Ethics L3 Flashcards
(105 cards)
1
Q
Why do we need the RICS rules of conduct/importance?
A
- Knowing Chartered Surveyors have to follow these rules, gives client and the public comfort - they know that we would face disciplinary action if we failed to meet these rules
- Act as anchor to appropriate behaviours
- Ensure consistency and clarity irrespective of changing factors (state of economy, different markets etc)
2
Q
What were the changes to RICS Rules of Conduct and when did they come into force?
A
2nd Feb 2022
- Provide a simpler structure
- Give clear examples
- Focus on respect, diversity and inclusion
- Responding to and understanding evolving technology
- Emphasize the role of members expertise in tackling global challenges
3
Q
What are the Rules of Conduct?
A
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
- Members and firms must provide good-quality and diligent service.
- Members and firms must treat others with respect and encourage diversity and inclusion.
- Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
4
Q
Example of honesty, integrity and professional obligations
A
- Don’t accept bribes where it might skew your opinion on something
- Identify conflicts of interest even if it costs your firm (if you can’t take on an instruction as a result). Might have database where you can check this
5
Q
Example of maintaining and acting within competence
A
Always state ‘i checked to ensure i was competent’ in APC interview
Onus is on employee and the business as a whole
1. Must ensure sub-contractors are also competent (FoH, security, cleaners etc)
2. Undertake CPD and ensure you are complying with requirements set by RICS
6
Q
Example of providing good quality service
A
AML requirements - if looking to act for new client, need to request information to show you’re not money laundering (part of RICS and HMRC regulations - legally required)
All information must be requested from the start
Used to be incentives offered to acquiring agents for putting their clients into the office even if they weren’t directly instructed - the people would get rewards and so not have client best interest (would go for option where the incentive lay rather than option that met clients brief but had no incentive)
1. Ensure AML checks are carried out before taking on a new client
2. Be transparent with fee from start
7
Q
Example of respect and encouraging diversity and inclusion
A
- I always respect the rights of others and treat people with courtesy
- Some new starters joined our team so I welcomed them and tried to include them.
8
Q
Example of public interest, responsibility and public confidence
A
- Respond to complaints made promptly and professionally
- Complaints handling procedure must include 3rd party dispute resolution options available (incase client is not satisfied with service provided by firm members)
9
Q
What are the mandatory professional obligations for RICS members?
A
- Members must comply with the CPD requirements set by RICS.
- Members must cooperate with RICS.
- Members must promptly provide all information reasonably requested by the Standards and
Regulation Board, or those exercising delegated authority on its behalf.
10
Q
What are the mandatory obligations for RICS-regulated firms?
A
- Firms must publish a complaints-handling procedure, which includes an alternative dispute
resolution provider approved by RICS, and maintain a complaints log. - Firms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity cover that meets the standards approved by RICS. - Firms with a sole principal must make appropriate arrangements for their professional work to
continue in the event of their incapacity, death, absence from or inability to work. - Firms must cooperate with RICS.
- Firms must promptly provide all information reasonably requested by the Standards and
Regulation Board, or those exercising delegated authority on its behalf. - Firms must display on their business literature, in accordance with RICS’ published policy on
designations, a designation to denote that they are regulated by RICS. - Firms must report to RICS any matter that they are required to report under the Rules for the
Registration of Firms.
11
Q
What is professional indemnity insurance?
A
protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided or negligent advice you offered
12
Q
What is the minimum level of indemnity?
A
Turnover £100K or less = 250K
Turnover £100,001 to £200K = £500k
Turnover £200,001+ = 1mil
13
Q
What is the maximum level of uninsured excess?
A
Limit of indemnity up to + inc £500K = max uninsured excess at the greater of 2.5% of the sum insured or £10K
Over £500K = 2.5% of the sum insured
14
Q
What is run-off cover?
A
- the insurance cover that is required after a member ceases to practice (eg they leave)
- Could go through whole career with minimum level of cover required, then increase it, and then get sued for something that happened 6 years ago
- Must have run-off cover for at least 6 years, but 15 years recommended
- If not been sued within 15 years then unlikely to be held up in court of law
- If firm is merged, dissolved, etc then partners etc must have run off cover for a future 6 years
15
Q
What does RICS require in a complaints handling procedure?
A
- Every firm must have this in place
- Will be company specific, there is not a standard template
- Must maintain a complaints log
1.In the event of a complaint, please address Complaints Handling Officer
2. Will come back to you within 7 days
3. Claim will be dealt with in 28 days
4. If complaint cannot be resolved, then can go to 3rd party EG Ombudsman services
16
Q
What is the Workman Complaints Handling Procedure?
A
- Aim to resolve complaint with a Workman member of staff
- If not possible, then write to head office (address provided) and address letter to Group Company Secretary
- Set out nature and details of complaint
- Will be contacted within 7 days to confirm receipt and allocated person dealing with complaint, and will provide with final response if possible
- Will be in contact again within 28 days to provide
- Final response, or
- Progress update and expected timeline to receive final response (will be no more than 8 weeks since receipt of initial complaint)
- If dissatisfied with complaint outcome, can contact Independent Property Redress Scheme (PRS) - details listed at bottom of complaint handling procedure letter
17
Q
How must firms handle clients money?
A
- Accounting systems must be securely controlled and protected
- Client accounts must be named and have word ‘client’ in name of account
- Client money should always be available on demand and should always be in credit, but there are circumstances where management agreements may different (Fine as long as agreed in PMA - EG for emergency funds)
18
Q
What are the RICS CPD requirements?
A
- Not the same sa CPD - difference is that the amount required is less specific (minimum of 20 hours, 10 formal and 10 informal)
- Much greater range for qualified surveyors
- Charity work
- Mock interview for APC candidates etc.
19
Q
Talk to me about the RICS disciplinary Panel.
A
- Number of different levels
- Starts with conduct committee - can issue fixed penalty notice or consent order (deal with minor breaches)
- Can issue caution if things are more serious - impose fine or expel
- Appeal panel - can go here if unhappy with disciplinary panel decision
20
Q
Talk to me about conflicts of interest with an example?
A
- May occur when advising seller and buyer simultaneously
- May have obligations/pressures which detract from your relationship with the client - can’t act as expert witness in court in situ where already involved (and court don’t know about it)
- Might be acting for two or more parties competing for an opportunity
Common one - might have one client selling to another one of your clients EG Threadneedle selling to Blackrock and you act for both - Conflict of interest can be managed here as it would be unreasonable to bring in another agent, as managing agents
- Would have to declare conflict of interest
- Would need consent from both parties
- Would need different offices (but same firm) to deal with management side of transaction (don’t want to be favouring one client over the other - needs to be transparent between all parties)
21
Q
What is Workman’s conflict of interest procedure?
A
- Search TRAMPS to see if property or portfolio already on there
- If not on there, then reasonable to assume firm had no previous involvement - can accept instruction
- If on there, then contact partner(s) of relevant properties
- Partner(s) will decide how to proceed
- If no conflict of interest, then can accept instruction
- If conflict of interest, partner(s) will refer matter to Advisory Board via Conflict of Interest Database
- Once Advisory Board receive this notification they will decide how to proceed
A) decline instruction
B) accept instruction on basis of ‘informed consent’
- If one or both clients express concern, firm declines new instruction
- If both clients agree, this is confirmed in writing and can accept instruction
- IT and Compliance Team may need to put Information Barriers in place on EFS to ensure correct procedures are followed
22
Q
How do you identify a conflict of interest?
A
Ask yourself whether your ability to act in the best interest of your client could be potentially impaired by:
- Financial interest EG you may gain more than your usual fee / lose money depending on the advice you give
- Personal relationship EG the relationship you have with a third party
- Commercial relationships EG obligations to another commercial entity affects your ability to provide objective advice to a client
- Interests of your firm EG financial interests of own firm conflict with interests of the client
- You believing that your impartiality could be compromised in any way
Should be open and transparent and inform all parties if there is a conflict of interest
Should offer to stand down if necessary
23
Q
Can you act for a family member?
A
Yes you can, as this would not be a conflict of interest
Can do this, even if there is a personal interest
The relevant facts must be disclosed to any perspective purchaser or lessee
24
Q
What is money laundering?
A
Money laundering = proceeds of criminal activity are realised as legitimate assets
25
What is the professional statement relating to money laundering and anti bribery?
Countering bribery, corruption, money laundering
and terrorist financing 1st Edition September 2019
26
Talk me through the contents of the Countering bribery, corruption, money laundering
and terrorist financing 1st Edition September 2019
Split into 3 parts
1. Mandatory requirements
2. Guidance
3. Supplementary guidance
- All illegal and unethical - more than one of the activities can take place in a single transaction
- Vigilance is key
- Procedures must be in place
27
Talk to me about anti-bribery
Cannot offer or accept anything that could constitute a bribe
Always depends on the circumstances - think about proportionality and use common sense
If the client wants to take you for lunch to say thanks for doing so well with the rent review, this is likely acceptable
Agency work - gifts sometimes offered to say thanks for attending this launch - usually acceptable as being offered to group of people, not just you
If during tender process, you receive tickets from one of the contractors to go to an event - this would be considered as a bribe
28
What are the red flag indicators of money laundering?
- EG if dealing with new client
- Criminal associations
- Not directing transaction
- Disguising who real client is
- Should follow red flags up with further investigation
- May need to refuse to take on the instruction
29
What are the steps when setting up a new practice?
1. Inform RICS and register for regulation
2. Professional indemnity insurance
3. Appoint complaints handling officer
4. Set up appropriate procedures if handing clients money
5. Compliance with statute IE Equality health and safety, money laundering act etc.
6. RICS designation
30
Talk to me about gifts and hospitality
Openness and transparency is important
What is value of gift/hospitality?
Who is it being given to? One person or range of people from different organisations?
Is it reasonable and proportionate?
Does gift or hospitality have genuine business purpose?
When is it being given? Out of the blue from a contractor who has just been asked to tender for a large contract?!
How easy is it to decline there and then? Harder it is, more likely it is to be a bribe
31
What did the Bribery Act 2010 do?
made it a criminal offence to give or receive a bribe
32
When was the RICS founded?
1868
33
What are the 4 levels of membership?
FRICS
MRICS
AssocRICS
Trainee/Student
34
Who are the president and CEO
President = Tina Paillet
CEO = Justin Young
35
Current challenges for the RICS
Climate change and sustainability
36
What is a recent initiative of the RICS
Using more technology in valuation
37
What is the role of the RICS?
RICS promotes and enforces highest professional qualifications and standards
3 main roles of the RICS
To maintain the highest standards of education and training
To protect consumers through strict regulation of professional standards
To be the leading source of information and independent advice on land, property, construction and associated environmental issues
Aim to deliver confidence and transparency
38
What was the Bichard review?
followed the Levitt Review
Released June 2022
Aim was to create new sense of purpose and direction
RICS now implementing all the Bichard Review recommendations
39
What are the benefits of being an RICS member?
Status - client confidence
Recognition -
Market advantage
Knowledge
Network
40
What are the benefits of regulation for firms?
Confidence - for clients, as regulated firms are monitored by RICS
Professionalism - firms have to provide clear advice
Security - firms must have complaints procedure, access to independent redress and PII cover
41
Talk to me about RICS firms?
Recognised quallity benchmark to all RICS firms
Provides 'gold standard' of quality control
Firms annually confirm compliance to RICS
Firms must have 'Responsible Principal' who ensures RICS compliance
Only RICS members and firms can use RICS logo
42
What information is required by the RICS for registration?
Type of business and staffing details
Statutory regulated activities EG financial services
Nature of clients
Complaints handling procedure
Professional indemnity insurance
Whether firm holds clients money
43
When did the new rules of conduct come into force and what did they set out to do?
Effective from 2nd February 2022
Simpler structure
Clearer examples
Focuses on respect, diversity and inclusion
Understanding evolving technology
Tackling global challenges
44
What are the 5 rules of conduct?
1. Honest, act with integrity, and comply with obligations (personal and to RICS)
2. Maintain professional competency and ensure services are provided by competent individuals with necessary expertise
3. Provide good-quality and diligent service
4. Treat others with respect, and encourage diversity and inclusion
5. Act in public interest, take responsibility for actions and act to prevent harm and maintain public confidence in profession
45
What are the RICS professional obligations to members?
Comply with CPD requirements
Cooperate with RICS
Provide information promptly to Standards and Regulation Board if requested
46
What are the RICS professional obligations to firms?
Provide complaints handling procedure
Ensure professional indemnity cover appropriate
If sole principal, ensure arrangements in place if they are unable to work EG ill or death
Cooperate with RICS
Provide information promptly to Standards and Regulation Board if requested
47
What is the ethics decision tree?
- Supporting information to back up the Rules
- Provides framework of questions that members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation
- Encourages consistency with Rules of Conduct
- RICS Regulation Confidential Hotline offers assistance to members with ethical issues
48
Talk to me about RICS disciplinary procedures
Not every shortcoming will give rise to disciplinary procedures
Member or firm may be asked to justify the steps they took
Disciplinary action may be triggered if someone complains to RICS
Three levels of disciplinary action:
1. Action by Head of Regulation
2. Disciplinary Panel decided by Regulatory Tribunal
3. Appeal Panel
49
What are the steps in a disciplinary procedure?
Initial investigation:
- Formal investigation by Head of Regulation of RICS
- Can initiate one of 4 actions once investigations complete:
- Serve fixed penalty notice
- Procure used for breaches of Rules
- Make Regulatory Compliance Order
- Procedure for minor breaches
- Compliance Order is written document that states terms upon which member/firm must take or desist from taking actions in a set time period
- CPD sanctions
- Place obligation on member to follow CPD requirement
Refer matter to Disciplinary Panel
- Procedure used for more serious breach
- 50% of panel are lay members (non RICS)
- Penalties available include:
- Issue Compliance Order
- Impose unlimited fine per breach (proportionate to the offence)
- Impost conditions upon future continued RICS registration
- Expulsion from membership or remove firms membership
- Publication of results of hearing in RICS modus magazine, on RICS website or in local newspaper where firm/member is based
Appeal Panel
- Considers appeal
- Reviews decision made
- Appeal Board can vary penalty previously imposed
- 50% of panel or lay members
50
Which social media posts will the RICS investigate?
Discrimination
Dishonesty
Abusive or threatening behaviour
Bullying or harassment
Concerning communications
(RICS may take disciplinary action to protect public or professional reputation)
51
Which social media posts will the RICS NOT investigate
Criticise an organisation, its policies/performance (rather than individual)
Use professional and respectful language
Are removed upon request
52
What does the RICS state about fee negotiations?
Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
Fees should be market-based and agreed on ad-hoc basis with cleints
Healthy competition is encouraged, but aggressive fee cutting is not allowed
Can negotiate further after submitting initial fee proposal as long as you act professionally
May vary proposed level of service when renegotiating initial fee proposal, but shuold still provide high standard of service
Do not be seen to undercut another firm
Be completely transparent and state whether you are receiving/offering a referral fee - state so in terms of engagement
Bare in mind RICS Rules of Conduct and Bribery Act 2010
53
What should be included in the terms of engagement?
Check professionally competent
Check for conflict of interest
Confirm terms of engagement in writing before starting to work on instruction
54
For what reason would you decline an instruction?
Not competent
Not sufficient facts
Client won't sign terms of engagement or complete AML checks
Conflict or personal interest
Professional Indemnity Insurance liability cap cannot be agreed
55
Name some examples of conflicts of interest.
Financial/personal interest
Commercial relationships
Acting on both sides of a transaction
56
What is the difference between conflict avoidance and conflict management?
Conflict avoidance = not accepting the instruction
Conflict management = instruction is accepted, but written agreements are put in place to manage the conflict
57
What is the professional statement on conflicts of interest and when did it come into force?
RICS - Global Professional Statement on Conflicts of Interest (2017)
Came into effect 1 Jan 2018
58
What are the main points in RICS - Global Professional Statement on Conflicts of Interest (2017)?
Must not represent client where there is conflict, unless provided prior informed consent
Can only request informed consent if proceeding is in everyone's best interest
59
What are the 3 types of conflict of interest?
Party Conflict - work on same/related instruction for x2 different parties
Own Interest Conflict - relates to personal interest
Confidential Information Conflict - relates to work between x2 parties that is confidential
60
What is informed consent?
Informed Consent = be completely transparent and obtain consent in writing. Only appropriate if in everyone's best interest
Firms must keep records to show compliance with Conflict of Interest statement
61
What are the steps involved in informed consent?
STEP ONE - CONFLICT AVOIDANCE (get full facts and decide whether to decline Client A or B)
STEP TWO - WRITTEN ADVICE TO BOTH PARTIES (disclose nature of conflict and how firm will deal with it, be clear and ensure parties to make own decision and seek independent advice, request written confirmation of informed consent stating to proceed in accordance with agreed proposed procedure)
STEP THREE - CONFLICT MANAGEMENT (set up information barrier in accordance with provisions agreed with clients)
62
Talk to me about information/ethical barriers
Ensure no chance of information passing between the two parties
Surveyors acting on the two sides must be different physically separated in different buildings (or on different floors)
All information on the client should be securely stored
Firm compliance officer must oversee and have record of full audit trail and communication
63
Name another conflict of interest guidance note.
RICS Conflicts of Interest - UK Commercial Property Market Investment Agency 2017
Also came into effect 1 Jan 2018
Sets out principles for identifying and managing conflicts in the UK
64
What is dual agency?
Dual Agency = agent has contractual agency relationship with both seller and buyer at same time
Must not undertake this from 1 Jan 2018
65
What are multiple introductions
Multiple Introductions = agent has contractual relationship with multiple buyers. Agent must confirm if acting on exclusive or non-exclusive basis and state this in terms of engagement.
Exclusive basis means other prospective buyers that agent was in contact with must be informed that the agent is no longer able to advise them
Non-exclusive basis means agent must obtain informed consent from client(s) and put in place information barriers
66
What is incremental advice?
Incremental Advice = agent approached by another party to provide advice on valuation, surveying or planning, relating to acquisition/disposal that is incremental to existing instruction
Only provide advice if consent obtained and information barrier in place
67
What is a personal interest / own interest conflict?
Personal Interest/Own Interest Conflict - acting for a 'connected person' EG family member or colleague
Cannot let personal interest interfere with professional judgement, must be transparent
Declare facts promptly and in writing before accepting instruction
68
What are the RICS rules on confidentiality?
RICS Bye Laws state 'client confidentiality must be maintained for all client affairs'
Includes historic information, and information provided by client prior to instruction
Must get client approval before giving information to 3rd party, unless 3rd party is HMRC investigation or police
Old files must be held for minimum of 6 years before being securely disposed of and destroyed
Confidential information received in error should be noted to firm compliance officer
Notify sender of error
Dispose of information securely
69
What is the RICS publication on complaints handling?
RICS Guidance Note on Complaints Handling 2016
Firm complaints handling procedures must be approved by RICS
Must include RICS approved Alternative Dispute Resolution mechanism
Notify PII insurers if there is a complaint as it could lead to claim for negligence
CHP should be issued to client at same time as Terms of Business
Complaints handling log must be maintained - show detail, progress and outcome
70
How should a complaint be handled according to the RICS?
STAGE 1
Issue details of CHP
Procedure must be quick, clear and transparent
Details of Complaints Handling Officer must be stated as person to contact in first instance
Complaint must be made in writing
Complaint must be acknowledged in 7 days and investigated within 28 days - strict timescales
STAGE 2
If complainant not happy with review, then use independent redress scheme that firm has chosen
EG Centre for Dispute Resolution (CEDR), Property Redress Scheme or RICS Dispute Resolution Service
RICS get involved if member does not respond or prevents complainant accessing redress scheme
For Sole Practitioner, a surveyor from another firm must act as complaints handling officer
71
What are the RICS CPD requirements?
20 hours per annum minimum
At least 10 to be formal
Formal = online training, seminars, courses etc
Informal = self-managed learning
Check decision tree to decide if formal or informal
Record CPD on RICS website
Maintain understanding of Rules of Conduct
72
What is professional indemnity insurance?
Mandatory for surveyors working in practice
It protects clients, surveyors and third parties against negligence claims when there is duty of claim breached and a claim for damages arises
73
What is the RICS guidance note on insurance?
RICS Risk, Liability and Insurance - UK Guidance Note 2021
From 1st May, insurers must provide cover for fire safety claims on property with 4 storeys or less
RICS recommends use of liability caps
Third-party reliance - only the client listed in terms of engagement can rely upon advice
74
What are the RICS PII requirements?
Ensure adequate and appropriate level of insurance is in place for each instruction
All policies must be underwritten by RICS approved insurer
Minimum requirements based on turnover of firm:
If new business, estimate turnover and can adjust in due course accordingly
Policy should be fully retroactive
PII policies are on a 'claims made' basis - covers claims that are first made against the insured during the period of insurance, regardless of when the negligent act occured
Certificate of PII to be sent to RICS on annual basis with firms annual return to RICS
Still need 'adequate and appropriate' run off cover when ceased trading
Need minimum aggregate cover of £1,000,000 over minimum of 6 years for CONSUMER claims
For COMMERCIAL claims, must consider what is adequate and appropriate for minimum of 6 years
RICS recommends longer cover as claims can be made up to 15 years after work is undertaken
If firm unable to get run-off cover from incumbent insurer or open market, then need to apply for coverage from RICS Run-off Pool
PII cover also needed for 'pro-bono' work (unpaid work for charities/friends)
75
What is the RICS Assigned Risk Pool?
for members who cannot arrange cover
76
What is the RICS Low Earners Scheme?
for retired/part time members
77
What is the RICS Members Support Service?
service for members facing claims for work carried out by employer who has gone into administration
78
What is a consequence of negligence?
If breach, by not using 'reasonable care and skill', then there is a loss and a claim for damages arises
79
Which Act applies to negligence?
Limitation Act 1980:
Current limitation periods for negligence are
Contract - 6 years from date of negligent act or breach, or 3 years from the date of knowledge of the damage
Tort - 6 years from date the claimant suffered the loss
80
How do you avoid negligence?
Ensure you understand client objectives, and confirm terms of engagement in writing
Ensure you are competent to undertake instruction
Undertake work in accordance with RICS standards
Make detailed file notes and take photographs
Keep up to date with market knowledge/legislation and keep CPD updated
Cap the professional liability excess on your PII policy and note this in terms of engagement
81
What does the RICS rules of conduct state about handling client's money?
RICS Rules of Conduct - 'firms must keep client money safe and have appropriate accounting controls'
Deposits, rent, service charge
82
Which RICS statement relates to handling client's money?
Client Money Handling, 1st Ed 2019
Holding client money
Providing information to clients
Receipts of client money
Payments from client accounts
Accounting records and controls
Compliance
83
What are the procedures surveyors should be aware of when handling client money? (IMPORTANT)
Client accounts must be kept separately and clearly identifiable
Word 'client' must be on bank account
Client must be able to have their money on demand
Payment of interest agreed with client, and accounts must be kept in credit
Reconciliations must be completed regularly to ensure funds recieved get transferred to client account, and expenditure reports must be run monthly
Accurate records kept
Annual audit and reporting obligations met and certified by RICS accountant
Money can only be withdrawn from client account if properly required
If cash receipts made, records must show cash transactions
Only authorised staff can provide signatories, and x2 signatories should be required
Discrete account is for single named client account only
RICS regulatory review visits of inspection - occur every 3 years
Client money handling procedures must be documented on firm website
84
What is the RICS Clients' Money Protection Scheme?
For claims from clients which provides last resort protection in instances where RICS regulated firm cannot repay client money
Scheme is in x2 parts
Client Money Protection for Surveying Services - general client money protection, covering money held by firms undertaking surveying activities
Client Money Protection for Residential Agencies
85
What are the steps in starting a new practice? (IMPORTANT)
Inform RICS by completing Firm Detail Form
Appoint Responsible Principle for RICS communication
Register with RICS for regulation by Regulatory Board
Arrange Professional Indemnity Insurance and send details to RICS
Set up procedures for Client Money Handling, and a Protection Scheme
Register for RICS Valuer Registration Scheme if doing Red Book valuation work
Obtain RICS approval for Complaints Handling Procedure
Set up complaints log
Appoint Complaints Handling Officer
Use logo kit from RICS to comply with 'Regulated by RICS' designation
Plan for running of business in future
Ensure CPD logged online
Ensure completion of online RICS annual return at end of each year
86
What statutory compliance is required when setting up a new firm?
Disclose business name
Disability discrimination compliance - Equality Act 2010
Financial services compliance
Bribery Act 2010
Appoint Money Laundering Officer
Health and Safety compliance
Register for Data Protection
Inform HMRC for VAT and Tax registration
Insurance compliance for employer and public liability
Comply with current employment EG national living wage, working hours, pensions, gender pay gap reports etc
87
How do you close a practice?
Inform RICS of closure/retirement
Ensure clients are informed and hand over arrangements are made with new firm
Return monies held by clients to their own accounts
Inform insurers - ensure PII run off cover for at least 6 years
Retain copy of client files and records for at least 6 years
88
What legislation is linked to gifts, bribery and corruption?
Bribery Act 2010
Proceeds of Crime Act 2002
89
What did the bribery act set out to do?
Aims to reduce bribery in businesses in UK and abroad
make it a criminal offence
90
What are the 6 principles of the Bribery Act 2010? (IMPORTANT)
Proportionality
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review
91
What are the 4 offences under the Bribery Act 2010?
Bribing
Receiving a bribe
Bribing a foreign public official
Failing to prevent bribery
92
Are companies responsible for for an individual who bribes?
Companies are responsible for employees' corrupt acts unless they can show they have adequate procedures in place to combat bribery
93
Is hospitality classed as bribery?
Lavish corporate entertainment can be classified as bribery - reasonable and proportionate hospitality is not an offence as long as it is recorded in gift / hospitality register
Companies must prove they have taken steps to prevent bribery by identifying potential risks, training staff and providing clear policies which regularly get reviewed
94
What are the penalties under the Bribery Act 2010 and who polices it?
Bribery Act is policed by the Serious Fraud Office
Maximum penalty of 10 years imprisonment and unlimited fine for individual or company
95
Do you know the legislation relating to money laundering and what is the RICS statement?
Money Laundering, Terrorist Financing and Transfer of Funds Regulations - 2019
Amended in 2022 to take into consideration cryptoassets
Now called Money Laundering and Terrorist Financing 2022
RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing (2019)
96
What is money laundering?
Money Laundering = proceeds of criminal activities are disguised or converted and then realised as legitimate assets
97
What are the key provisions of money laundering legislation?
Need written money laundering and terrorist financing risk assessment
Need systems, policies and procedures to address issues and meet requirements
Need appropriate internal controls
Need staff training
Need to comply with due diligence requirements
Comply with requirements relating to politically exposed persons
Appropriate record keeping and procedures
AML checks must be undertaken to confirm identity of proposed purchaser of a property, and check purchaser's source of funds (before contracts are exchanged)
98
For money laundering, what must firms be able to identify in transactions?
Complex, unusually large, unusual patterns, or without legal purpose
99
What are the 3 parts of the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing (2019)?
Bribery and Corruption
Money Laundering and Terrorist Financing
Guidance
100
What is customer due diligence in money laundering?
For provide limited company, need:
Certification of Incorporation
Name, registered number, registered office, business address, directors names (unless company is listed on regulated market EG London Stock Exchange)
For individual:
Copy of passport or driving licence
Copy of bank statement, credit card bill etc showing evidence of address within last 3 months
101
What is enhanced due diligence in money laundering?
Additional procedures for transaction or business relationship that involves someone in 'high risk third country'
Politically Exposed Person may present higher risk for potential of bribery/corruption
Need to carry out additional due diligence on background and purpose of transaction
Also:
Firms must register with HMRC on annual basis
Limit of 10,000 Euros when accepting cash
Nominated Money Laundering Reporting Officer must be appointed to report any suspicious activity to National Crime Agency
102
What are the penalties of money laundering and most recent document?
Maximum 14 years in prison and/or fine for assisting with Money Laundering
Maximum 5 years in prison and/or fine for tipping off a person by informing them that they are a money laundering suspect, but not reporting the suspicion
Most recent document is 5th EU Anti Money Laundering Directive
103
What are the red flags associated with money laundering?
Inability or unwillingness to provide identity documents
Changes to parties involved in transactions
Unusual features EG unexpected urgency from parties or unusual transaction for a client
Payment of fees, purchase or rental money in unusual currencies
104
What is the proceeds of crime act 2002?
Provides powers for enforcement authorities in UK to recover money/assets in criminal and civil proceedings
Set of criminal offences to combat money laundering (AML offences)
Concealing criminal property (if person disguises criminal property)
Arrangements (if person facilitates use of criminal property)
Acquisition use and possession (person acquires, uses or has possession of criminal property)
105
What are the 3 mandatory requirements of RICS Professional Statement - Countering Bribery, Corruption, Money Laundering and Terrorist Financing 2019?
1. Mandatory requirements for anti-bribery, corruption, anti-money laundering and terrorist financing
2. Guidance setting out supporting good practice for the above
3. Supplementary guidance on some of the concepts set out in Parts 1 and 2
