Ethics Key Points

Question 1

What are the PII thresholds?

Answer 1

Turnover less than £100,000 = £250,000
Turnover between £100,001 - £200,000 = £500,000
Turnover more than £200,001 = £1,000,000

Question 2

What are the three levels of disciplinary action?

Answer 2

1. Action by Head of Regulation
2. Disciplinary Panel
3. Tribunal

Question 3

What four actions can the Head of Regulation initiate?

Answer 3

1. Fixed Penalty Notice
2. Regulatory Compliance Order
3. CPD sanctions
4. Referral to Disciplinary Panel

Question 4

What penalties are available to the Disciplinary panel?

Answer 4

1. Issue a Compliance Order
2. Impose unlimited (but proportionate) fine
3. Impose conditions on future RICS registration
4. Expulsion from membership
5. Require publication of the results of the hearing

Question 5

What are the Principles of RICS Regulation for Members and Firms?

Answer 5

Provide a framework which members and firms can decide how they can meet the requirements of the Rules of Conduct.

1. Proportionality
2. Accountability
3. Consistency
4. Transparency
5. Targeting

Question 6

What are the Global Professional and Ethical Standards 2015?

Answer 6

Provide an excellent Service
Promote Trust in the profession
Act with Integrity
Treat others with respect
Take responsibility

Question 7

What is the Professional and Ethical Standards Decision Tree?

Answer 7

This is a flow-chart that provides a framework of questions members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner or situation.

Question 8

What are 3 benefits of RICS regulation for firms?

Answer 8

Confidence (for clients)
Professionalism
Security (PII cover, Complaints Handling)

Question 9

What are 5 benefits of RICS membership?

Answer 9

Status
Market Advantage
Recognition
Knowledge 
Network

Question 10

What % rules around RICS regulation for firms?

Answer 10

• If 50% of Principles are RICS members they must be regulated by RICS
• If 25% of Principals are RICS members they can elect to be regulated by RICS

Question 11

What are principals in RICS regulation rules?

Answer 11

Sole practitioners
Directors
Partners
Board members
Anyone with equivalent status to the above

Question 12

What’s a Responsible Principal?

Answer 12

Each firm must nominate one person who is obliged to ensure all reasonable steps are taken and systems in place to ensure compliance with regulatory and RICS requirements.

Question 13

What are the 6 pieces of information required for RICS regulation as an annual return?

Answer 13

1. Type of business and staffing details
2. Statutory regulated activities (e.g. financial services)
3. Nature of clients
4. Complaints Handling Procedure details and records
5. Professional Indemnity Insurance details
6. Whether the firm holds client’s money

Question 14

What are the 3 levels of disciplinary action?

Answer 14

1. Action by Head of Regulation
2. Regulatory Tribunal
3. Appeal Panel

Question 15

What are some reasons it might be appropriate to decline an instruction?

Answer 15

1. You are not competent
2. You do not have sufficient facts
3. The client will not sign TOE or AML checks
4. Conflict of Interest
5. PII cap cannot be agreed
6. Advice is pro bono and your PII does not cover this
7. Client is in UK government sanctions list

Question 16

What are 3 steps you must follow when agreeing ToE?

Answer 16

1. Check Competence
2. Check Conflicts of Interest
3. Confirm TOE and get written approval before you start work

Question 17

What is the RICS document on Conflicts of Interest?

Answer 17

RICS Global Professional Statement on Conflicts of Interest 2017

Question 18

What are the three types of conflicts of interest as defined in RICS Global Professional Statement on Conflicts of Interest 2017?

Answer 18

1. Party Conflict - work on same instruction for 2 parties
2. Own Interest Conflict - relating to personal interest
3. Confidential Information Conflict - work which is confidential

Question 19

What is the three step process you must follow when handling a Conflict of interest?

Answer 19

1. Conflict Avoidance - can you take the instruction without causing a conflict of interest
2. Written Advice to both parties
   
   • Disclose nature of conflict, circumstances and
     other relevant facts
   • State how you intend to avoid the conflict (ie.
     informaiton barrier)
   • Be as clear as you can so both parties can make
     decision
   • Request written confirmation from both parteis of
     their informed consent
3. Conflict Management - set up information barrier

Question 20

What are two things to consider when handling a conflict of interest.

Answer 20

Transparency and Openness

Question 21

What is the key message in RICS Global Professional Statement on Conflicts of Interest 2017?

Answer 21

A member must not advise or represent a client where doing so would involve a conflict of interest or a significant risk of a conflict of interest other than when those involved have provided their informed consent.

Question 22

When don’t you need your clients approval when dealing with confidential information?

Answer 22

For statutory reasons e.g. HMRC or the Police

Question 23

How long should old files be held before being disposed of?

Answer 23

6 years

Question 24

What is the RICS Guidance on Complaint Handling?

Answer 24

RICS Guidance Note on Complaints Handling 2016

Question 25

Does a written complaint handling procedure need to be approved by RICS?

Answer 25

Yes!

Question 26

What should you remember about Complaints Handling Procedure?

Answer 26

- Written CHP must be approved by RICS - Notify PII insurers when there is a complaint - Details of CHP should be issued to client at same time as TOB - A complaints log must be maintained - Firms must include an ADR in their CHP

Question 27

What are the standard minimum procedures for the handling of a complaint?

Answer 27

Stage One - In House | Stage Two - ADR/ Third Party

Question 28

What are the maximum levels of uninsured excess required by RICS?

Answer 28

Liability up to £250,000 = greater of 2.5% of the sum insured or £10,000 Liability over £500,000 = 2.5% of the sum insured

Question 29

What are the rules on PII run-off cover?

Answer 29

For Consumer Claims - A minimum of £1m of aggeregate cover over a minimum of 6 years For Commercial Claims: - More lengthy cover up to 15 yrs after work was taken

Question 30

What note sets out areas of good practice regarding Clients Money? What are the areas of good practice?

Answer 30

RICS Professional Statement 'Client Money Handling' 2019 1. Holding Client Money 2. Providing information to clients 3. Receipts of client money 4. Payment from client accounts 5. Accounting records and controls 6. Compliance

Question 31

What are some key rules on Clients money?

Answer 31

- Client accounts must be kept seperately and identifiable - The word client is on the bank account and cheque book - Client should have monies on demand - Bank reconciliations performed at least monthly - Accurate records kept with running balance - Annual audit obligations - Signatories must be agreed with authorised staff and 2 signatures required - Need to have procedures on website

Question 32

What scheme does RICS run to protect client's money?

Answer 32

Clients' Money Protection Scheme Last resort protection in instances where a RICS Regulated firm is unable to repay a client's money

Question 33

What schemes do RICS have to help members/firms with PII?

Answer 33

RICS Run-off Pool - firms unable to claim run-off cover RICS Assigned Risk Pool - at cost for members who cant arrange cover RICS Low Earners Scheme - for retired/part time members Members Support Service for members facing claims carried out by an employer now in administration

Question 34

What does the Rules of Conduct require in respect of Clients Money?

Answer 34

A firm shall preserve the security of client's money entrusted to its care in the course of its practice or business.