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Ethics Flashcards

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1
Q

What is the role of the RICS?

A

To maintain the highest standard of training
To protect consumers through strict regulation of professional standards
To be the leading source of information on land property construction and associated environmental issues

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2
Q

Why do the RICS regulate the profession?

A

to protect the public, uphold confidence and uphold professional standards

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3
Q

Who undertakes RICS regulation?

A

Standards and regulation board.

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4
Q

What are the five rules of conduct?

A

Be honest, act with integrity.
Maintain their professional competency.
Provide a good and diligent service.
Treat others with respect and encourage. diversity and inclusion.
Act in the public interest.

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5
Q

What is the RICS’ view on bribery?

A

Shouldn’t partake in a bribe unless danger to life.

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6
Q

What is considered a bribe?

A

Giving or receiving of a financial or other advantage.

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7
Q

What are the six principles of the Bribery Act?

A

Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitor and review

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8
Q

Offences of bribery

A

Giving a bribe
Receiving a bribe
Failing to prevent a bribe.
Bribing a foreign public official

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9
Q

Bribery penalties

A

10 years maximum prison sentence and or unlimited fine.
Companies (Unlimited fine)

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10
Q

What should you reference if you get offered a gift, cash or hospitality?

A

Reference:
Bribery Act 2010
RICS Professional Standard
Organisations procedures
Professional objectivity, openness, transparency
Proportionality
Tax implications
Sanctions
Employment contract

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11
Q

What is the professional standard relating to bribery and AML?

A

RICS Professional Standard: Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019

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12
Q

What is the structure of this?

A

P1 Bribery and Corruption (B&C)
Money Laundering and Terrorist financing (ML & TF)
P2 Guidance
P3 Supplementary guidance

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13
Q

What is a conflict of interest?

A

When a member’s independence is threatened due to the existence of a conflict between two clients

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14
Q

What is the purpose of undertaking a COI check?

A

To ensure there is no conflict.

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15
Q

What are the three types of conflict?

A

Party conflict – work on same instruction for two different parties.
Own Interest conflict – personal interest
Confidential Information Conflict – work between two parties that is confidential.

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16
Q

What is the difference between conflict avoidance and conflict management?

A

Conflict avoidance = don’t accept instruction.
Conflict management = instruction accepted; steps taken to manage the conflict with written agreement from all parties.

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17
Q

What would you do if you came across a conflict?

A

Understand nature of conflict.
Are you comfortable to continue with the instruction knowing there is a conflict.
Inform client of conflict and either don’t accept instruction or how the conflict can be managed.
Only proceed on instruction if informed consent from client in writing.

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18
Q

How do you undertake a conflict of interest check?

A

Internal system, put postcode and client name in. Flags if there is a conflict.

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19
Q

Why is CPD important?

A

Keep up to date with market knowledge.
Educational, understanding changing processes in the RICS.

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20
Q

How long do you store AML information on individuals?

A

Up to 5 years.

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21
Q

If you find an AML discrepancy, what do you do?

A

Suspicious activity should be reported to the National Crime Agency

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22
Q

What are CPD requirements?

A

20 hours, 10 formal.
Maintain relevant and current understanding of RICS RoC on 3 year rolling basis.
Log all CPD on RICS CPD management system by 31st January each year.

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23
Q

What are the main changes from the previous Rules of Conduct?

A

Changed from separate rules for firms and members to a single set.

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24
Q

How do you define claimes made?

A

PII works on this basis.
Policy covers claims made in that period regardless of when negligent act occurred.

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25
Why were the rules updated?
Simpler structure. Clear examples. Include diversity and inclusion. Understand evolving technologies. Tackle global challenges.
26
To whom do you owe a duty of care?
public and client
27
What is the procedure for setting up an RICS regulated firm (Statutory procedures)?
Disclose business name, inform HMRC, comply with Bribery Act, Equality act, H&S compliant, fire safety compliant. set up public and employee liability insurance
28
What is the procedure should you wish to close the firm?
Inform client, RICS, insurer. Return client monies. Set up ‘run-off’ cover. Hold accounts and client info for 6 years.
29
What is PII and what level of PII is required for your firm?
Professional Indemnity Insurance to protect both yourself, the client and third parties against negligence claims. Turnover 0-100k = £250k, 100-200k- 500k, 200+ = £1m.
30
What are the RICS PII requirements?
All members must ensure have appropriate level of insurance in place.
31
What is a Locum?
Person who temporarily covers the duties of a surveyor or firm member who cannot work.
32
What is the maximum level of uninsured excess required by the RICS?
Turnover less than £10m = greater of £10k or 2.5% of sum Turnover greater than £10m = no set limit.
33
What is the difference between PII cover and limitation of liability?
Your PII cover is the total liability cover, where as a limitation of liability can be agreed with the client on a lower basis.
34
What is run off cover and how much do you need?
Insurance set up for after closing a practice for 6 years. Need minimum cover of £1m.
35
What is negligence?
Failure to provide duty of care to client or third parties, there is loss and a claim for damages arises.
36
If you are in a social setting and someone asks you for some advice on a piece of land they are selling what do you do?
Explain that you would be unable to give advice. However, can schedule a call within working hours to discuss this.
37
What is the key legislation regarding gifts? What else would you consider?
Bribery Act 2010. RICS decision tree Company gift policy and register
38
What is your company’s gift policy?
We do not accept gifts over £25, any gifts must be registered, always reference bribery act and look at timing.
39
What legislation leads ML And Bribery practices?
Terrorist Financing and Transfer of Funds Regulations, 2017. Bribery Act 2010
40
What is money laundering?
The process of ‘cleansing’ illegally obtained money through investing in legitimate assets.
41
What are the key provisions of the AML regulations?
Have a written money laundering and terrorist financing risk assessment. Implement policies and systems to address ML and TF. Provide staff training. Comply with new customer, enhance and simplified DD requirements. Ensure appropriate record keeping. AML checks must be undertaken Include additional high risk-factors
42
What are the different levels of due diligence checks?
Customer Due diligence and enhanced due diligence
43
What are the penalties for non-compliance of AML?
14 years prison unlimited fine for assisting in money laundering. 5 years for failing to report / tipping off
44
What are some examples of red flags?
Unable to present ID Paying in cash Changing personnel Wanting to make a deal happen quickly Multiple transactions under £10k.
45
If you find AML red flags or suspect AML activity, what do you do?
Report to national crime agency.
46
What are the three parts of the RICS Professional Statement – Countering Bribery, Corruption, Money Laundering and Terrorist Financing?
Mandatory requirements Guidance for good practice Supplementary guidance on some concepts set out in parts 1 and 2
47
What do you do if receive bribe?
1. Don't accept bribe 2. Alert supervisor
48
Who polices the Bribery Act?
Serious Fraud Office
49
Benefits of being RICS regulated firm
Status Recognition Market advantage Knowledge Network
50
What is a conflict of interest
when a firm or member's independance and impartiality is threatened due to a conflict between two parties.
51
6 main areas of good practice
holding clients money providing information to clients receipts of clients money payments from clients account accounting records and controls compliance
52
How should complaints handling procedures be handled?
Complaints should be written and sent to the business, to be acknowledged within 7 days and replied to within 28 days.
53
What is the Hierarchy of the RICS?
RICS President RICS Vice president elect RICS Senior vice president
54
What review was reported in 2022
The Bichard Review
55
What are the RICS future foundations
Vision Mission Strategic Goals Values World class organisation
56
Name 5 benefits of being an RICS member
Status Recognition Market advantage Knowledge Network
57
How often do you undertake Ethics training?
3 years
58
What due diligence do you undertake?
Client due diligence
59
What information is required by the RICS for registration?
type of business name of responsible principal statutory regulated activities Nature of clients Complaints Handling Procedure PII details Does firm hold client money?
60
Mandatory requirements for RICS members?
Comply with CPD requirements Cooperate with RICS Provide requested information by standards board
61
What are the RICS requirements for starting a new business?
Inform and register RICS Appoint responsible principle Arrange PII and send to RICS Set up client money handling procedures including protection scheme Set up CHP + Complaints log Appoint CH officer Logo Kit Plan for succession Ensure CPD log Ensure completion of online RICS Annual return
62
What are the statutory requirements for starting a new business?
Required to disclose business name Disability discrimination compliance (Equality Act 2010) Financial services compliance (FS + Markets act 2000, FS Act 2012) Bribery act 2010 compliance Appoint AML officer (ML regulations 2017) Health and Safety compliance (H+S Act 1974) Control of Asbestos Regulations 2012 compliance Fire safety act 2021 compliance Register for data protection (GDPR + Data protection act 2018) Estate Agency compliance (Estate Act 1979), (Misrepresentation Act 1967), Consumer Regulations Act 2008) Inform HMRC for VAT + Tax registration Ensure compliance with employment law Ensure insurance compliance for employer and public liability.
63
How does a firm close their practice?
Inform RICS of closure Inform clients and hand arrangements to new firm Return Client monies Inform insurers Retain copy of files for 6 years minimum
64
What is the decision tree?
framework of questions which members should ask themselves when facing a situation which could result in an unethical manner
65
Why do the RICS regulate the surveying profession?
Protect the public Promote confidence Uphold prof standards
66
Who undertakes the regulation?
Standards and regulation board
67
What are the procedures for breaches?
Disciplinary action
68
What are the levels of disciplinary action?
- Action by head of regulation - Disciplinary panel - Appeal panel
69
What is the process
Initial investigation followed by 1 of 4 of: - Fixed penalty notice (fine or caution) - Make regulatory compliance order - refer the matter to member of regulatory tribunal - refer matter to disciplinary panel.
70
Why would it be a regulatory compliance order?
Low level breaches of the rules
71
Why disciplinary panel? What penalties are available?
For more serious breaches of conduct. 1. Regulatory compliance order 2. Reprimand 3. Caution 4. Fine 5. Impose conditions upon future registration 6. Expulsion from membership 7. require publication of results of hearing on RICS website or other sources.
72
Why might you decline an instruction
- You are not competent to undertake the works - Do not have sufficient facts on the issue - client won't sign Tof E or complete AML check - PII cap not agreed - Advice on personal basis
73
What is dual agency?
When an agent has contractual agency relationship with both seller and buyer
74
What must firms include in their CHP
Alternative Dispute Resolution Mechanism
75
What are the categories of the RICS documents?
Professional standards - Set out all mandatory requirements that must be followed. Guidance notes - Professional statements - Codes of practice - Jurisdiction guides -
76
What is informed consent?
77
What is a responsible principle?
Has primary responsibility for ensuring that RICS professional, technical and ethical standards are applied, upheld and supported.
78
What are the protected characteristics of the quality act
age race gender religion sexual orientation disability marriage situation pregnancy and maternity
79
What is the key legislation to consider in relation to consider in relation to bribery, gifts and hospitality?
Bribery act 2010 - aims to reduce bribery in business in the UK and abroad
80
Who is it policed by
Serious fraud office
81
Has the RICS published any information on PII requirements?
Professional indemnity insurance requirements version 9 (2022)
82
What would happen if a firm couldn't obtain run off cover from the open market or their incumbent insurer
They will be able to apply for coverage to the RICS run-off pool
83
What is run off cover?
Extension to PII cover to cover firm for past work.
84
What is the final step of the RICS ethics decision tree
Would you be content for your actions top be made public. If no don't proceed. If yes decide what action to take.
85
What is a principal
Someone who can carry out work without supervision eg a director
86
What kind of companies can register for membership?
LLP Corporate bodies Sole practitioners Partnership
87
What is a responsible principal
Someone who regularly reports to the RICS and ensures all reasonable steps are taken to ensure a firms compliance to regulatory and RICS requirements
88
What are Bye Laws.
Laws and regulations set by the governing council which are the basis of the RICS Rules of Conduct
89
What do they Bye laws do?
The bye laws provide power for head of regulation to make disciplinary and regulatory decisions. Including issuing disciplinary penalties and costs.
90
Can you provide some examples of the bye laws?
BL 1 - Application and definitions BL 2 - Membership and registration BL 3 - Designations BL 4 - Contributing to funds BL 5 - Conduct BL 6 - Governing Council, Office, Staff BL 7 - Subordinate boards, committees, groups BL 8 - Procedure for general meetings BL 9 - Accounts and audit BL 10 - General
91
What is the motto of the RICS
There is measure in all things
92
What are the two levels of due diligence?
Customer Due Diligence (CDD) Enhanced Due Diligence (EDD)
93
What are the 4 levels of RICS membership
Student Associate Chartered Fellow
94
What are the confidential aspects of the Red Book
Client data Property specific data Contract terms
95
If you were a Sole Trader, how would you set up your Complaints Handling Procedure
You would select an external firm that could be complained to.
96
What would you have in place if you were progressing with an instruction where a conflict was present in the same office as you?
Information barrier. Keep all information on a secure file so other conflicted side cannot see the information.
97
If a conflict of interest was present within your organisation or a different team, what could you implement to protect the data?
Information barriers. This means the separation of information between members of the same team or firm to prevent confidential information from being passed between them
98
Why is there a duty of care to the public when a member of the RICS
As RICS members are bound by the royal charter.

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