in 3 parts
Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorist financing
Guidance setting out supporting good practice for the above
Supplementary guidance on some of the concepts set out in Parts 1 and 2
45
What are the 3 main roles of the RICS?
1. Maintain the highest standards of education and training.
2. Protect consumers through strict regulation of professional standards.
3. To be the leading source of information and independent advise on land property construction and associated environmental issues.
46
What are the 3 benefits of regulation of firms?
1. Confidence
2. Professionalism
3. Security
47
Why are firms required to register for regulation?
To ensure that there is a recognised quality bench mark for all firms. Provides a ‘gold standard’ of quality control for clients.
If there are no RICS members, a firm cannot register.
Firms must annually make a return to the RICS by complying with their obligations
48
Rules of regulation?
If 50% of principles (directors, shareholders, sole practioners) of a UK firm which provides surveying services are RICS members - then it has been regulated.
if at least 25% - then it will need to apply for regulation.
49
How would you close a practice?
Inform RICS of closure/retirement
Any hand over arrangements are made with new firm
Return monies held by clients to their own accounts
Inform insurers - ensure PII run off cover for at least 6 years
Retain copy of client files and records for at least 6 years
50
What is Workman anti bribery policy ?
Cannot offer or accept anything that could constitute a bribe
51
What is the main RICS Charity?
LionHeart is an independent charity specifically designed for past, present and future RICS professionals and their families.
52
Why do we need rules of conduct?
Professional ethics are important because they act as an anchor to appropriate behaviours.
53
What is the minimum level of indemnity based of?
It is based of the firms TURNOVER
54
What is the role of the RICS?
Promotes and enforces the highest professional qualifications and standards in management of land, real estate construction and infrastructure.
55
What are the three main roles in RICS?
1. Maintain highest standards
2. Protect customers through strict regulation
3. Leading source of information and independent advice on land, property, construction
56
What should RICS regulated firms have?
1. Complaints Handling procedure
2. Professional work is covered by appropriate Professional Indemnity
3. If sole principle, have adequate measures in place if death, absence or inability to work
4. Co-operate with RICS
5. Promptly provide all information
57
What would the terms of engagement state?
1. State in writing the clients agreement to the fee basis
2. Payment of expenses
3. Copy of the complaints handling procedure
58
When would be appropriate to decline an instruction ?
If you are not competent to undertake the work
Conflict of Interest
Parties haven't agreed to the Terms of Engagement
You do not have sufficient facts on the issue
A PII liability cap cannot be agreed.
59
Conflict avoidance v Conflict management?
Avoidance - when you do not accept the instruction
Management - instruction is accepted and steps are put in place to manage the conflict - information barrier.
60
What is the mandatory RICS standard for Conflict of interests and what does it cover?
RICS Global Professional Standard on Conflict of Interest 2017
- Mandatory and came into effect 1st January 2018.
Members and firms must not advise or represent a client where doing so would involve a conflict of interest.
61
What are the main areas of good practice for RICS Professional Standard Client Money Handling 2019
1. Holding clients money
2. Providing information to clients
3. Receipts of client money
4. Payments from clients accounts
5. Accounting records and controls
6. Compliance
HPRPAC
62
Level 2 & Level 3 Examples in SOE
Level 2: Gift
1. Received gift for xmas.
2. Adhered to workman’s gift handling procedure.
3. Entered companies’ charity lottery.
4. Expressed gratitude.
Level 3: Tenant liquidation:
1. Tenant fallen into liquidation.
2. Left stock.
3. Member of team asked if we could take the wine.
4. Advised client to seek legal advice – unprofessional and inappropriate.
63
What are the four levels of membership?
FRICS
MRICS
AssocRICS
Trainee/Student
64
How can social media cause harm to professionals?
Use for social media: Guidance for RICS members, 2021
This guidance note iterates the importance of social media networks to members and firms.
RICS will investigate concerns involving media post if they involve:
- discrimination
- dishonesty
- abusive
65
RICS Professional Standards - what are they?
vs
RICS Practice information
They are 'set requirements or expectations for RICS members and regulated firms about how they provide services or the outcome of their actions'
This is information to support the practice, knowledge and performance of RICS.
66
What is informed consent?
Can only be given in writing by a party if the person explaining the COI is entirely transparent
67
Different types of conflict of interest?
Party conflict - relating to work on the same or related instruction for two parties.
Own interest conflict - relating to a personal interest
Confidential Information Conflict - relating to work between two parties whi ch is confidential.
68
If there has been conflict management in where you are acting for both the buyer and seller and there has been informed consent - what would be the necessary ethical steps here?
Information/ethical barriers:
1. Barrier must be robust so no information can get through
2. The surveyors acting on behalf of the buyer and seller must be separated in different offices.
3. All information should be securely stored
4. audit trails of the conflict check process should be in place.
69
When was RICS founded?
1868
70
How many members does the RICS have?
Over 140,000 qualified and trainee members
71
What is the Current Governance Structure?
Governed by various internal council and boards
- Governing council has over 20 members and runs the RICS - Management & Strategic direction.
- There are 17 specialist professional groups covering land, property, construction
72
What are the RICS Future foundations
Vision, Mission, Strategic Goals, Values and a World Class Organisation.
73
What is the Bichard Review?
Following the independent review of internal governance failing carried out by Allison Levitt - RICS commissioned Lord Bichard to undertake a further review and to focus on 5 key themes:
Aim is to deliver a member led public interest focussed RICS with 5 key themes of:
- Governance
- Strategy
- people
- Culture and values
- Member service
74
what is included within the the RICS Professional Standard; Anti bribery and corruption, Money Laundering and Terrorist Financing
Part 1:
Bribery and Corruption:
RICS regulated firms must:
- Not accept a bribe
- Have strict procedures in place to comply with the law.
- Report a bribe if suspected
Money Laundering and Terrorist Financing:
RICS regulated firms must:
- Not facilitate in ML or TF
- Have procedures in place to comply with the law
- Report suspicion
Part 2:
Guidance:
- Have a *written policy in place
- Publish a *code of behaviour for staff
- *Encourage transparency
- Set up a *gifts register
- *Up to date on legislation
Part 3:
Supplementary Guidance:
- Establishing a risk based approach and the three W's
Who you act for
What you are doing
Why are you being asked to do something.
75
Would you accept a gift or offer of hospitality from someone in a work capacity?
Gifts are generally accepted and a part of doing business - consider Bribery Act 2010
Is it reasonable and proportionate i.e,
is the gift proportional to the work that has done
What is the nature of the gift - could you do the same to them
when is the gift being offered / when is it being offered.
(Value, timing and proportionate)
76
What is your firms gift policy procedure?
Use our gift and hospitality e-register to declare gifts received a gift with monetary value exceeding £25 not acceptable. Hospitality acceptable if ‘normal and appropriate’.
77
What is the Levitt report
Report which reviews the power struggle at RICS prompted by questions in December 2018 over an extended multi-million pound overdraft facility and inadequate cashflow management led to one of the organisation’s most embarrassing episodes.
78
When asked about the acceptance of cash, gift or hospitality - consider the following
Bribery act 2010
RICS professional standards
Sanctions
Organisations procedures
79
Is there any act which helps combat money laundering ?
Proceeds of Crime Act 2002:
Government has the right to pursue you for monies on criminal activity
It sets out how to combat money laundering with a set of criminal offences:
Concealing
Arrangements
Acquisition
80
If you are expelled from RICS, can you apply to be reinstated?
Yes, you can apply after 12 months & you have to demonstrate the necessary improvements you have made.
81
What is a bribe?
Giving, offering, promising or receiving of an advantage such as payment, gift or a service
82
What are the Questions you would need to ask yourself in an ethical decision tree?
It legal?
Do I have sufficient facts?
Does it comply with RICS rules of conduct
have I consulted with appropriate peopel before making an informed decision
Do you have clear reasoning.
83
What is royal charter?
signed by the king or queen of that country to give an organisation particular rights.
84
ML & TF regulation 2022
Business's that are subject to ML regulation must have corporate checks (CDD, EDD)
85
When carrying out AML checks, can you let someone know if they have a poor AML
No you cant this would be deemed as tipping off and could go to prison.
86
If there is a dispute for regulation, who would deal with it?
RICS standards and regulation board
87
Who deals with regulation within a firm?
a Responsible principal
88
Disciplinary procedure - is there any RICS professional standards regarding this?
RICS regulatory decision making 2022
89
If the client outlines a complaint of the work you have done to them?
call the client to be transparent & to outline approach courses of action.
copy of the complaints handling procedure was sent to the client.
PII would need to be updated.
Inform a senior colleague
90
client money
Money of any currency which is held in a sperate bank account.
91
Who is the interim president of RICS
Nick Maclean.
92
What are the 5 principles of better regulation?
Proportionality
Accountability
Consistency
Targeting
Transparency
PACTT
93
Why does RICS have rules of conduct?
To provide a framework for members to follow and so the client knows he is getting a set of level of service.
94
What sort of information do registered firms need to send to RICS annually?
PI insurance
Complaints handling procedure detail
Whether the firm holds clients money
95
Professional indemnity insurance - what basis does it need to be underwritten?
By a approved RICS insurer.
On a claims made basis
and it is the insurance policy that is in place that is in place at the time that breach was discovered
96
What are the requirements regarding PI by the RICS
must me made on an each and every claim basis
minimum level of indemnity
Run off cover must be in place for 6 years
97
What is included within the RICS Bye Laws?
Application and definitions
Membership and registration
designations
governing council, officers and staff
98
What is the RICS moto
There is measure in all things
99
If you were bidding for piece of work and the client approached you outlining that you can have the job but you need to beat the current price of a competitor - what would you say?
I would suggest that this could constitute as a bribe and decline this offer.
100
101
Honesty / Integrity ?
Honesty refers to sincerity or truthfulness, while integrity encompasses a broader meaning, including moral soundness and adherence to strong moral principles.
102
103
