Ethics 2 Flashcards
(41 cards)
1
Q
- What is the process of opening an RICS regulated firm?
A
RICS Requirements:
- Inform RICS
- Appoint Responsible Principal
- Register with Regulatory Board
- Arrange PII, Client Money Handling Procedure and CHP + approved
- Register with RICS Valuer Registration Scheme if required
- Plan for succession
- Ensure completion of Annual Return inc. CPD
Statutory Compliance:
- Disclose business name
- Equality Act and Bribery Act compliance
- Appoint AML and H&S Officers
- Health and Safety Officer
- Inform HRMC for tax
- Ensure compliance with local laws
2
Q
- What is the process of closing an RICS regulated firm?
A
When closing a firm, for the RICS, you must:
o Inform RICS
o Inform clients as soon as possible
o Return money held for clients
o Inform insurers and acquire run-off PII for min 6 years
o Retain client’s files for 6 years
3
Q
- Can you tell me about RICS Disciplinary Procedure?
A
- Standards and Regulations Board
- Set out in ‘RICS Regulatory Tribunal Rules 2010’.
Head of Regulation can;
1.) Serve Fixed Penalty Notice
o Information provided to RICS breach
2.) Make a Regulatory Compliance Order
3.) Refer matter to member of Regulatory Tribunal
4.) Refer matter to Disciplinary Panel
Appeal:
o Includes members outside of RICS
o Reviews original and new information
4
Q
- What can you tell me about the background of the RICS?
A
- Started in 1868
- Has a royal charter, granted by Privy Council in 1881
- Regulations and byelaws set out the governance of the Institution
- President = Ann Gray FRICS
- 140,000 qualified and trainee members
- 4 Levels: FRICS, MRICS, AssocRICS and Trainee
5
Q
- What requirements do you need to become FRICS?
A
- Achieve four of the following:
- 5+ years as MRICS
- Leadership role
- Professional achievement
- Academic achievement
- Raising the profile of the RICS
6
Q
- What is the governance structure of the RICS?
A
- Privy Council – advisory board to Monarch and Ministers
- Governing Council - provides management and strategic direction
- Regulatory Board, Management Board, Audit Committee
7
Q
What is Money Laundering and the method?
A
- Money laundering is when proceeds of criminal activities are disguised or converted to make a legitimate asset
3 Stages of Money Laundering:
- Placement – Move money from source to legitimate system
- Layering – transactions to disguise
- Integration – clean money returned
8
Q
What does the RICS Countering Bribery, Corruption, Money Laundering and Terrorist Financing say?
A
- Required to have a written AML assessment
- Implement systems to prevent AML and meet requirements
- Provide staff training
- Comply with requirements regarding Politically Exposed People
- Ensure record keeping
- AML checks must be undertaken for proposed purchasers
- Seek additional risk investigation where required
9
Q
When is an AML check required?
A
- Required for sales
- Required for lettings (and renewals) over €10,000 per month
10
Q
What are the levels of AML checks?
A
- Simplified – limited information available (PLC)
- Standard – normal checks (Ltd)
- Enhanced – companies or people with any red flags
11
Q
What do you ask for in an AML check?
A
- Identify the ‘Beneficials’ (owners of the company over 25%)
- List of documents including acceptable ID – 2 forms required (driving licence, passport etc)
- For companies: name, company number and address.
- SmartSearch software
12
Q
Why would you undertake an enhanced check?
A
- Politically Exposed People
- High-risk countries
- Business associates
- Limitation of cash accepted (€10,000)
- Detailed record keeping
- AML Officer identified
13
Q
What is a SAR?
A
- SAR (Suspicious Activity Report) required if notice any risks
o Defence – defend against sale (postpose transaction)
o Information – walking away from the job
14
Q
What are the penalties for AML negligence?
A
- Max 14 years in prison and/or unlimited fine for assisting money laundering
- Max 5 years in prison and/or unlimited fine for tipping off or informing that under AML suspicion OR failing to report suspicion
15
Q
What are potential red flags in an AML process?
A
- Unwillingness to participate
- Changes to parties involved in transaction
- Unexpected urgency
- Potential loss making
- Payment in unusual currencies
16
Q
What is the AML protocol in a joint agency instruction?
A
- Both undertake due diligence
- Reliance on other party
17
Q
What does the Proceeds of Crime Act 2002 include?
A
- Provides enforcement authorities the right to recover criminal money
- Also provides criminal offences in order to combat AML – inc the concealment of criminal money
18
Q
Who oversees the disciplinary of RICS members?
A
RICS Standards and Regulations Board
- Responsibility to protect the public
19
Q
Where is the RICS disciplinary process set out?
A
RICS Regulatory Tribunal Rules 2020
20
Q
What are the different levels of disciplinary action?
A
3 Levels of Action:
- Action by Head of Regulations
- Disciplinary Panel
- Appeal Panel
21
Q
What is contained within the process of disciplinary procedure?
A
- RICS Head of Regulation formalise the investigation
- Then decide on one of the following:
- Serve a Fixed Penalty Notice
- Regulatory Compliance Order
- Refer to Regulatory Tribunal
- Refer to Disciplinary Panel
22
Q
What is a Regulatory Compliance Order?
A
- For minor breaches (e.g. CPD non compliance)
- Withdraw member from actions for a period of time
23
Q
What is a Disciplinary Panel?
A
- For serious breaches
- Includes non-RICS members
- Penalties include - fines, exclusion
24
Q
What is the Appeal Panel?
A
- Includes members outside the RICS
- Reviews new and original information
25
What is PACTT?
- Used when assessing penalties
o Proportionality – is penalty proportionate/fair
o Accountability – accountable to public
o Consistency – treat all members equally
o Targeting – serious breaches
o Transparency – all parties
26
What are the thresholds for the level of PII cover required?
PII Thresholds:
Turnover below £100,000 = PII £250,000
Turnover below £200,000 = PII £500,000
Turnover above £200,000 = £1M
- Maximum excess is £10,000 for firms with turnover below £10M
- Not max excess for those over £10M
27
How many hours of CPD are required each year and what is the split?
- 20 hours
- 10 minimum = Formal
- Undertake by 31st January each year
28
Would you accept a bottle of wine from the bank's customer after the instruction?
No, think about how the bank would perceive this. Even if it is after the instruction.
29
Should you negotiate on a fee?
No, inform client that this fee has been considered and reflects the works and experience.
- Competition is encouraged
- Fee cutting is not ethical
- Market based fees
30
Where can you find the RICS Decision Tree?
RICS Website
Wwebpage related to Rules of Conduct
31
Who can members contact with ethical dilemmas?
RICS Regulation Confidential Hotline
32
What do the RICS publish regarding Social Media?
Use of Social Media Guidance Note
- Members damaging the reputation of the RICS and profession online
- Discrimination
- Hate
33
What guidance is there on dealing with confidentiality?
- Mentioned within the RICS Bye Laws
- Estate Agency Guidance Notes
34
What are RICS Bye Laws?
- 10 bye laws
- Set out requirements of RICS members
35
What kind of money can client's money include?
- Rent
- Deposits
- Service Charges
36
What guidance is there for Clients Money Handling?
- RICS Client Money Handling Professional Statement
37
What are the 6 main areas for good practice within the RICS Client Money Handling Professional Statement?
- Holding client money
- Providing information to clients
- Receipts of client money
- Payments from client accounts
- Accounting records and controls
- Compliance
38
How would sanctions have an affect on AML?
- Identifying purchasers through AML checks
- Potentially restricted from purchasing property
- Contact OFSI for assistance
39
Where would you consult for advice on AML?
- RICS Countering Bribery, Corruption, Terrorist Financing and Money Laundering
40
Is being offered a form of hospitality allowed?
IT DEPENDS
- Can it be perceived as a bribe?
- What is the value of the item?
- Is it allowed by the company policy, RICS and local laws?
- Is it proportional?
- What is the timing?
- What is the relationship?
41
What is a piece of case law for negligence?
- Yianni v Edwin Evans (1981) - residential valuer liable for mortgage
