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Mick's APC > Subs: Ethics, Rules of Conduct and Professionalism > Flashcards

Subs: Ethics, Rules of Conduct and Professionalism Flashcards

1
Q

What is the role of the RICS?

A
  1. To maintain the highest standards of education and training
  2. To protect consumers through strict regulation of professional standards
  3. To be the leading source of information and independent advice on land, property, construction and associated environmental issues’ (RICS 2015)
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2
Q

RICS Rules of conduct - What are the 5 professional standards?

A
  1. Honest & Integrity - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
  2. Competencies - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
  3. Quality - Members and firms must provide good-quality and diligent service.
  4. Respect - Members and firms must treat others with respect and encourage diversity and inclusion.
  5. Public Interest - Members and firms must act in the public interest, take responsibility for their
    actions and act to prevent harm and maintain public confidence in the profession.
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3
Q

What does the Bribery Act aim to accomplish?

A

It aims to reduce bribery in business in UK and abroad

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4
Q

What are the six key principles which the Bribery Act is based on?

A

Proportionality
Top level commitment
Risk·assessment
Due diligence
Communication
Monitoring and review

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5
Q

What are the four offences relating to bribery?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official; and
  4. Failing to prevent bribery
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6
Q

What steps can companies take to prove they have taken the steps to prevent bribery?

A
  • identification of potential risks,
  • staff training,
  • provision of clear policies
  • regular reviews
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7
Q

Who polices the Bribery Act?

A

Serious Fraud Office

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8
Q

What is the maximum penalty for breaching the Bribery Act?

A

If this Act is breached, there is a maximum penalty of 10 years imprisonment and /or an unlimited fine for individuals; companies face an unlimited fine.

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9
Q

What constitutes a bribe?

A

A bribe can be the giving, offering, promising or receiving of an advantage such as a payment, gift or service for an action which is illegal or a breach of trust

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10
Q

What is money laundering?

A

Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate assets.

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11
Q

The key provisions of the ‘Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Pay Regulations, 2017 (as amended in 2019)’ are?

A
  1. A requirement to have a written money laundering and terrorist financing risk assessment
  2. Implement systems, policies and controls and procedures to address money laundering and terrorist financing risks and meet the requirements under the regulations
  3. Adopt appropriate internal controls
  4. Provide staff training
  5. Comply with new customer, enhanced, and simplified due diligence requirements
  6. Comply with the requirements relating to politically exposed persons (PEPs)
  7. Ensure appropriate record keeping, policies and procedures
  8. AML checks must be undertaken to confirm the identity of the proposed purchaser of a property and check the purchaser’s source of funds by the vendor’s agent before contracts are exchanged.
  9. To include additional high-risk factors when assessing the need for enhanced due diligence, and seek additional Information and monitoring in certain cases, e.g. where there are transactions between parties based in high-risk third countries
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12
Q

What is required for money laundering checks on a PLC?

A

London Stock Exchange listing

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13
Q

What is required for money laundering checks on a publicly accountable body?

A

Government ownership / control

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14
Q

What is required for money laundering checks on a private limited company?

A
  • Certificate of Incorporation
  • Full name
  • registered number
  • registered office
  • business address
  • names of all directors
  • names of all shareholders with 25% or more holding.
  • Identification of a higher risk client
  • N.B. Report any discrepancies to Companies House
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15
Q

What is required for money laundering checks on a private individual?

A

Copy of valid passport or driving licence with photo
Copy of a bank statement, credit card bill, council tax statement or utility bill to show evidence of address, not more than 3 months old

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16
Q

What are the benefits of being an RICS member?

A
  1. Status- Your professional credentials provide unrivalled client confidence.
  2. Recognition- Promotion of your professional excellence to governments and markets.
  3. Market advantage - RICS status and standards gives you a competitive advantage.
  4. Knowledge - International practice standards, professional guidance, CPD & knowledge sharing.
  5. Network- Access to 134,000 professionals worldwide.
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17
Q

What are the three benefits of regulation for firms?

A
  1. Confidence - for clients as regulated firms are monitored by RICS regulation.
  2. Professionalism - firms will have to provide clear, impartial and expert advice.
  3. Security - firms have to have a recognised complaints procedure, access to free independent redress and PII cover.
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18
Q

What are the two key pieces of legislation with regard to gifts, bribery and corruption?

A

Bribery Act 2010
Proceeds of Crime Act 2002

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19
Q

Can you share a specific example of how you ensure your professional competence before taking on a new instruction?

A

Hackney Site Inspection
Identified a tall, hollow, bamboo-like growth North of site.
Advised to my director that this resembled JK but should commission an expert to identify and confirm suspicions.
Suspicions confirmed
Presented findings to my client alongside a remediation strategy.

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20
Q

What would be your process when offered an incentive / gift?

A

“Bribery Act
Proportionality
Gifts register”

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21
Q

Provide an example of when you have acted with integrity.

A

Advising unrepresented clients to seek advices from a RICS accredited member.

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22
Q

RICS Global Professional Statement on Conflicts of Interest, 2017 states that…

A
  • A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest, other than where those who are, or may be affected have provided their informed consent.
  • Informed consent may only be sought where the RICS member or regulated firm is satisfied that proceeding despite a conflict of interest is in the interests of all of those who are or may be affected is not prohibited by law.
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23
Q

What RICS Compliance must be done for starting a new practice?

A
  • Inform RICS of new firm via Firm Detail Form
  • Appoint a responsible Principal.
  • Register for regulation
  • Arrange PII and details to RICS
  • Set up Client Money Handling procedures
  • Register for VRS if doing Vals
  • Set up CHP + Log + Officer
  • Logo kit from the RICS for all practice material
  • CPD logged online and staff training plan
  • Ensure compliance on RICS annual return.
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24
Q

What are some of the Statutory Compliance for starting a new practice?

A
  • Disclose business name
  • Disability discrimination compliance
  • Financial services compliance
  • Bribery Act compliance
  • AML officer
  • H&S compliance
  • Fire Safety compliance
  • Asbestos compliance
  • Register for Data Protection
  • Estate Agency compliance
  • Inform HMRC for VAT and Tax registration
  • Ensure compliance with current employment law.
  • Ensure insurance compliance for employer and public liability.
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25
Q

What must be done to close a business down?

A
  • Inform RICS of your retirement
  • Inform clients at the earliest possible opportunity and handover arrangements to the new firm.
  • Return any monies held by clients to their own accounts.
  • Inform insurance and procure professional indemnity insurance run off cover for a minimum of 6 years and £250k cover.
  • Retain a copy of the client files and records for a minimum of 6 years.
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26
Q

Who is the current CEO of the RICS?

A

Justin Young

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27
Q

What information is required by the RICS for registration and in the annual return?

A
  1. Type of business and staffing details
  2. Statutory regulated activities - such as for financial services
  3. Nature of clients
  4. Complaints handling procedure and records
  5. Professional indemnity insurance certificate
  6. Whether the firm hold clients’ money
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28
Q

How many members are on the Governing Council of the RICS?

A

25

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29
Q

How many specialist professional groups are there and what three areas do they cover?

A

There are 17 groups covering property, land and construction.

30
Q

What is Levitt Review?

A

The Levitt Review was an independent review which took place in 2021 exposing the lack of clarity, structure and purpose of RICS governance arrangements.

31
Q

What is the Bichard Review?

A

The Bichard Review followed the Levitt Review in June 2022 making seven key recommendations:

  • P - Increased focus on the public remit interest of the RICS.
  • E - Renewed focus on engaging with members, especially younger members.
  • R - Independent review every 5 years.
  • S - Maintaining self-regulation through independent regulation.
  • S - Simplified govenance structure.
  • S - Greater leadership on issues that matter most to society, such as sustainability.
  • D - Increased focus on diversity.
32
Q

What are the RICS ‘Rules for the regulation of firms’?

A

If 50% of a UK firm are RICS members then it has to be regulated, and if at least 25% then the firm can apply to be regulated.

33
Q

What are the six areas of information required in an annual return for RICS registration for firms?

A
  1. Types of business and staffing details
  2. Statutory regulated activities - such as financial services
  3. Nature of clients
  4. Complaints handling procedure details and records
  5. Professional indemnity insurance details
  6. Whether the firms holds clients’ money
34
Q

RICS members must…

A
  1. Comply with CPD requirements set by RICS
  2. Cooperate with RICS
  3. Promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf.
35
Q

What are RICS-regulated firms obligations to RICS?

A
  1. Publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
  2. Ensure all works is covered by professional indemnity cover.
  3. If a sole principal, make appropriate arrangements for the continuation of work in the event of their incapacity, death, absence from work etc.
  4. Cooperate with RICS.
  5. Promptly provide all information reasonably requested by the Standards and Regulation Board or those exercising delegated authority on its behalf.
  6. Display on business literature that they are regulated by the RICS.
  7. Report matters to the RICS which they are required to report under the Rules for the Registration of Firms.
36
Q

Why would a firm or member receive a disciplinary procedure?

A

If they fail to…
1. Protect the public
2. Uphold the public confidence in the profession
3. Uphold professional standards

37
Q

What is a Regulatory Compliance Order?

A

It is a written document which states the terms upon which the member or firm must take to desist from taking certain actions in a specified time period, and an agreement to pay a fine.

38
Q

When negotiating fees, firms should avoid:

A
  • Price fixing
  • Aggressive fee cutting (healthy competition is encouraged)
  • Collusion with competitors
39
Q

What legislation and rules should referral fees be considered alongside?

A
  • Bribery Act 2010
  • RICS Rules of Conduct
40
Q

How many days cooling off period does the Consumer Rights Act 2015 allow?

A

14 days from the date of agreement.

41
Q

When might it be appropriate to decline an instruction?

A
  • You are competent to undertake the work - it is outside your limitations
  • You do not have sufficient facts on the issue
  • The proposed client will not sign your terms of engagement and/or complete AML checks
  • There is a conflict of interest or personal interest
  • A Professional Indemnity Insurance liability cap cannot be agreed
  • The advice is for a friend or on a pro bono basis (for example free of charge for a charity) and your professional indemnity insurance will not cover work carried out on a personal basis
  • The potential client is included in the UK Government’s sanctions list
  • Would you be content for your actions to be made public - in the newspapers or internet?
42
Q

What is a conflict of interest?

A

When a member or firm’s independence and impartiality is threatened due to the existence of a conflict between two clients.

43
Q

What does RICS Global Professional Statement on Conflicts of Interest, 2017 states ?

A
  • A member must not advise or represent a client where doing so would involve a conflict of interest or significant risk of a conflict of interest, other than where those who are, or may be affected have provided their informed consent.
  • Informed consent may only be sought where the RICS member or regulated firm is satisfied that proceeding despite a conflict of interest is in the interests of all of those who are or may be affected is not prohibited by law.
44
Q

What are the three types of conflicts of interest?

A
  1. A ‘Party Conflict’ relating to work on the same or related instruction for two different parties.
  2. An ‘Own Interest Conflict’ relating to a personal interest.
  3. A ‘Confidential Information Conflict’ relating to work between two parties that is confidential.
45
Q

What is step one of handling a COI?

A

Conflict avoidance

Upon receipt of the full facts, consider whether the conflict is irresolvable becasue your impartiality is compromised and should be avoided or whether it can be properly managed maintaining transparency and openness.

Decide whether you want to accept or decline the instruction from Client A and Client B.

46
Q

What is step two of handling a COI?

A

Written advice to both parties

Write to Client A and Client B covering the following three points:

  • Disclose the nature of the conflict and set out your proposals for how the firm intends to deal with client.
  • Be as clear as you can and ensure both parties can make their own decision.
  • Request written confirmation of both clients informed consent.
47
Q

What is step three of handling a COI?

A

Conflict Management

Once you have received written consent from Client A and Client B, set up an information barrier in accordance with the provisions agreed with both clients.

48
Q

What is personal interest conflict?

A

This arises when acting for a family member, a close business associate or someone with whom you have a financial or personal interest or benefit (known as a ‘connected person’).

Full transparency is required. Any declaration will be required prior to instruction.

49
Q

What are the four requirements for Continued Professional Development (CPD)?

A
  1. Members shall undertake a minimum of 20 hours CPD per annum.
  2. Of the 20 hours, at least 10 hours must comprise Formal CPD. The remainder can comprise Informal CPD.
  3. All members must maintain a relevant and current understanding of RICS Rules of Conduct during a rolling 3-year period.
  4. All members must record their CPD activity using the RICS CPD Management System available on the RICS website.
50
Q

What is formal CPD?

A
  • This includes all forms of structured learning that has clear learning objectives and outcomes.
  • Examples include structured online training, courses, seminars and self-managed learning that can be assessed by an expert third party.
51
Q

What is informal CPD?

A
  • This includes any self-managed learning that is relevant or related to your professional role.
  • The RICS provides clear advice on the definition of both forms of CPD on their website.
52
Q

What is the purpose of PII?

A

To protect clients, surveyors and third parties against negligence claims.

53
Q

What is your company’s PII cap?

A
  • £2,000,000 - Liability cap
  • £5,000,000 - Total insurance cover
54
Q

What is negligence?

A

a breach of duty of care.

55
Q

What can be done to ensure negligence claims may be avoided or reduced ?

A
  • Clearly understand the client’s objectives and confirm precise instructions in writing in the terms of engagement
  • Ensure you are competent to undertake the instruction
    Undertake the work in accordance with the relevant RICS Standards and Guidance Notes
  • Make detailed file notes and take photographs
  • Keep up to date with market knowledge and legislation and undertake and record your CPD
  • Cap the professional liability excess on your PII policy in the Terms of Engagement
56
Q

There are six main areas of good practice as set out in the RICS Professional Statement ‘Client Money Handling’, 1st edition 2019 (which came into effect in January 2020):

A
  1. Holding client money
  2. Providing information to clients
  3. Receipts of client money
  4. Payments from client accounts
  5. Accounting records and controls
  6. Compliance
57
Q

What are the different forms of clients’ money?

A
  • holding deposits
  • rent
  • service charges;
  • and retentions.
58
Q

What are the two key pieces of legislation with regard to gifts, bribery and corruption?

A
  • Bribery Act 2010
  • Proceeds of Crime Act 2002
59
Q

What steps can companies take to prove they have taken the steps to prevent bribery?

A
  • identification of potential risks,
  • staff training,
  • provision of clear policies
  • regular reviews
60
Q

What is the maximum penalty for breaching the Bribery Act?

A

If this Act is breached, there is a maximum penalty of 10 years imprisonment and /or an unlimited fine for individuals; companies face an unlimited fine.

61
Q

What is money laundering?

A

Money laundering is when proceeds of criminal activities are disguised or converted and then realised as legitimate assets.

62
Q

What is the statutory regulation on money laundering known as?

A

Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Pay Regulations, 2017 (as amended in 2019)

63
Q

AML check must be completed on any transaction equal to or above what?

A

£100,000 per annum

64
Q

AML checks must be completed on four different parties in a transaction. What are they?

A
  • vendors
  • purchasers
  • landlords
  • tenants
65
Q

Firms must have policies to identify and scrutinize transactions which are what?

A
  • Complex or unusually large, or
  • contain unusual patterns of transactions, or
  • are without apparent economic or legal purpose
66
Q

What is the limit for accepting cash for a transaction?

A

There is a limit of 10,000 Euros for the acceptance of cash

67
Q

What are the penalties for failing to comply with AML regulations?

A
  • Maximum 14 years prison sentence and/or unlimited fine for assisting
  • Maximum 5 years prison sentence and/or unlimited fine for tipping off a person by informing them that they are under suspicion for money laundering or for failing to report suspicion
68
Q

What does the Proceeds of Crime Act 2002 aim to accomplish?

A

Provides powers for enforcement authorities in the UK to recover in criminal and civil proceedings money and other assets which are deemed to be the proceeds of crime.

69
Q

What is the purpose of The RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing, 2019 sets out…

A

States the mandatory, applicable requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing

70
Q

What are the three sections of The RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing, 2019?

A
  1. Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorist financing
  2. Guidance setting out supporting good practice for the above
  3. Supplementary guidance

Mick's APC (17 decks)

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