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APC Mandatory Competencies > Ethics, Rules of Conduct and Professionalism > Flashcards

Ethics, Rules of Conduct and Professionalism Flashcards

1
Q

What is the role of the RICS ?

A

Three main roles:

  1. Maintain high standards of education
  2. To protect consumers through strict regulation of professional standards
  3. To be the leading source of information
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2
Q

Why do you want to be a chartered surveyor?

A

Due the numerous benefits it offers as a practicing surveyor.

STATUS- Your professional credentials provide unrivalled client confidence
KNOWLEDGE - The standards, professional guidance and support
MARKET ADVANTAGE - RICS status gives you a competitive advantage.

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3
Q

Q1 What are the new RICS RULES OF CONDUCT effective 2 February 2022?

A

Members and Firms must:
RULE 1 - Be honest, act with integrity and comply with their professional obligations, including to RICS.
RULE 2 - Maintain their professional competency and ensure that services are provided by competent individuals with the the necessary expertise.
RULE 3 - Prove good quality and diligent service
RULE 4 - Treat others with respect, and encourage diversity and inclusion
RULE 5 - 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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4
Q

What was the rationale in developing the new Rules of Conduct?

A
  • The previous rules had been in place since 2007. Following consultation with RICS Members, Firms, and the public. Majority voted in favour of replacing the existing rules.
  • Provide a single document to enable greater clarity for members and firms.
  • There is a greater focus on example behaviors, evolving technology and tackling climate change.
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5
Q

Can you explain you understanding of Rule 1?

‘Be honest, act with integrity and comply with their personal obligations, including to RICS’

A
  • Member and firms should not allow themselves to influenced improperly through the acceptance of work referrals, gifts or hospitality.
  • Identify Conflicts of Interests and do not provide a service should one exist.
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6
Q

Explain your understanding of Rule Number 2?
‘Maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise’

A
  • Members and firms must only act for clients where they have necessary knowledge, skills and recourses to carry out the work
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7
Q

What is your understanding of Rule Number 3?

‘Prove good-quality and diligent service’

A
  • Understand a clients project specific requirements before acting on their behalf.
  • The clients scope of service should be agreed before singing up to formal terms of engagement.
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8
Q

Explain your understand of Rule Number 4?

‘Treat others with respect and encourage diversity and inclusion’

A
  • Respect the rights of others
  • Eliminate any instances of discrimination on the basis of age, disability, gender, pregnancy, race, religion or sexual orientation.
  • No tolerance policy of bullying or harassment.
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9
Q

Explain your understanding of Rule Number 5?
‘Act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in their profession’.

A
  • Question practices and decisions that you suspect or not right
  • During public statement, Do not undermine public confidence in the profession.
  • When receiving complaints, ensure they are dealt with promptly, openly and professionally.
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10
Q

What is the Levitt report?

A
  • The Levitt Report was commissioned by the RICS following a treasury management audit in 2018.
  • Due to an oversite in Cash flow forecasting. The Levitt report recommended that the RICS Governing Council
  • Oversee internal dealings such as executive management bonuses
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11
Q

What are the Mandatory Professional Obligations of members?

A
  • Comply with CPD requirements (20hours per calendar year)
  • Members must cooperate with RICS
  • Members must promptly provide all information reasonably requested by the Standards regulation Board.
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12
Q

What are the SIX principles under the Bribery Act?

A
  1. Proportionality
  2. Top level commitment
  3. Risk Assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review.
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13
Q

What are the offences of the Bribery Act 2010?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
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14
Q

What are the mandatory professional obligations for FIRMS?

A
  1. Publish a CHP, which includes an alternative dispute resolution provider approved by the RICS, and maintain a complaints log
  2. Have adequate PI COVER that’s meet s the RICS requirements
  3. If having a Sole Principle, make appropriate arrangements for their professional work to continue in the event of an inability to work.
  4. Cooperate with the RICS. (SUCCESSION)
  5. Promptly provide information reasonably requested by the Standards and Regulations Board.
  6. Display on the business literature, in accordance with RICS published policy
  7. Report any matters that they are required to report under the Rules for the Registration of Firms
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15
Q

What companies does the Bribery Act Apply to?

A
  • All UK Entities and associated persons (e.g sub consulants and external advisors
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16
Q

Under Bribery Act, under what circumstances is a facilitation payment permitted?

A
  • When you or you companions are under duress or real danger
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17
Q

Can you explain why the RICS governance arrangements are currently under review?

A

The arrangements are under review following THE LEVITTS REVIEW’S (2021) very public exposure of the lack of clarity, structure, and purpose of RICS governance arrangements. Levitt called for a full review of the “purpose, governance and strategy” of RICS.

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18
Q

Who is carrying out the Review?

A

Lord Michael Bichard

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19
Q

What does Bichard consider necessary to enable RICS to move forward positively?

A
  • Create clarity of the purposes of the RICS

- Make proposals of new leadership and governance body

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20
Q

What is Bribery?

A

Bribery is the act of giving or receiving something to influence an action.

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21
Q

What are the penalties under the Bribery Act?

A

Maximum penalty of 10 years imprisonment /and or unlimited fine for individuals and companies.

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22
Q

What is JLL Gifts and Entertainment Policy?

A
  • Must be reasonable and proportionate
  • Ensure no risk that it could be considered inducement
  • No cash/ cash equivalents.
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23
Q

Money Laundering, Terrorist Financing and Transfer of Funds regulations 2017

What is Money Laundering?

A

Legitimisation of criminal proceeds

24
Q

What procedures should be in place to check the legitimacy of a client?

A

There are levels of due diligence:

  1. Customer Due Diligence (CDD)
    Identification, company house info etc.
  2. Enhanced Due Due Diligence
    Additional procedures for a high risk country or PEP (politically exposed person.
25
Q

Can you tell me any ‘RED Flags’ when it comes to Money Laundering Checks?

A
  1. Inability/ unwillingness to provide documents

2. Payments of fees in unusual currencies.

26
Q

What are the benefits of RICS regulations for firms?

A

C. onfidence – for clients
P. rofessionalism – firms provide clear, impartial, and expert advice
S. ecurity – firms have a recognised CPS, access to the free independent redress and PI Cover.

27
Q

What are the RICS requirements to start a new practice?

A

1 inform RICS with Firm Detail form

  1. Appoint a Responsible principle for RICS communications
  2. Register with RICS for Regulation
  3. Arrange PI insurance and send details to the RICS
  4. Set up procedure if handling Client Money.
  5. Obtain RICS approval for Complaints Handling Procedure
  6. Use RICS logo kit for practice material
  7. Plan succession plan of the business if a sole practitioner
  8. Ensure CPD logged online on the RICS CPD Management System, have a staff training plan in place
  9. Ensure completion of an online RICS annual return
28
Q

What is required by the RICS to close a practice?

A
  1. Inform the RICS of your retirement/ closure
  2. Inform clients of hand over arrangements made with a new firm.
  3. Return any client held money
  4. Inform insurers and arrange run off cover for a minimum of 6- years.
  5. Retain copy of client files and records for minimum 6 years.
29
Q

What are the three levels of disciplinary action the RICS can enforce to its members.

A
  1. Action by the Head of Regulation (Fixed penalty, Regulatory Compliance Order, CPD sanctions)
  2. Regulatory Tribunal ( Serious breaches of conduct, could include expulsion from membership or remove a firm)
  3. Appeal Panel ( Shall consider the grounds or appealing against the disciplinary actions
30
Q

Where would you find guidance on Complaints Handling Procedure ?

A

Details are set out in the RICS Guidance Note on Complaints Handling 2016

31
Q

What is your firm complaint handling procedure in practice?

A

Stage 1 (In house)

  • The complaint must be firstly raised to the DEAL DIRECTOR responsible for dealing with the instruction, in the attempt to bring a quick resolution.
  • If not resolved the complaint must be made in writing to the ENGAGEMENT DIRECTOR who will respond to the compliant within 15 working days.
  • If compliant not satisfied the compliant will be reported to the LEGAL AND COMPLIANCE TEAM Team who will respond within 8 weeks of the original complaint (describing any offer of redress)
Stage 2 (ADR)
-	If still unsatisfied, then you should suggest that the matter be passed to a RICS approved third party ADR.
32
Q

Name some different forms of ADR?

A
  1. NEGOTIATION (parties in dispute solve themselves)
  2. MEDIATION (Third party involvement to assist in the resolution, decision is non-binding)
  3. ADjUDICATION (Third party involvement where the outcome is determined)
33
Q

What are the three formal forms of dispute resolution?

A
  1. Arbitration – both sides must agree to let an impartial third party (arbitrator), decide the case. It is legally binding and can be enforced through the courts
  2. Litigation – Similar process to Arbitration but held within the civil courts not private arrangement.
  3. Adjudication – Statutory dispute resolution procedure, binding until dispute determined by litigation or arbitration
34
Q

What is negligence?

A

A duty of care exists to clients and third parties. When breached, and there is a loss, a claim for damages arises.

35
Q

Terms of Engagement

What must the terms of engagement state?

A
  1. Proposed fee basis
  2. Payment of expenses and how they are calculated
  3. Copy of the firms CHP
36
Q

What must you consider before accepting and instruction?

A
  • Check professionally competent
  • No conflicts of Interest or Personal Interests
  • Confirm terms of engagement and get written approval from the client before you start works
37
Q

When would it be necessary to decline an instruction?

A
  • I am not competent to undertake the works
  • The proposed client will not sign your terms of engagement and / or complete anti money laundering checks.
  • The professional indemnity insurance cap cannot be agreed
38
Q

Professional Indemnity Insurance

Is PII cover optional?

A

No, it is a mandatory requirement for all surveyors working in practice.

39
Q

What is the purpose of PII insurance?

A
  1. PROTECT THE FIRM AGAINST FINANTIAL LOSS
  2. PROTECT THE INSURED MEMBER
  3. PROTECT THE CLIENT
40
Q

What are the minimum requirement for PII Cover?

A

Minimum requirement is based on the firm’s turnover:

  • £100,000 or less: £250,000
  • £100,001 to £200,000: £500,000
  • £200,001 and above: £1,000,000 required for each and every claim
41
Q

What is the maximum level of uninsured excess required by the RICS?

A

Maximum uninsured excess is based on the firms turnover (as per new uk PII requirements effective 2022)

Turnover £10,000,000 or less – The greater of 2.5% of the sum insured or £10K
Turnover £10,000,0001 and above – No limit set

42
Q

What is Run- Off Cover?

A

Insurance cover maintained should a firm go bankrupt, cease to practice. RICS requires firms to have run off cover for at least 6 years. However, 15 years is recommended was claims can be made 15 years after work in undertaken.

43
Q

What is the RICS assigned risk pool?

A

It’s a temporary insurance facility for member who cannot obtain insurance cover.

44
Q

CONFLICT OF INTEREST

What is a conflict of interest?

A

When someone in a position of trust has competing or personal interests making it difficult to fulfil their role impartially

45
Q

What are the three types of Conflicts that may arise?

A
  1. PARTY CONFLICT – where an individual or firms professional duty to client conflicts with a duty owed to another client
  2. OWN INTEREST CONFLICT – where you have a personal interest that conflicts with your duty owed to the client
  3. CONFIDENTIAL INFORMATION CONFLICT – Relating to work between two parties that is confidential
46
Q

How might to manage a conflict of interest if the client insists on the instruction?

A
  1. Advise the client the NATURE OF CONFLICT, CIRCUMSTANCES around it and how the firm intended to manage the conflict such as setting up an INFORMATION BARRIER.
  2. Request written confirmation from the parties involved of their Informed Consent that the firm can act in accordance with the provisions of the procedures proposed.
47
Q

GIFTS, BRIBARY AND CORRUPTION

  • What are the key legislation to consider?
A
  • Bribery Act 2010

- Proceeds and Crimes Act 2002

48
Q

What the aim of the Bribery Act 2010?

A

Reduce bribery in business in UK and Abroad.

49
Q

What are the offences of the Bribery Act 2010?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
50
Q

What is Bribery?

A

Bribery is the act of giving or receiving something to influence an action.

51
Q

What are the RICS requirements to start a new practice?

A

1 inform RICS with Firm Detail form

  1. Appoint a Responsible principle for RICS communications
  2. Register with RICS for Regulation
  3. Arrange PI insurance and send details to the RICS
  4. Set up procedure if handling Client Money.
  5. Obtain RICS approval for Complaints Handling Procedure
  6. Use RICS logo kit for practice material
  7. Plan succession plan of the business if a sole practitioner
  8. Ensure CPD logged online on the RICS CPD Management System, have a staff training plan in place
  9. Ensure completion of an online RICS annual return
52
Q

What is required by the RICS to close a practice?

A
  1. Inform the RICS of your retirement/ closure
  2. Inform clients of hand over arrangements made with a new firm.
  3. Return any client held money
  4. Inform insurers and arrange run off cover for a minimum of 6- years.
  5. Retain copy of client files and records for minimum 6 years.
53
Q

What would you do if you were unsure whether a decision was ethical or not?

A

I would refer to the Ethics Decision Tree.

54
Q

What example frameworks does the ethics decision tree provide?

A
  • Is it legal?
  • Does it go against the rule of conduct?
  • Have you consulted with a senior member?
  • How would it be perceived in the public eye?
55
Q

Money Laundering, Terrorist Financing and Transfer of Funds Regulations (2017)

What is money Laundering?

A

The legitimisation of criminal proceeds

56
Q

How would a firm prevent Money Laundering?

A
  1. Through Customer Due Diligence (CDD) Checks on clients (Company type, registration, identification
    2 Though Enhanced Due Diligence (EDD) Checks if any RED FLAGS occur.
57
Q

Can you give me an example of any RED FLAGS when it comes to Money Laundering?

A
  1. Refusal / deception in providing identity documents
  2. Changes to parties involved in transactions
  3. Transaction in unusual currencies.

APC Mandatory Competencies (7 decks)

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