Ethics Condensed COPY Flashcards
(214 cards)
1
Q
What are the new RICS documentation categories?
A
Professional Standards
- Document that set out guidance for competent and ethical practice
- eg existing Professional statements and guidance
Practice information
Document that provides advice or practice support to RICS members and firms
2
Q
Why is the change occurring for RoC?
A
Following the Bichard Review:
* They want to ensure RICS standards are up to date and easy to use.
3
Q
Define Professional Standard
A
A set of guidelines that outline the expected behaviors and competencies of RICS members
4
Q
Define Practice Information
A
- These provide advice or practice support to RICS members and firms.
- They are not mandatory.
- It does not make explicit recommendations.
- It includes processes, toolkits, checklists, insights etc.
5
Q
When is the change rolling out (PS/PG)?
A
RICS are currently reviewing and re-categorising documentation.
6
Q
Founded
A
1868
7
Q
Royal Charter
A
A document that gives an organization legal status and defines its powers, objectives, and constitution.
RICS has a Royal Charter, initially granted by Privy Council in 1881
8
Q
What sets out the governance of the institution?
A
RICS Regulations and Bye Laws set out the governance of the Institution
9
Q
What are the FOUR levels of membership?
A
There are 4 levels of membership
1. FRICS
2. MRICS
3. AssocRICS
4. Trainee/Student
10
Q
What to do to become a fellow?
A
- Evidence of achievement of FOUR fellowship characteristics, which include:
* five or more years at MRICS,
* a leadership role,
* professional/technical achievement,
* academic achievement or
* raising the profile of RICS - A portfolio of professional achievement to support the application is required to include your CPD
11
Q
Current governance structure
A
- Governed by internal councils and boards
- Governing council has 20 members
- The Standards and Regulation Board and the Management Board report to the governing council
- There are 17 specialist professional groups covering property, land and construction
12
Q
What does the governing council do?
A
- Runs the RICS
- Providing management and strategic direction
13
Q
Who is the current Chief Executive officer?
A
Justin Young
14
Q
Who is the current president and what do they do?
A
Justin Sullivan FRICS
* He chairs Governing council
15
Q
What is the role of the RICS?
A
- Promote and enforce the highest professional qualification and standards
16
Q
What are the THREE main roles of the RICS?
A
- Highest standards of education and training
- To protect consumers through strict regulation
- To be the leading source of information and independent advice on land, property, construction and associated issues (RICS 2015).
17
Q
What was the Levitt Review?
A
- Undertaken in 2021.
- Public exposure of the lack of clarity, structure and purpose of RICS governance arrangements.
- Levitt called for a full independent review of ‘purpose, governance and strategy’ of RICS.
This led to a review by Lord Michael Bichard.
18
Q
What was Bichard Review?
A
- Followed the Alison Levitt Review in 2021.
Aim: to clarify the PURPOSE of RICS, including its responsibility to act for the public advantage.
Provide proposals for incoming leadership/governing body on the future culture and strategy of the institution. - RICS recruited Diversity, Equality and Inclusion and Sustainability Panel Chairs.
19
Q
What were the 7 key areas of the 36 recommendations?
A
1. PUBLIC INTEREST
2. MAINTAINING SELF REGULATION
3. DIVERSITY AND INCLUSION
4. EMPOWERING MEMBERS
5. INDEPENDENT REVIEW
6. NEW STRUCTURE
7. LEADERSHIP
20
Q
What are the FIVE Future Foundations in November 2023 following the Bichard Review
A
- VISION
- MISSION
- STRATEGIC GOALS
- VALUES
- A WORLD CLASS ORGANISATION
21
Q
What are the 5 benefits of being an RICS member?
A
- Status - your professional credentials provide unrivalled client confidence
- Recognition – Promotion of your professional excellence to governments and markets
- Market advantage – RICS status and standards gives you a competitive advantage.
- Knowledge – International practice standards, professional guidance, CPD and knowledge sharing
- Network – Access to professional worldwide
22
Q
What major challenges do the RICS face?
A
- Women in property – RICS launched first Women in Surveying Insight Report in July 2023. Looked at challenges such as discrimination, bias and inequity. In UK and Ireland, women represent 17% of RICS members.
- Sustainability – built environment accounts for around 40% of global carbon emissions. RICS Sustainability Report 2022. RICS Value the Planet Campaign (aims to help implement UN Sustainable Development Goals)
- Fire Safety – fire safety in buildings and external wall systems. UK Fire Safety conference in November 2023 on building safety and EWS1. Fire Safety Act 2021, Building Safety Act 2022, Fire Safety Regulations 2022. RICS published professional statement on ‘Valuation approach for properties in multi-storey, multi-occupancy residential buildings with cladding’ in 2022.
23
Q
FOUR Requirements for registration
A
- Firms providing surveying services to the public must register for regulation to ensure that there is a recognised quality benchmark for all firms.
If there are no RICS members, a firm cannot register - Regulation provides a ‘gold standard’ of quality control for clients
- Firms must annually make a return to the RICS confirming their compliance with their obligations
- A practice can be a corporate body (a company), a partnership, an LLP (Limited Liability Partnership (LLP) is a legal business structure that combines the flexibility of a partnership with the limited liability of a company) or a sole practitioner practice
24
Q
RICS ‘Rules for the regulation of firms’ 2022
A
- If 50% RICS members then it has to be regulated,
- If at least 25% then it can apply to be regulated
- Need a ‘Responsible Principal’ to ensure compliance
25
Information required by the RICS for Registration
1. Type of business
2. Name of the **responsible principal**
3. Statutory regulated activities – such as for financial services
4. **Nature of clients**
5. **Complaints handling procedure details** and records
6. **Professional indemnity insurance** details
7. Whether the firm holds **client’s money**
26
When were the Rules of Conduct published?
Published October 2021, effective 2nd February 2022.
27
What do the Rules of Conduct do?
* Promoting and enforcing the highest ethical standards in valuation, the development and management of land, real estate, construction and infrastructure.
* Global basis.
* They apply to both members and firms.
* They replace the previous Rules of Conduct for Members and Firms and the 5 Global Professional and Ethical Standards.
28
Why do we have Rules of Conduct?
Sets out the standards of professional conduct and practice expected of RICS members and firms
29
Rule 1
Members and firms must be honest, act with integrity and comply with their personal obligations to RICS
30
Rule 2
Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
31
Rule 3
Members and firms must provide good quality and diligent service
32
Rule 4
Members and firms must treat others with respect and encourage diversity and inclusion
33
Rule 5
Members and firms must act in the public interest, take responsibility for their actions and act to **prevent harm** and **maintain public confidence**
34
Three Professional Obligations for members?
RICS members must:
1. Comply with the CPD requirements set by RICS
2. Cooperate with RICS
3. Provide all information reasonably requested by the Standards and Regulation Board
35
SEVEN Professional obligations for firms (Appendix to Rules of Conduct)
1. Publish a **CHP** and maintain a **complaints log**
2. Appropriate **PII** cover
3. If having a sole principle, make appropriate arrangements for their professional work to continue in the event of their incapacity, death or absence from work
4. **Cooperate** with RICS
5. **Provide all information** requested by the Standards and Regulation Board,
6. Display on their business literature, in accordance with RICS’ published policy on designation, a designation to denote that they are regulated by the RICS
7. Report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
36
Why have the Rules of Conduct been updated?
- Provide **one clear framework**
- Provide **clear examples** alongside each rule.
- Focus on **respect, diversity and inclusion**.
- Understand evolving **technology**.
- Tackling global challenges such as **sustainable development**.
- To respond to new risks and challenges.
37
What is the ethics decision tree?
Provides a framework of questions which members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation
38
Why is it important to regulate the surveying profession?
* To **protect** the **public**
* Uphold **confidence** in the profession
* Uphold **professional standards**
39
Who undertakes disciplinary procedure?
Undertaken by the Standards and Regulation Board
40
What is the guidance on disciplinary procedure?
RICS Regulatory Tribunal Rules 2022
41
What is the guidance for the regulatory approach?
**RICS Regulatory Decision Making 2022** provides an outline of the regulatory approach by RICS of regulated members, non-members and firms
42
Action by a Disciplinary Panel
Use for serious breaches of conduct
43
What are the penalties available to a Regulatory Tribunal Disciplinary Panel?
1. **Issue a Regularity Compliance Orde**r (as above)
2. Reprimand
3. **Fine**
4. Impose an unlimited amount of fine
5. Impose conditions upon future continued RICS registration
6. **Expulsion**
7. Require publication of the results of the hearing
44
What is the associated guidance with use of social media?
Regualtion: Use of social media: guidance for RICS members 2021
45
What does the guidance on social media state?
RICS is likely to investigate concerns about social media posts where they involve:
1. Discrimination
2. Dishonesty
3. Abusive or threatening behaviour
4. Bullying/harassment
5. A pattern of frequent or a large number of concerning communications
6. Ignoring previous advice or warnings about concerns
46
When is the RICS unlikely to investigate social media posts?
RICS notes that it is unlikely to investigate social media posts which:
* Are critical of an organisation, its policies and performance, rather than individuals
* Use **professional** and respectful **language**
47
What is the latest on Professional Standards?
* The RICS is in the process of re-categorising all current PS and GN to become Professional Standards
48
What is a Professional Standard?
* ‘Set requirements or expectations about how they provide services or outcome of their actions’
* Mandatory requirements, use the word ‘**must**’ and these must be complied with
* Recommended practice uses the word ‘**should**’
49
What is an RICS Practice Information?
Information to support the
- practice,
- knowledge and
- performance of RICS members and regulated firms
50
What are examples of practice information?
These can include but are not limited to:
- good practice,
- information,
- insights of processes
51
What must be included in ToE?
1. clients agreement to proposed fee basis
2. agreement of payments of expenses
3. copy of CHP can be available upon request
52
What do you know about fee negotiations?
* Avoid price fixing
* Market-based and agreed on an ad-hoc basis.
* Consider level of service when negotiating.
* Be completely **transparent** (e.g., if a **referral fee** is involved).
* Consider the **Bribery Act 2010** and the **RICS Rules of Conduct**.
* For valuations should not be based on the value of the property
53
What is the relevant guidance on granting and receiving referral fees?
Bribery Act 2010 and the RICS Rules of Conduct 2021
54
When agreeing fees what should be considered?
1. Time
2. Cost
3. Quality
55
THREE steps of Terms of Engagement
1. Competent
2. No conflicts of interest or personal interest
3. Confirm terms of engagement in writing and get written approval from the client BEFORE you start work on the instruction
56
Why might you decline an instruction?
1. Not competent
2. Insufficient facts
3. The client won’t sign ToE or complete AML checks
4. Conflict of Interest
5. PII liability cap cannot be agreed
6. The advice is for a friends or on a pro bono basis and your PPI cover does not cover work done on a personal basis
7. The potential client is included in the UK governments sanctions list
57
What is a conflict of interest?
Arises when a member of firms independence and impartially is threatened due to the existence of conflict between two client.
58
Conflict avoidance v conflict management (‘No v Yes’)
* A conflict avoidance = do not accept the instruction
* Conflict management = instruction is accepted, and steps are agreed and put in place to manage the conflict, with the written agreement of all parties
59
What is the RICS Guidance on Conflicts?
RICS **Global** Professional Standard: Conflicts of Interest 2017
60
What does the guidance on conflicts state?
* 3 types of conflict:
* “Informed consent” must be given
* Must be in best interest of all parties and legal.
* All conflicts must be managed in accordance with the Professional Standard
* All firms must keep records to show their compliance with the Standard
61
What is informed consent?
* This can only by given in writing
* Need to be transparent about any material factors
* Only seek informed consent if satisfied that all relevant parties are best served by doing so
62
What 2 things do you consider when managing a conflict?
* Transparency
* Openness
63
What are the 3 steps of handling a conflict of interest?
Steps:
1. Conflict avoidance
* Consider whether the conflict is irresolvable because your impartiality is compromised and should be avoided or whether it can be properly managed maintaining transparency and openness
2. Written advice to both parties
* Disclose the nature of the conflict and how you propose to manage it
* Be clear – so parties can make informed decisions
* Request written consent
3. Conflict management
* Set up information batter
64
How should information barriers be operated?
* The barrier must be **robust**
* Must be **physically** separated, preferably in different buildings, or different floors
* There is a **virtual IT barrier**
* Information should be securely stored
* Keep a clear **audit trail** of the **conflict check process**
65
What is an personal/own interest conflict?
- This arises when acting for a family member, a close business associate or someone with whom you have financia (‘**connected** person’)
- You must not let a personal interest **interfere** with or influence your **professional judgment**.
- Full transparency is required
66
What is client confidentiality?
- **RICS Byelaws** state that client confidentiality must be maintained.
- Permission to share information is needed unless under investigation.
- **Files** must be held for a **minimum** of **6 years** before disposal.
67
What would you do if you overheard confidential information?
- Cannot be used for own purposes, info disposed of securely.
- Client must be notified of error and matter recorded.
68
What does the RICS state regarding the CHP?
- Firms must have a **published** complaints handling procedure (CHP) that **meets** the **requirements** of the RICS Rules of Conduct 2021.
- CHP needs to be in **ToE**
- Need to **notify** your **PPI** insurers if there is a claim for negligence
- A **complaints log** must be maintained t
- Firm must include an RICS approver Alternative Dispute Resolution **(ADR)** mechanism in their CHP.
69
What must be detailed in the complaints log?
- details,
- progress and
- outcome of any complaints
70
What is the first thing you do when there is a complaint?
Notify PI insurers and CHP must be approved by the RICS.
Whenever the firm receives a complaint from who they owe a duty of care.
71
What is stage 1 on CHP?
**STAGE 1 – In House**
1. CHP details issued,
2. clear procedure,
3. complaints handling officer,
4. submitted in writing.
Acknowledged within 7 DAYS and Investigated within 28 DAYS.
72
What is CBREs CHP timeframes?
Acknowledged within **5** DAYS and Investigated within **20** DAYS
73
What is stage 2 of CHP?
**STAGE 2 – ADR, 3rd Party**
* If unresolved, an appropriate **redress mechanism** must be provided such as the** Property Redress Scheme** and the **RICS Dispute Resolution Service**.
74
Whats included in CBRE ToB
* Charges and expenses
* Payment of fees
* CHP
* Liability
* Termination
* Money laundering and sanction regulations
* Processing of data
75
What are the 6 types of ADR?
1. **Negotiation**
2. **Mediation** – neutral mediator – facilitates discussions between parties.
3. Early neutral evaluation – independent, non-binding opinion
4. Ombudsman – confidentially receive case details and instigates resolution of complaint.
5. **Arbitration**(Arbitration Act 1996)
6. **Independent Expert Determination** (RICS Guidance Note 2016)
76
What are the FOUR requirements of CPD?
1. Min **20 hours CPD** in a **calendar** year
2. at least 10 must comprise **Formal** CPD.
3. Must maintain current understanding of RICS Rules of Conduct during a rolling 3-year period
4. All member much **record** their CPD activity using the **RICS CPD management system**
77
What is the difference between formal and informal learning
Formal
- Structured learning
Informal
- Self-managed learning
78
Why would there be a negligence claim?
* Duty of care is breached
* Claim for damages arises
79
What is the Statutory Compliance for setting up a new practice? (NINE)
1. Disclose **business name**.
2. **Equality Act 2010**, Financial services Act 2012, **Bribery Act 2010**.
3. **Money Laundering Regulation 2007** – appoint Money laundering officer
4. **Health and Safety Compliance** - Health & Safety Act 1974, Control of Asbestos Regulations 2012.
5. Fire safety compliance, - **Fire Safety Act 2021**
6. Register for data protection - GDPR 2016 and **Data Protection Act 2018** compliance.
7. **Inform HMRC** – VAT threshold = £90k per annum.
8. Compliance with c**urrent employment law**.
9. Ensure **insurance compliance** for employer and public liability
80
How to avoid negligence?
- Understand the clients **objectives**
- Confirm scope T**erms of Engagement**
- Ensure you are **competent**
- Make detailed file notes and take photographs
- Keep up to date with market knowledge and legislation
- **Cap** the professional liability excess on your PII policy in the terms of engagement
81
What is the Limitation Act 1980?
Limits the time period for legal action to be taken against debtors and for breaches of the law.
- Contract - 6 years from date of negligent act / 3 years from date of knowledge / 15 years long stop date.
- Tort – 6 years from the date the claimant suffered the loss.
82
What is Professional Indemnity Insurance?
- To **protect** clients, surveyors and third parties against **negligence claims** when their **duty of care is breached** and a claim for damages arises
- appropriate level of insurance is in place
- All policies must be **underwritten** by an RICS approved insurer, as found on the RICS website
- **Mandatory** for surveyors working in practice
83
What is the RICS compliance on closing a practice?
1. **Inform** the **RICS** of your closure and deregister
2. **Inform clients** and **hand over to a new firm**
3. **Return any monies** held by client to their own accounts
4. **Inform insurers** and procure PII run-off cover for a minimum of 6 years
5. **Retain** a copy if the **client files** and records for a **minimum of 6 years.**
84
What is the RICS guidance on Professional Indemnity Insurance?
RICS Regulation: RICS Professional Indemnity Insurance Requirements 2022
85
What does RICS Professional Indemnity Insurance Requirements April 2022 state?
- An **appropriate** level of insurance is in place for each instruction
- Consideration on potential **liabilities** which may exist
- All policies must be **underwritten by an RICS approved insurer**, as found on the RICS website
86
Minimum requirements of PII based on turnover include
87
maximum level of uninsured excess required by RICS is:
88
What needs to be considered when basing requirements of PII cover?
- Their likely risk profile to negligence claims when deciding on their levels of insurance needed
- If it is a **new business**, **estimate the turnover** and adjust accordingly
89
What else should you know about PII cover?
- The PII certificate to be **sent to the RICS on an annual basis**
- **Early notification** to firm’s **insurers** is required when a potential **claim arises**
90
What is Run-off cover following cessation of trading?
* protects businesses and individuals from claims made **after they have stopped trading**
* A **minimum of £1m** of aggregate cover over period of 6 years
* Most firms aim to cap their liability with clients for individual instructions
91
What is the guidance on Liability caps?
RICS **Practice Information** – Risk, Liability, and Insurance 2021
92
What does the guidance on liability caps state?
* Use of **liability caps** to **manage risks** associated with professional work
- Be aware of third-party **reliance**
- Ensure that only those **stated** in the **report** can **rely upon the information**
93
What is the guidance on handling clients money?
RICS Professional Standard: Client Money Handling, 2019
94
What are the SIX areas of 'Client Money Handling, 2019'
1. **Holding** client money
2. Providing **information** to **clients**
3. **Receipt** of **client money**
4. **Payments** of **client accounts**
5. **Accounting records** sand controls
6. **Compliance**
95
What procedure do chartered surveyors need to be aware of when handling clients money?
- **Keep accounts separate** / identifiable (use word “**client**”).
- Client must have **monies on demand**.
- Money only to be **withdrawn** if p**roperly required**.
- Keep **accurate records**.
96
What is the RICS compliance when setting up a new practise? (NINE)
1. **Inform** RICS
2. Appoint ‘**Responsible Principal**’ for all communication
3. Register with **RICS regulatory board**.
4. **PII** and **CHP** details to RICS.
5. **Procedures** for **client money handling**.
6. Complaints Handling Officer and log.
7. Comply with use of **RICS logo**.
8. **Succession plan**.
9. **CPD logged** and RICS annual return completed.
97
What is the key legislation on gifts and bribery?
Bribery Act 2010 -
* Aims to reduce bribery in business in UK and abroad
98
What is hospitality?
* Hospitality which seeks to **genuinely** promote and **improve the image of a firm** is an **acceptable**
* key part of doing business
* and **registered**, if required, by the **Firm** in accordance with their **anti-bribery procedures**
99
What is CBRE’s gift policy?
- All gifts must be reported on **Gifts and Hospitality Declaration Form**.
- As a general rule, employees can give/accept gifts or events tickets up to the value of **£100** per person.
- The gifts **cannot be cash**, cannot be in a manner that can influence a decision (e.g. if we are pitching for business).
- If **unsure**, you must consult the **Compliance Director** before accepting or making offers.
- CBRE Compliance Director is Geraldine Mash.
- Excessive gifts can be seen a conflict of interest, or bribe.
100
What considerations did you have when offered a gift?
* Is gift **prohibited by law**?
* Could it be interpreted as a **bribe**?
* Could it **influence business decision**?
* How would it be perceived if **publicly disclosed**?
101
What is a bribe?
- The giving or receiving of an advantage such as a payment, gift or a service for an action which is **illegal** or a **breach of trust**
- Certain forms of **lavish corporate entertainment** can be classed as bribery.
102
What is accepted in terms of gifts/hospoitality?
- Government guidance states that **hospitality is not prohibited** by the Act.
- It states that offering a client **reasonable** and **proportionate** hospitality will not constitute an offence
- such as a ticket to a major sporting event and taking clients for meals as long as this is accurately recorded in a gift hospitality register.
103
What are the SIX principles of the Bribery Act 2010?
1. Proportionality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review
104
Can you expand on any of the principles of the bribery act?
**Top-level commitment**
Top-level management should be committed to preventing bribery
**Risk assessment**
Organizations should assess the risks of bribery from both internal and external sources
**Due diligence**
Organizations should apply due diligence procedures to individuals who work for them, taking into account the risks involved
**Communication**
Organizations should ensure that their bribery prevention policies and procedures are understood by everyone in the organization
**Monitoring and review**
Organizations should monitor and review their bribery prevention procedures and make improvements where necessary
105
What are the FOUR offences relating to bribery?
1. Bribing
2. Receiving a bribe
3. Bribing a **foreign public official**
4. **Failing** to **prevent a bribery**
106
What are the penalties of bribes?
- If this Act is breached, there is a maximum penalty of 1**0 years imprisonment** and/or an **unlimited fine** for individuals; companies face an unlimited fine
- The Bribery Act is policed by the **Serious Fraud Office**
107
Are companies responsible for employees corrupt acts?
* Yes.
* Unless the company can show they had adequate policies/procedures in place to combat bribery.
108
What is the RICS Guidance on money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds **Regulations 2017**
109
What are the key provisions of the regulation within the **Money Laundering, Terrorist financing and Transfer of Funds Regulations, 2017**? (UK LAW)
1. Need a **written** money laundering and terrorist financing **risk assessment**
2. Implement **systems** to **address** money laundering
3. Adopt appropriate **internal** controls
4. 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
8. **AML** checks to confirm the identity of the proposed purchaser and check the purchaser’s source of funds
9. To include additional high-risk factors when assessing the need for enhanced due diligence and seek additional information and monitoring in certain cases eg when there are transactions between parties based in high-risk third countries
110
What is money laundering?
Proceeds of criminal activities are disguised or converted and then realised as legitimate assets
111
What are the two types of due diligence?
Customer DD
Enhanced DD
112
What is customer DD?
- **Identify** the client and **verify** their identify
- Obtain information on the **purpose** and **intended** nature of the business relationship
- Proposed **funding arrangements** as appropriate
113
What are the different levels of DD needed for?
Money laundering caution
114
What is enhanced DD?
- More **detailed** examination of the background and **purpose** of the **transaction** and increased **monitoring**
- Additional procedures for a **‘high risk third country’** or a ‘politically exposed person **(PEP)** or a PEP family member/business associate
- A PEP is a term describing someone who has been entrusted with a prominent public function
- A PEP generally **presents a higher risk for potential involvement in bribery and corruption** by virtue of their position and the influence that they may hold.
115
what are the penalties of money laundering?
If failure to comply with regulations?
* Maximum sentence of **14 years** and/or unlimited fine for **doing**.
* Maximum sentence of **5 years** and/or unlimited fine for **assisting**.
116
What are typical money laundering checks?
* Public Ltd Company – London Stock Exchange Listing
* Publicly Accountable Body – Government Ownership Control
* Private Limited Company – Certificate of Incorp. Full Name and ID.
* Private Individual – Passport driving licence/bank statement/3 months.
117
What are some red flags to consider with regard to money laundering?
1. Unwillingness of parties to provide **identity documents**
2. **Changes** to **parties involved** in transactions
3. Unusual transaction features, such as urgency required by parties, p
4. Unusual currencies
118
UK Government Sanctions
Anti-money laundering sanctions update March 2022
* Consider risks to AML policy, e.g., sanction lists contain UK citizens.
* Use software as part of DD if a firm is more likely to engage with high-risk clients or assets.
* HM Treasury’s ‘consolidated list’, MLRO will have access.
* Office of Financial Sanctions Implementation (OFSI) for assistance.
119
What three main areas are stated as an offence in the **Proceeds of Crime Act 2022**?
3 main areas of offence:
1. **Concealing** criminal property;
2. **Arrangements**; - facilitates criminal property for a person
3. **Acquisition use** and **possession of criminal property**
120
What is the guidance on bribery and money laundering?
RICS Professional Statement: Countering bribery, corruption, money laundering and terrorist financing 2019
121
What does RICS Professional Standard: **Countering bribery, corruption, money laundering and terrorist financing 2019** state?
It is divided into 3 parts:
1. **Mandatory requirements** for anti-bribery, corruption, anti-money laundering and terrorism
2. **Guidance** setting out supporting **good practise** for the above
3. **Supplementary guidance** on some of the concepts set out in parts 1 and 2
122
What is the regulation on bribery and corruption?
RICS Professional Standard: **Countering bribery, corruption, money laundering and terrorist financing 2019**
This sets out the mandatory requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing
123
What does Part 1 - **Bribery** and **Corruption** state?
RICS firms must:
- **Report suspicion**
- Not **offer** or **accept** anything that could **constitute a bribe**
- Have **procedures** in place to **comply** with the law
- Act with **due diligence** to **review risks**
- Retain records to show that the firm has met the requirements of this Professional Statement
124
What does Part 1 - Money Laundering and terrorist financing state?
RICS firms must:
- Not **facilitate** or be complicit in ML and TF
- Take **appropriate measures** to understand the **client** and the **purpose** of the instruction
- Have **systems** in place to comply with the laws
- **Report suspicion**
- **Evaluate** and review the risks
- **Verify the client** by undertaking basic ID checks
125
What does Part 2 state? (Countering bribery...)
Practical guidance provided such as
- Written **policy** in place
- Setup a **gifts register**
- Encourage transparency
- Keep up to date with the **legislation**
126
What does Part 3 state? (Countering bribery...)
Provided on a range of issues including:
1. Establishing a ‘risk-based approach’:
2. WHO you act for
3. WHAT you are doing
4. WHY you are being asked to do something
- Dealing with politically exposed persons (PEPs): they are higher risk as they hold positions of influence and enhanced due diligence is required
The need to identify the beneficial ownership of a company, partnership or trust – such as by requesting a recent Certificate of Incorporation or Annual Return for a company
127
What is the purpose of professional indemnity insurance?
- To protect clients and yourself when a duty of care is breached
- when claims for damages arise
128
How long should you store valuation files for? Why?
129
What is the purpose of ToE?
- provide clarity with client
- protection in terms of PII
- helps to ensure good level of service is met
130
What would you do if you carried out a large loan security valuation and the customer sent you a case of Champagne?
- Under CBRE RISE values of ‘Integrity’, there is guidance on gifts.
- Excessive gifts can be seen a conflict of interest, or bribe.
- All gifts must be reported on Gifts and Hospitality Declaration Form.
- As a general rule, employees can give/accept gifts or events tickets up to the value of £100 per person.
131
If unsure about a gift what would you do?
- If unsure, you must consult the Compliance Director before accepting or making offers. CBRE Compliance Director is Geraldine Mash.
132
What questions would you ask yourself regarding gifts?
Is gift prohibited by law?
Could it be interpreted as a bribe?
Could it influence business decision?
How would it be perceived if publicly disclosed?
133
How do you carry out AML checks? Why is this important?
134
What is the difference between ToE and ToB?
Terms of business are the general **terms** and **conditions** for a **company's operations**,
while **terms of engagement** are the **conditions** for a specific **engagement**
135
What might you find in terms of business?
- Payment of fees
- Liability
- Money Laundering and sanction regulations
- Charges and expenses
136
What is the importance of the RICS Rules of Conduct?
Promotes the highest ethical standards
- They are based on ethical principles of:
Honesty and Integrity
Competence
Service
Respect
Responsibility
Apply to both members and firms
137
Why were the Rules of Conduct updated?
- To respond to new risks and challenges.
- To provide one clear framework – simpler structure to provide confidence for clients and the public.
- Clear examples alongside each rule.
- Focus on respect, diversity and inclusion.
- Evolving technology.
- Tackling global challenges such as sustainable development.
138
What are the implications of contravening?
Caution
Fine
Expulsion (taking bribes)
139
What is the guidance on Rules of Conduct?
RICS Rules of Conduct 2021
140
Rule 3
Members and firms must provide good-quality and diligent service.
141
What is your company's PII?
Confidential
142
What is the RICS Complaints Handling pricedure?
Respond within 7 days
Investigate within 28 days
143
For loan security purposes who do you run a conflict of interest check on?
Lender and borrower
144
For loan security purposes who do you run a conflict of interest check on?
Lender and borrower
145
Conflict check on client?
146
Have you ever signed an NDA?
No
Company policy only E.D's can
147
Have you ever signed an NDA?
No
Company policy only E.D's can
148
How did you meet clients expectations? Valuation Example
Rule 4&5?
Rule 4 – Respect
- Respect the client’s expectations and I responded to their queries in a timely manner.
Rule 5 – responsibility
- Acted responsibly by undertaking a thorough due diligence process, as this could materially impact value.
- I ensured that these were peer reviewed by my supervisor.
149
How did you meet clients expectations? Valuation Example
Rule 3?
Rule 3 – Service
- **Met the scope of works** within ToE
- Kept to **timeframes**
- Constant **communication**
- I made my client aware that I was a trainee working alongside a RICS Registered Valuer who would oversee the valuation.
150
How did you meet clients expectations? Valuation Example
Rule 1 & 2?
Rule 1 – Honesty
- Ensure no conflicts before taking on an instruction
Rule 2 – Competent
- Ensure SUK
- Thoroughly reviewed work by directors to ensure highest quality
151
What things does the ethics decision tree consider?
- Facts
- Is it legal?
- In line with Rules of Conduct?
- Clear reasoning?
- Informed Decision?
- Content if actions made public?
If all Yes = ACT
If No = Decline
152
What is the ethics decision tree?
1. Providing a decision-making framework to deal with ethical dilemmas.
2. Framework of questions for members to ask themselves when facing a situation.
3. **Encourages consistency** with the **Rules of Conduct.**
153
What is CBRE's CHP?
1. Receive the complaint
2. 5 days to acknowledge and respond with the case officer.
3. 20 days to investigate and respond with a final management decision letter.
4. If the client is unhappy the client may take the complaint to an external complaint handling.
5. **CBRE recommend Property Redress Scheme** or the **Centre for Effective Dispute Resolution**.
154
What must a firm have with regard to CHP?
1. CHP in place
2. Redress system
3. Complaints Handling Officer
4. Complaints Handling Log
155
What is Stage 2 of CHP?
Alternative Dispute Resolution Service
- If unresolved, an appropriate redress mechanism must be provided such as the Property Redress Scheme and the RICS Dispute Resolution Service.
156
What are CBRE's timescales?
Acknowledged within 5 days
Investigated within 20 days
157
What is Stage 1 of the process?
Stage One (in-House)
1. **Details of CHP** should be **issued** when the firm receives a complaint from a valid complainant to whom the firm owes a duty of care.
2. **Procedure** must be quick, clear, transparent and impartial.
3. Details of **Complaints Handling Officer** must be stated
4. Complaints must be made in **writing**.
5. **Timescales** of the complaint must be **recorded**
158
Describe a Complaints Handling Procedure
1. Needs to be **approved** by RICS
2. **Notify PII** insurers if claim as it could lead to a claim for negligence
3. Must be **issued** at same time as **Terms of Business**
4. Tracked in a **complains log** (Details, Progress and Outcome)
5. Must include an approved Alternative Dispute Resolution **(ADR)** mechanism
159
What is the guidance on Complaints Handling?
RICS Professional Standard ‘Complaints Handling’ (2016)
160
Salient points of Risk, Liability and Insurance?
- Recommends the **use** of liability caps to **manage risks** associated with **professional work**.
161
What is the guidance on liability caps?
RICS Guidance Note on ‘Risk, Liability and Insurance’ (April 2021)
162
What is Run off cover?
Cover following the cessation of trading
Min. £1m of aggregate cover
Over 6 year (RICS run-off pool)
163
What is the guidance on PII?
RICS Regulation ‘Professional Indemnity Insurance Requirements’ (Feb 2022)
164
What is Professional Indemnity Insurance?
Protects against negligence claims when duty of care is breached
And claims for damages arise
165
Example of how you adhered to Rule 5?
Risk assessment
Ensuring correct PPE
Complying with regulations
Responding to complaints in a timely manner
166
Example of how you adhered to Rule 4?
Working cooperatively with others
Attending DE and I initiatives – not discriminating
167
How did adhering to the RICS Rules of Conduct help you to meet clients expectations?
- I was competent to undertake the work
- Agreed ToE with clear time frames
- Work was completed on time
- Clear communication
- Complied with regulations
168
Example of how you adhered to Rule 3?
- Agree scope of work through ToE and keeping to them
- Working to timeframes
- Clear communication with client
- Measure client's satisfaction through achieving KPIs, review against objectives and clear communication
169
Example of how you adhered to Rule 1?
- Identifying conflicts of interest and managing it
- Not allowing myself to be bribed or influenced by gifts
170
Why were the Rules of Conduct updated?
- To respond to new risks and challenges.
- To provide one clear framework – simpler structure to provide confidence for clients and the public.
- Clear examples alongside each rule.
- Focus on respect, diversity and inclusion.
- Evolving technology.
- Tackling global challenges such as sustainable development.
171
How do you treat others with respect?
1. Value everyone's contributions
2. Practice **active listening**
3. Use **inclusive language** ie gender neutral language.
4. Be mindful of your **tone**: Communicate with a respectful and professional tone.
5. Address conflicts constructively
6. Promote **diversity** and **inclusion**
172
How do you promote diversity and inclusion in the work place?
1. **Act like a role model**
Demonstrating inclusive behaviours and hold other accountable
**2. Training**
Unconscious bias and inclusive communication
**3. Celebrate diversity**
Participate in cultural festivities or attend neuro-diversity sessions
**4. Challenge stereotypes**
173
What does an inclusive/diverse workplace look like?
Workplace where everyone feels respected, regardless of their background, gender, race, religion, or sexual orientation.
174
How are you adhering to the Rules of Conduct through 'Subject to Contract'?
**Rule 3**
- High level of service to my client and protecting their interests
-It allows me to conduct **due diligence** and ensure that all the terms of the deal are satisfactory before **committing** to a legally binding agreement.
**Rule 5- responsibility **
Acting responsibly to **protect my client's position** for example when rent reviews
It promotes **transparency** in real estate transactions
This can help to avoid **misunderstandings** and disputes later on.
175
What does 'without prejudice mean'?
During negotiations, the opposing party cannot rely upon any documentation which are labelled ‘Without Prejudice’...
...where representations made in litigation to a judicial body.
The information is therefore ‘**privileged**’
176
How are you adhering to the Rules of Conduct through 'Subject to Contract'?
**Rule 1 – Honesty**
Promotes open and **honest communication** between parties
**Rule 3 – Service**
- Protects my clients interests
-It allows me to conduct due diligence and ensure that all the terms of the deal are satisfactory before committing to a legally binding agreement.
**Rule 5- responsibility**
Acting responsibly to protect my client's position for example when rent reviews
**Transparency and clarity **
This can help to avoid misunderstandings and disputes later on.
177
What is your level 2 example?
Valuation of PBSA Scheme (Market Square House)
178
How did you determine there was no conflict?
- Checked on our internal system
- No conflict
179
When would you consider conflict management?
If it can be properly managed maintaining **TRANSPARENCY** and **OPENNESS**.
180
What THREE things must be included in a ToE?
1. Clients' agreement to fee basis
2. Payment of expenses
3. Copy of firms CHP
181
What 3 steps should be followed before starting an instruction?
1. Check professionally competent.
2. No conflicts of interest or personal interest
3. Confirm ToE and get written approval from client, BEFORE working on instruction.
182
What was included in your ToE? (Example)
1. Scope of works
2. The property
3. Valuers
4. CoI
5. Status of the valuer
6. Purpose and basis of valuation
7. Valuation date and timescales
8. ESG and sustainability
9. Reliance
10. Liability agreement (lower of 24% of value or £20,000,000)
11. Fees
12. Valuation standard terms of business
183
Why did you maintain strict confientiality?
The **RICS bye-laws** state that ‘client **confidentiality** must be **maintained** for all client affairs’
**RoC** - Rule 3, 4 & 5
184
What is the difference between ToE and ToB?
Terms of business are a set of standard terms that apply to all engagements, while terms of engagement are a document that outlines the terms and conditions of a specific engagement
185
How did you maintain strict confidentiality with the Gas Lane example?
* Confidential documents were clearly classified
* Strong passwords, and firewalls for confidential data
* Limited access to those only involved in the valuation
186
Why is transactional data confidential?
1. Ensures they have a **competitive advantage**
2. **Proprietary Information**
Pricing models and strategies often involve proprietary information, such as cost structures, profit margins, and pricing algorithms.
3. **Negotiating leverage**
187
In the Gas Lane example how did you ensure everything remained classified?
1. Password protected files
2. Secure networks – VPN
3. Titled confidential
4. Limited access to files
5. Did not discuss to anyone not involved
188
How was your example at Gas Lane in line with RoC?
Rule 3 – Service
I provided a quality of service to my client by keeping their information confidential
Rule 4 – Respect
I respected the confidential nature of my clients transactional data
189
Quarterly Accounts Valuation of PBSA, Dublin
Montrose (Yield pressure)
190
How did you act ethically in the Dublin example?
1. I did not secome to the **pressure** of my client
2. I acted with **integrity**, **objectivity** and **independence**.
191
How did you act in line with RoC for Dublin?
Rule 1 – **Honesty and Integrity**
I acted honestly and with integrity and adhered to my **professional obligations** as an RICS surveyor
Rule 3 – **Service**
I provided good quality service showing **true valuations**
Rule 5 – **Responsibility**
I acted responsibly without **bribe**, ensuring I maintained public **confidence** in the **profession**
192
What other guidance were you following for Dublin example?
Red Book Global
PS 2 Ethics, competency, objectivity and disclosures
States:
‘must always act in a professional and ethical manner free from any undue influence, bias or conflict of interest.’
193
What is PS2 of RICS Valuation - Global Standards ('Red Book') (2022)
Ethics, competency, objectivity and disclosures
194
Co-living Valuation, Battersea
Folk - (Conflict management)
195
How did you do a Conflict of Interest check?
1. Internal system dating back at least 10 years
2. Property address highlighted that it had been valued for another client
196
What type of conflict was Folk?
Party conflict
197
How did you determine there was no conflict? (Folk)
1. CBRE had previously valued the site for accounting purposes
2. We do not consider it a CoI because...
- It was for a different purpose
- Different personnel working on the instruction
We informed both parties who confirmed in writing they were happy for us to proceed
198
What is an information barrier?
A safeguard designed to prevent the flow of confidential information between different departments or individuals within an organization.
199
How did you incorporate an information barrier?
1. **Robust** enough to ensure no information passing
2. **‘reasonable steps’** to operate an effective barrier
3. **Physical separation** - different buildings or different floor
4. **Virtual IT** barrier
5. Clear **audit trail** of conflict check process and all communication
200
201
What 9 key provisions are included in the Terrorist Financing Regulation?
1. Have a written money laundering and terrorist financing **risk assessment.**
2. Implement **systems** and **policies** to address money laundering and terrorist financing risks.
3. Adopt **internal controls**
4. Provide staff **training**
5. Customer and enhnaced DD
7. Ensure **record keeping**, policies and procedures.
8. AML checks must be undertaken to confirm identity of proposed purchaser and check source of funds.
9. Include high-risk factors when assessing need for enhanced due diligence e.g. when transactions are based in high-risk third countries.
202
What can firms do to prevent money laundering?
* Have group-wide procedures and training on prevent money laundering and terrorist financing risks.
203
What are typical money laundering checks?
* **Public Ltd Company** – London Stock Exchange Listing
* Publicly Accountable Body – Government Ownership Control
* **Private Limited Company** – **Certificate of Incorp**. **Full Name** and **ID**.
* Private Individual – Passport driving licence/bank statement/3 months.
204
What Regulation concerns Money Laundering?
- **Terrorist Financing and Transfer of Funds** (Information on the Payer) Regulations, 2017 (as amended in 2022).
- UK has recently implemented 6th EU Anti Money Laundering Directive into the Regulations.
205
What is the RICS Guidance on money laundering?
Terrorist Financing and Transfer of Funds Regulations 2017
206
What is a responsible principal?
A Responsible Principal (RP) is a person within a regulated firm who ensures that the Royal Institution of Chartered Surveyors (RICS) professional, technical, and ethical standards are upheld.
207
why is diversity key?
prevents group think
208
In the Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 (as amended in 2022), what is the limit of cash acceptance?
10,000 euros
209
If asked about an AML check what would you consider?
- Money laundering, terrorist financing and transfer of funds regulation 2017
- RICS professional standard - law comes first
- Due diligence procedures
- Professional objectivity, openness and transparency
- 'Red Flags'
210
If asked about bribery and hospitality, consider:
- Bribery Act 2010
- RICS professional standard
- companies procedures
- Proportionality
211
Whos responsibility is it to take out run off cover?
- Taken out for the firm
- Individual surveyor to ensure that they are covered
212
How did you manage the conflict?
Served a conflict of interest letter which stated
- who the parties were
- nature of the conflict
- methods in place to manage the conflict
213
What are Estate Agents legal obligations with regard to money laundering?
Guidance: 'Estate agency business guidance for money laundering supervision
Firms must have policies to identify and scrutinize transactions which are:
- complex or very large
- unusual patterns of transactions
- without apparent economic or legal purpose
214
Other points of note with regard to money laundering?
- limit of 10,000 euros cash
- detailed record keeping
- senior staff must be appointed to take responsibility
- a firm must contain records of min. 5 years
Nominated person (Money Laundering Reporting Officer) must be appointed to report any suspicions to National Crime Agency
