Ethics, rules of conduct and professionalism Flashcards
(138 cards)
1
Q
When was the RICS founded?
A
1868
2
Q
How many members have RICS membership?
A
Over 130,000
3
Q
What are the 4 levels of RICS membership?
A
- FRICS
- MRICS
- AssocRICS
- Trainee/Student
4
Q
When did the RICS Rules of Conduct (2021) come in to effect?
A
2nd February 2022
5
Q
What are the five Rules of Conduct?
A
Rule 1. Members and firms must be honest, act with integrity and comply with their personal obligations, including obligations to RICS
Rule 2. Members and firms must maintain their professional competency and ensure that services are provided by competent individuals who have the necessary expertise
Rule 3. Members and firms must provide good-quality and diligent service
Rule 4. Members and firms must treat others with respect and encourage diversity and inclusion
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 in their profession
6
Q
When was the previous Rules of Conduct put in place?
A
2007
7
Q
Name the changes brought into the new Rules of Conduct.
A
- A simpler structure
- Clear examples
- Focusing on respect, diversity and inclusion
- Understanding evolving technology
- Tackling global challenges
8
Q
What are the RICS three main roles?
A
- 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
9
Q
What is the name of ‘The Future of the RICS’?
A
The Bichard Review
10
Q
What does The Lord Bichard Review aim to do?
A
- “clarify the purpose of RICS, including its responsibility to act for the public advantage;
- make recommendations on its governing structure to deliver that purpose; and
- provide proposals for the incoming leadership and governing body on the future culture and strategy of the Institution
11
Q
When was the Bichard Review published?
A
30th June 2022
12
Q
What are the 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 & knowledge sharing
- Network - Access to 130,000 professionals worldwide
13
Q
What are the three benefits of regulation for firms?
A
- Confidence - for clients as regulated firms are monitored by RICS Regulation
- Professionalism - firms will have to provide clear, impartial and expert advice
- Security - firms have to have a recognised complaints procedure, access to free independent redress and PI cover.
14
Q
When did the RICS Service Charges in Commercail Property, 1st Edition (2018) come into effect?
A
1st April 2019
15
Q
What are the aims and objectives of the RICS Service Charges in Commercail Property, 1st Edition (2018)?
A
- Improve general standards and promote best practice, uniformity, fairness and transparency in the management and administration of services charges in commercial property
- Ensure timely issue of budgets and year-end certificates
- Reduce the causes of disputes and to provide guidance on resolution, and
- Provide guidance to solicitors, their clients (whether owners or occupiers) and managers of service charges in the negotiation, drafting, interpretation and operation of leases, in accordance with best practice.
16
Q
What are the 6 ethical standards the Rules of Conduct is based on?
A
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
17
Q
What are the bandings for PII insurance?
A
Turnover up to £100k = minimum £250k cover
Turnover between £100k and £200k = minimum £500k cover
Turnover over £200k = minimum £1,000,000 cover
18
Q
What types of due diligence are there?
A
- Know your customer due diligence
- Simple due diligence
- Enhanced due diligence
19
Q
What is KYC due diligence?
A
Know you customer due diligence – checks to identify your client to make sure they are who they say they are
20
Q
What is simple due diligence?
A
Simple due diligence – lowest level of due diligence when there is little risk
21
Q
What is enhanced due diligence?
A
Enhanced due diligence – thorough investigation when risk is high
22
Q
How do you keep Client confidentiality?
A
Adhere to the Data Protection Act 2018 and EU GDPR 2016. I do not discuss details of cases or provide sensitive information. Data is anonymised where possible.
23
Q
What are the different types of RICS documents?
A
- Professional statement
- Guidance note
- Code of Practice (can be mandatory or guidance) – developed with other bodies
- Jurisdiction guide – purely information on local market
- RICS Regulation note
24
Q
Who is the current President of the RICS?
A
Ann Gray
25
What challenges do you see RICS facing in the next few years?
1. Increased push to sustainability in order to achieve Net Zero
2. Landlords are applying to EPC exemptions due to high cost
3. Implementing technology into buildings – understanding and reporting on data will help industry move faster. But then also need to consider privacy when sharing this data.
4. Retail sector need to focus on service delivery to stay competitive
5. Changes in the way offices model and how companies operate might require guidance for surveyors
26
Explain the purpose of Workman's Procurement Policy.
Designed to provide a framework for the management of all purchasing activity undertaken by Workman on behalf of its clients. The Purchasing Policy enables the competitive engagement of all third party suppliers and contractors who provide goods, services and works to Workman on behalf of its clients.
27
What is the purpose of Workman's Anti Corruption and Bribery Policy (Gifts and Hospitality)?
(a) set out our responsibilities, and of those working with us and for us, in observing and upholding our position on bribery and corruption; and
(b) to provide information and guidance to those working with us and for us on how to recognise and deal with bribery and corruption issues.
28
What requirements need to be met to meet the Workman's gift and hospitality policy?
1. Not made with the intention of influencing a third party
2. Complies with the law
3. Does not include cash or a cash equivalent
4. It is not excessively expensive or extravagant
5. It is given openly
29
What does the Ethics Decision tree provide?
It provides a framework of questions which members should ask themselves in a potentially unethical situation
30
What the three levels of disciplinary action?
1. Action by head of regulation
2. Regulatory tribunal
3. Appeal panel
31
What is the difference between conflict avoidance and conflict management.
Conflict avoidance - when you will not accept the instruction
Conflict management - take steps to manage the conflict of interest
32
Name two mandatory professional obligations for RICS members
1. CPD requirements
2. Members must cooperate with RICS
33
What do you understand by the term self-regulation?
The act of something or someone regulating itself without intervention from external bodies
34
Name three manditory professional obligations for RICS firms?
1. Cooperate with the RICS
2. Complaints handling procedure
3. Must display their business literature
35
What are the key functions of the RICS?
1. High standards
2. Promote trust
3. Leading source of information and advice
36
When did RICS las update their disciplinary panel rules?
RICS Disciplinary, Registration and Appeal Panel Rules (October, 2019)
37
What are the three benefits of regulation for firms?
1. Confidence - for clients as regulated firms are monitored by RICS regulation
2. Professionalism - firms will have to provide clear, impartial and expert advice
3. Security - firms have to have a recognised complaints handling procedure, access to free independent redress and PII cover
38
What information is required in an annual return for RICS registration?
1. Type of business and staffing details
2. Statutory regulated activities - such as for financial services
3. Nature of clients
4. Complaints handling procedure details and records
5. Professional indemnity insurance details
6. Whether the firm holds clients money
39
What are the mandatory professional obligations for RICS memebers?
1. Comply with the CPD requirements set by RICS
2. Cooperate with RICS
3. Promptly provide all information reasonably requested by the Standards and Regulation Board
40
What are the mandatory professional obligations for RICS firms?
1. Publish their complaints-handling procedure
2. Appropriate professional indemnity insurance
3. Appoint a sole principal
4. Cooperate with RICS
5. Promptly provide all information reasonably required by the Standards and Regulation Board
6. Display on their business literature to denote that are RICS regulated
7. Report to RICS any matter they are required to report under the Rules for the Registration of Firms
41
What is the Ethics Decision Tree?
The 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
42
Who can an RICS member call when facing any ethical issue?
The RICS Regulation Confidential Hotline
43
What are the three levels of disciplinary action?
1. Action by Head of Regulation
2. Regulatory Tribunal
3. Appeal panel
44
On completion of their investigation, what four actions can the Head of Regulation take for disciplinary actions?
1. Serve a Fixed Penalty Notice
2. Make a Regulatory Compliance Order
3. CPD sanctions
4. Refer the matter to the Disciplinary panel for consideration under the discipline rules
45
When did Use for Social Media: Guidance for RICS Members come into effect?
30st June 2021
46
What social media posts would the RICS be likely to investigate?
1. Discrimination
2. Dishonesty
3. Abuse
4. Bulling
5. Concerning communications
6. Ignoring previous advice or warnings about concerns
47
Define a conflict of interest between two clients.
A conflict of interest arises when a member or firms independence and impartiality is threatened due to the existence of a conflict.
48
Give examples of a conflict of interest between two clients.
1. A financial interest
2. A personal interest
3. Commercail relationships
4. Acting on both sides of a transaction
49
What is the difference between conflict management and conflict avoidance?
Conflict avoidance is when you do not accept the instruction
Conflict management is when the instruction is accepted and steps are agreed to put in place to manage the conflict
50
Name the mandatory statement relating to conflicts of interests.
RICS Global Professional Statement on Conflicts of Interest, 2017
51
When did the RICS Global Professional Statement on Conflicts of Interest come into effect?
1st January 2018
52
Name the three different types of conflicts of interest.
1. A 'Party Conflict' relating to work on the same or related instruction for two different parties
2. An 'Own Interest Conflict' relating to a personal interest
3. A 'Confidential Information Conflict' relating to work between two parties that is confidential
53
What is informed consent?
This is given in writing by the party is the person explaining the position to them is entirely transparent about any material factors
54
When should a surveyor seek informed consent?
If satisfied that all relevant parties are best served by doing so
55
All conflicts must be managed with in accordance with what?
the Professional Statement
56
What must be in place for every RICS firm relating to conflicts of interests?
Effective systems and controls appropriate to the size and complexity of their business to ensure compliance
Keep records to show their compliance with the Statement
57
Name the three steps you must follow when a conflict of interest arises.
1. Conflict Avoidance
2. Written Advice to Both Parties
3. Conflict Management
58
Explain Conflict Avoidance.
Upon receipt of the full facts, consider whether the conflict is irresolvable and should be avoided or can be property managed
Decide whether you want to accept or decline the instruction
59
Explain Written Advice to Both Parties
Set out in writing three points:
1. Disclose the nature of the conflict
2. Be as clear as possible
3. Request written confirmation of their informed consent
60
Explain Conflict Management
An information barrier needs to be set up in accordance with the provisions agreed with both clients
61
Explain how an information barrier may operate.
1. Robust barrier
2. Physical separation
3. Information must be securely stored
4. Keep a clear audit trail of written and oral communication overseen by the firms compliance officer
62
What is the RICS Professional Statement: Conflicts of interest - UK commercail property market investment agency, 2017?
Relates only to UK commercail investment agency work where a specific risk has been identified
63
What is duel agency?
Where an agent has a contractual agency relationship with both the seller and the buyer at the same time
64
When can duel agency take place?
Never - this practice must not be undertaken in any circumstances from 1st January 2018
65
What is incremental advice?
Where an agent is approached by another party to provide advice
66
When can a RICS member provide incremental advice?
If consent is given and an information barrier is but in place
67
What does the RICS Confidentiality Bye Laws state?
Client confidentiality must be maintained for all client affairs
68
How long must old filed be kept for?
For a minimum of 6 years before disposal and destroyed securely
69
Where are the details of complaints handling procedures found?
RICS Guidance Note on Complaints Handling, 2016
70
Who must approve a firms written complaints handing procedure?
The RICS
71
Who do you need to notify as soon as a complaint is made?
PII insurers
72
What is a complaints log?
It need to be maintained to show the details, progress and outcome of any complaints
73
What need to be included in a firms CHP?
RICS approved Alternative Dispute Resolution (ADR)
74
Explain Stage One (in house) of handling a complaint.
Quick, clear and transparent
Details of the Complaints Handling Officer
Complaint must be made in wiring
A complaint should be acknowledged within 7 days and investigated within 28 days
75
Name a relevant appropriate redress mechanism.
The Centre for Dispute Resolution (CEDR)
The Property Redress Scheme
RICS Dispute Resolution Service
76
What is the minimum number of CPD hours members must undertake?
20 hours, with at least 10 hours formal
77
Where do members record their CPD activity?
RICS CPD Management System online on the RICS website
78
What is formal CPD?
All forms of structured learning that has clear learning objectives and outcomes
79
Give examples of formal CPD?
Online training courses, seminars and self-managed learning
80
What is informal CPD?
This includes any self-managed learning that is relevant or related to your professional role
81
What is the purpose of professional indemnity insurance?
To protect clients, surveyors and third parties against negligence
82
Where can you find details of PII?
Professional Indemnity Insurance Requirements, Version 7 (w.e.f. 1st May 2020)
83
What are the minimum requirements based on turnover for PII cover?
£100,000 or less - £250,000
£100,001 to £200,000 - £500,000
£200,001 and above - £1,000,000
84
How often does the PII certificate need to be sent to the RICS?
On an annual basis
85
What run-off cover is required following cessation of trading?
Adequate and appropriate cover for at least 6 years. RICS recommends longer as claims can be made up to 15 years after work is undertaken
86
If a firm is unable to obtain run-off cover, what option is available to them?
Coverage from the RICS Run-off PoolW
87
Can you give three examples of negligence legal cases.
Yianni v Edwin Evans (1981) - valuer owes a duty of care to a mortgagee purchaser relying on the valuation
Scullion v Bank of Scotland (2010) - Surveyor providing advice does not owe a duty of care to a lender in respect of a buy-to-let due to a commercially astute borrower
Burgess v Lejonvarn (2020) - pro bono work owes a duty of care in respect to the services they provide
88
What actions can be take to avoid negligence claims?
1. Clearly understand the clients objectives and confirm precise instructions in writing in the terms of engagement
2. Ensure you are competent to undertake the instruction
3. Undertake the work in accordance with the relevant RICS Standards and Guidance Notes
4. Make detailed file notes and take photographs
5. Keep up to date with market knowledge and legislation
6. Cap the professional liability excess on your PII policy in the Terms of Engagement
88
Explain the Limitation Act 1980
Contract - 6 years from the date of negligent act. Section 14A provides an alternative limitation period for 3 years from the date of knowledge of the damage subject o the the 15 years long stop from the negligent act
Tort - 6 years from the date the claimant suffered the loss
89
What does the Rules of Conduct say about the importance of complying with client money requirements?
Firms keep client money safe and have appropriate accounting controls
90
What is included in clients money?
1. Deposits
2. Rents
3. Service charges
4. Retentions
91
What is the name of the Professional Statement relating to client money handling?
Clinet Money Handling, 1st edition 2019
92
When did the RICS Professional Statement 'Client Money Handling', 1st edition 2019 come into effect?
January 2020
93
What are the six main areas of good practice set out in the RICS Professional Statement: 'Client Money Handling', 1st edition 2019?
1. Holding client money
2. Providing information to clients
3. Receipts of client money
4. Payments from client accounts
5. Accounting records and controls
6. Compliance
94
What needs to appear on a client account?
The account needs to be kept separately and clearly identifiable
The word 'client' is on the bank account and cheque book
95
What procedures are in place when handling clients money?
1. Separete and clearly identifiable accounts
2. The word 'client' must appear on the account
3. Clients has access to money on demand
4. Payment of interest is agreed with client
5. Regular bank reconciliations (checked monthly)
6. Accurate records
7. Annual audit
8. Records showing all cash transactions
9. Signatories must be agreed
10. All firms to display procedures on their website
96
How often can the RICS Regulatory Review Visits inspections take place?
Usually on a routine 3 yearly basis
97
What is the purpose of the RICS Clients' Money Protection Scheme?
Provides last resort protection in instances where RICS Regulated firms are unable to repay a client's money
98
When opening a new practice what needs to be considered?
1. Inform RICS
2. Appoint a Responsible Principal for all RICS communication
3. Register with RICS Regulatory Board
4. PII
5. Procedures for Clinet Money Handling
6. Register for the RICS Valuer Registration Scheme
7. Complaints Handling Procedure
8. Complaints log
9. Complaints Handling Officer
10. Logo kit
11. Locum
12. CPD is logged
13. RICS Annual Return
99
Please list the statutory Complience required for new firms.
1. Disclose business name
2. Disability discrimination compliance
3. Financial services compliance
4. Bribery Act 2010 compliance
5. Appoint a Money Laundering Reporting Officer
6. Health and Safety compliance
7. GDPR
8. Estate agency compliance
9. Inform HMRC
10. Emplyment law
11. Insurance compliance
100
What needs to be considered when closing a practice for RICS Complience?
1. Inform the RICS
2. Inform clients
3. Return monies
4. Inform insurers and procure PII run-off cover (minimum 6 years)
5. Retain client files (minimum 6 years)
101
What is the key legislation relating to gifts, bribery and corruption?
Bribery Act 2010
Proceeds of Crime Act 2002
102
What is the aim of the Bribery Act 2010?
Reduce bribery in business in the UK and abroad
103
What is considered a bribe?
Giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust
104
What are the six bribery principles?
1. Proportinality
2. Top level commitment
3. Risk assessment
4. Due diligence
5. Communication
6. Monitoring and review
105
What are the four bribery offences?
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official
4. Failing to prevent a bribe
106
Who polices the Bribery Act?
Serious Fraud Office
107
What are the penalties for breaching the Bribery Act?
Maximum 10 years imprisonment and / or unlimited fine for individuals and companies
108
What is the name of the document relating to money laundering?
Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, 2017 - as amended 2019
109
Name some key provisions relating to money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 - as amended 2019
1. Written money laundering and terrorist financing risk assessment
2. Impliment systems, policies and controls and procedures to address money laundering
3. Adopt appropriate internal controls
4. Provide staff training
5. New customer due diligence requirements
6. Politically exposed persons
7. Record keeping
8. AML checks
9. High-risk factor due diligence
110
Give examples of different due diligence.
Customer Due Diligence (CDD)
Enhanced Due Diligence (EDD)
111
What is Customer Due Diligence?
1. Identify the client and verify their identity (passport etc.)
2. Identify the beneficial owners of the client
3. For a company, its name, company number and address
4. Names of directors
5. Obtain information on the purpose and intended nature of the business relationship
112
What is Enhanced Due Diligence?
Additional procedures required for any transaction or business relationship involving a person established in a high risk country or a politically exposed person
113
What is a politically exposed person (PEP)
Someone who has been entrusted with a prominent public function
114
How should Enhanced Due Diligence (EDD) be used for a PEP?
More detailed examination of the background and purpose of the transaction and increased monitoring
115
What is the limit on accepting cash?
10,000 euros
116
What are the penalties for failure to comply with money laundering regulations?
Maximum 14 years in prison an/or unlimited fine for assisting with money laundering
Maximum 10 years in prison an/or unlimited fine for tipping off a person by informing them they are under suspicion or for failing to report suspicion
117
Provide a summary of the typical requirements for money laundering checks for CDD
Public limited company - LSE listing
Public accountable body - Government ownership / control
Private limited company - Certification of incorporation
Full name, registered number, registered office, business address, names of all directors and names of all shareholders with 25% or more holding, identification of a higher risk clinet
Private individual - Copy of valid passport or driving licence with photo
Copy of bank statement, credit card bill, council tax statement or utility bill t show evidence of address, not more than 3 months old
118
Name red red flags associated with potential money laundering.
1. Inability or unwillingness of parties to provide identity documents
2. Changes to parties involved in transactions
3. Unusual transaction features
4. Payment of fees, purchase or rental monies in unusual currencies
119
What does the Proceeds of a Crime Act 2002 do?
Provides powers for enforcement authorities in the UK to recover in criminal and civil proceedings money and other assets which are deemed to be proceeds of a crime
120
What are the three main areas of offence under the Proceeds of a Crime Act 2002
1. Concealing criminal property
2. Arrangements
3. Acquisition
121
What does the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing, 2019 set out?
Sets out the mandatory, globally application requirements for RICS members and regulated firms in relation to bribery, corruption, money laundering and terrorist financing
122
What are the three parts of the 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 & 2
123
Name what RICS regulated firms must do to comply with Part 1 - bribery and corruption of Countering bribery, corruption, money laundering and terrorist financing, 2019?
Bribery and corruption
RICS regualted firms must:
1. Not offer or accept a bribe
2. Have procedures in place to comply with the law
3. Report suspicion to the relevant authority
4. Act with due diligence
5. Retain records
124
Name what RICS regulated firms must do to comply with Part 1 - money laundering and terrorist financing of Countering bribery, corruption, money laundering and terrorist financing, 2019?
Money laundering and terrorist financing
1. Not facilitate or be complicit in ML & TF
2. Have systems in place to comply with the laws
3. Report suspicion
4. Evaluate and review the risks presented to the firm
5. Use third party reliance for checks
6. Take appropriate measure to understand the clinet and the purpose of the instruction
7. Verify the client by undertaking basic ID checks
8. Retain records
125
Name what RICS regulated firms must do to comply with Part 2 - guidance of Countering bribery, corruption, money laundering and terrorist financing, 2019?
1. Have a written policy in place for, and senior Mangement to take control of the procedures
2. Publish a code of behaviour for staff and provide staff training
3. Encourage transparency
4. Set up a gifts register
5. Keep up to date with legislation
126
What are the 3 conflicts of interest?
1. Party conflict
2. Own interest conflict
3. Confidential information conflict
127
What is a party conflict?
A situation in which the duty to act in the interests of a Client or other party in a professional assignment conflicts with a duty owed to another Client or party in relation to the same professional assignment
128
What is an own interest conflict?
A situation in which the duty to act in the interests of a Client in a professional assignment conflicts with the interests of that same RICS member / firm
129
What is a confidential information conflict?
A conflict between the duty of an RICS member to provide material information to one Client, and the duty of that RICS member to another Client to keep that same information confidential
130
What is your firms policy on conflicts of interest?
1. Conflict of interest check required prior to accepting any new instruction
2. Anyone who finds themselves in a conflict situation must declare and disclose it
3. Withdraw from any conflicts situation until it has been considered and resolved
4. Declare on conflicts of interest database
131
What is Workman's purchasing policy?
Achieve value for money and deliver efficiency and control
Obtain 3 or more quotes for any works over £5k
2 quotes for works between £1.5k and £5k
Only approved Workman contractors to be used
Keep records and documents on EFS
Workman standard service agreement used
Purchases awarded by Workman standard PO
132
What money laundering legislation / regulations are you aware of?
1. Money Laundering Regulations 2017
2. Proceeds of Crime Act 2002
3. RICS countering bribery and corruption, money laundering and terrorist financing 2019
133
What bribery legislation are you aware of?
Bribery Act 2010
RICS Countering bribery and corruption, money laundering and terrorist financing, 2019
134
What constitutes an offence under the current money laundering regulations?
1. Concealing, disguising, converting, transferring or removing criminal property
2. Entering into or becoming suspicious in an arrangement that facilities the acquisition, retention, use or control of criminal property on behalf of another person
3. Acquiring, processing or using criminal property
135
What is a locum and when is one required?
Locum is another professional who agrees to step in when you are unable to work
Sole practitioner or firm with sole principle
136
What RICS guidance is there on Client Money Handling?
RICS Client Money Handling, 2019
RICS Client Money Protection Scheme, 2019
137
What insurances are required when setting up an RICS regulated business?
1. PII
2. Public liability insurance
3. Building insurance
4. Employer liability cover
5. Directors and officers cover
6. Contents insurance
7. Business interruption insurance
