SUMMARY - FINAL Flashcards
Ethics - (Role) What is the role of the RICS?
- promote and enforce highest professional qualifications and standards
- accountable to both members and the public
- involved in policy inflience and political engagement
Ethics - (Regulate) How does the RICS set and regulate standards?
- Professional and Ethical Standards - Rules of Conduct 2021
- self-regulated - monitors compliance through Regulatory Board
- compliance - CPD requirements
- Disciplinary Procedures - Disciplinary Panel
Ethics - (Rules) What are the 5 rules of conduct?
1- members and firms must act with honesty and integrity and comply with professional obligations
2 - members and firms must maintain professional competence and ensure services are provided by competent individuals
3 - members and firms must provide good quality and dilgent services
4 - members and firms must must treat each other with respecct and encourage diversity and inclusion
5 - members and firms must act in the public interest, take responsabilitty, prevent harm and maintain public confidence
Ethics - (Rules) What are the 6 ethical principles the rules of conduct are based on?
integrity
competence
service
trust
respect
responsability
public interest
Ethics - (Trust) How do you promote trust in the profession?
Ensure I am competent and provide good quality and diligent services
Ethics - (Bribery) What anti-bribery CPD have you completed?
Internal CPD seminar by Compliance Officer
Ethics - (Bribery) What is the UK Bribery Act 2010?
Aims to reduce bribery in UK and abroad
A bribe can be giving, offering, or promising, or receiving of an advantage such as payment or gift
Ethics - (Bribery) What are the 6 principles of the UK Bribery Act 2010?
- Proportionality
- Top level committment
- Risk assessment
- Due dilligence
- Communication
- Monitoring and review
Ethics - (Bribery) What are the 4 offences?
- Bribing
- Receiving a bribe
- Bribing a forein public official
- Failing to prevent a bribe
Ethics - (Bribery) Who is responsible for corrupt act?
- company unless can demonstrate sufficient procedures in place
Ethics - (Bribery) Are hospitality events prohibited?
- UK Government states no, as long as the gift is proportionate and reasonable and accurately recorded/logged
Ethics - (Bribery) What are the penalties?
- maximum penalty of 10 years imprisonment
- unlimited fine for companies or individuals
- Policed by serious Fraud Office
Ethics - (Bribery) How do you identify a bribe?
Excessively generous gifts
cash payments
lavish entertainment, vacations
accommodations that seem to go beyond standard business hospitality.
Language used
Ethics - (Bribery) Under Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019), what must RICS regulated firms do?
- not offer or accept bribes
- have procedures in place to comply with law
- report suspicious (SAR)
- act with due dilligence (CDD, EDD)
- retain records to show compliance to this statement
Ethics - (AML) What is Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019).
Mandatory, global requirements to guide its members and firms on how to prevent and address these illegal activities
Works off regulations on Terrorist Financing and Transfer of Funds Regulaions (2017)
Part 1: Bribery and corruption
Part 2: Money Laundering and Terrorist Financing
Ethics - (AML) Under Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019), what are firms required to do?
- Not facilitate or be complicit in TF or ML
- have systems in place to comply with laws
- report suspicious (SAR) to UK National Crim Agency
- undertake CDD and EDD
- Retain records to show compliance
Ethics - (AML) What is Money Laundering?
Proceeds of criminal activities are disguised or converted and then realised as legitimate assets
Ethics - (AML) What does Terrorist Financing and Transfer of Funds Regulation (2022) mainly cover?
- estateagency work and relevant financial business work
key provisions
- written money laundering and terrorist financing risk assessment
- implement systems to mitigate risks
- adopt appropriate internal controls
- provide staff training
- comply with new customer, enahnced, and simplified due dilligence
- comply with requirements relating to PEP’s
- ensure record keeping, policies and procedures
- AML checks to confirm identity and check source of funds before contracts exchanged
- inclusion of high risk factors when assessing need for enhanced due dilligence e.g. high risk countries
Ethics - (AML) What are estate agents obligations under Terrorist Financing and Transfer of Funds (2022) regulations?
- register with HMRC if let properties more than £10,000/month
- CDD checks for sales and new lettings
- EDD for any red flags (high risk countries, PEP)
Ethics - (AML) What are the key requirements under Terrorist Financing and Transfer of Funds (2022) regulations?
- limit of £10,000 for acceptance of cash
- client relationships monitored
- compliance manager appointed
- nominated person appointed to report suspicions with a Suspicious Activity Report (SAR) to National Crime Agency
- firm must maintain records for minimum of 5 years
- report to companies house any discrepencies they hold between inhouse data
Etrhics - (AML) What is CDD?
- identify client (e.g. passport, driving licence)
- check companies house to understand company structure
- name, company number, adress of registerd office
- name of directors
- nature of busines relationship and proposed funding arrangement
Ethics - (AML) What is EDD?
- additional procedures for ‘high risk third country’ or PEP
- source of funds
- in dpeth document verification
- continuous monitoring
Ethics - (AML) What are the penalties for Money Laundering?
- 14 years prison sentence / unlimited fine for money laundering
- 5 years prison / unlimited fine for tipping off by informing them that they are under suspicioun for money laundering
Ethics - (AML) If asked about AML, what would you consider?
- Money Laundering, Terrorist Financing, Transfer of Funds (2022) Regulations
- Countering Bribery, Corruption, Money Laundering and Terrorist Financing (2019)
- DD procedures (CDD, EDD)
- Professional objectivity, openness and transparency
- Red Flags
- Sactions - see HM Treasury’s OFSI list against people, companies, countries,
Ethics - (AML) What are Red Flags relating to AML?
- not showing identity documents
- changes to parties involved
- urgency!
- unusual currency
- unusual payment terms
Ethics - (AML) - How can you find out about sanctions?
HM Treasury’s consolidated list
- can always check existing clients by subscribing to sanctions list to get notified
Ethics - (AML) - What to do if client match on sanctions list?
report to Office for Financial Sanctions Implementation (OFSI)
Ethics - (AML) -What regulations police money laundering?
Proceeds of Crime Act 2002
- allows authorities recover monies
- also sets criminal offences
Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
Ethics - (AML) Talk me through Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 ammended 2022
- CDD
- EDD for PEP’s
- SAR - reporting to UK National Crime Agency (NCA)
Ethics - (Gifts) What is your companys policy on declaring gifts? (Level 1)
Declare to compliance team:
Who the gift is from or for;
The gift’s monetary value;
Its business purpose;
If and which director/team head has approved the gift;
When the gift was given or received;
Any other additional information that may be relevan
Ethics - (Gifts) Talk me through disclosing gifts example? (Level 1)
I was invited to a hospitality event by a supplier trying to win business
as this was a conflict of interest, I informed compliance, and rejected the invitation
Ethics - (Gifts) If aasked about the acceptance of cash, hospitality, what do you consider?
- UK Bribery Act 2010
- Organisation’s Procedures
- Professional objectivity, openness, transaparency
- Proportionality
- Sanctions
- Employment contract details
Ethics - (Misrepresentation) Talk me through avoiding misrepresetaion example? (Level 2)
prior to issuing marketing collateral for an office renovation I ensured the design speciication was accurate the project manager to ensure imagery aligned with design.
Ethics - (Misrepresentation) What is the Misrepresentation Act 1967 and what is the offence?
any misrepresentation made to proposed purchaser is regarded as a civil offence, actionable by tort.
can be sued for damages
action can be limited by effective disclaimer clause
Ethics - (Misrepresentation) - What are the 3 types of misrepresentation?
Innocent
Negligent
Fraudulent
Ethics - (Competence) Talk me through referring a specialist example? (Level 3)
In salisbury, a tenant issued me a written alterations proposal to upgrade their HVAC system and electrical power supply.
I advised the client to appoint a building surveyor and structural engineer to ensure that any changes comply with building regulations and won’t negatively affect the structural integrity or functionality of the building.
Rule 2 - maintain professional competence
Ethics - (Competence) Why did you appoint a building surveyor and structural engineer?
Building surveyor - ensure functionality / compliance with buildings regs
Structural surveyor - structural integrity
Ethics - (Integrity) Talk me through lease disposal, bishop auckland example? (Level 3)
My duty was to determine the market rent for a retail unit in Bishop Auckland, after liasing with the agent, and coming to an estimation, the client was dissatisfied as the Market Rent was lower then the previous tenants rent.
Rule 1 - must be honest, act with integrity
Ethics - (Integrity) What would you do if your client continued to pressure you on the Market Rent in Bishop Auckland?
If the client insisted on increasing the rent despite my advice, I would reiterate the potential risks of doing so, such as the property being overvalued and possibly remaining vacant for longer.
I would document my advice in writing to protect both the client and myself, ensuring it was clear that I had provided professional advice based on market evidence.
I would inform my client that advising on an increase would breach the rules of conduct, so would not increase the market rent.
Client Care - How do you uphold a high standard of care to all clients?
read PMA / AMA
understand deliverables
ensure timely and accurate report
Client Care - How would you establsh KPI’s?
Can be set by the client in the terms of engagement
Set in the business plan
Set dynamically during instruction
Client Care - What is NOI and how is it calculated?
NOI=GrossOperatingIncome−OperatingExpenses
before tax, amortisation, depreciation etc
Client Care - What is you fiirms Complaints Handling Procedure?
in line with Complaints Handling (2016) Guidance Note
Step 1 (in-house)
- written complaint issued to director (nominated person)
- acklowedgement of complaint issued within 7 days
- formal response in 28 days
Step 2 (Extenal)
- take complaint to independant redress provider, approved by RICS Regulatory Board
Centre for Effective Dispute Resolution (CEDR) - business
RICS Dispute Resolution Panel (DRP) - consumers
Client Care - How do you maintain a complaints log?
- notify compliance officer of complaint who registers the complaint
Client Care - What is PII?
Professional Indemnity Insurance
Protection against negligence claims
PII is crucial as it safeguards them from potential financial losses arising from legal action or compensation claims made by clients or third parties.
Client Care - What is adequate PII?
Turnover proceeding year min. indemnity required for each and every claim
up to £100k £250k
£100-200k £500k
£200k or more £1m
Turnover proceeding year maximum uninsured excess
up to £10m 2.5% of sum insured or £10k (whicher greater)
Over £10m no limit
Client Care - How would you estimate PII if you are a new company?
Estimate turnover
Once you have turnover info, revise PII cover in-line with turnover