Rules for Members & Firms – 5 Principles of Better Regulation
In 2007 Jon Lever FRICS undertook a research exercise to establish the definition of the 5 Principles of Better Regulation noted in the foreword of the RICS Rules for Members and Firms. No one was able to provide Jon with a suitable answer so during his research, Jon contacted a number of sources in RICS Regulation and searched the internet, such as the Government Better Regulation web site etc.
The following definitions are a summary of this research with additional commentary from Jon regarding how, from his experience, he believes it relates to RICS Regulation and Rules of Conduct as they currently stand.
No.1. Proportionality
This discusses that the Regulator(s) should only intervene when necessary. Remedies should be appropriate to the risk posed and costs identified and minimised. Policy solutions must be proportionate to the perceived problem or risk and justify the compliance costs imposed – don’t use a sledgehammer to crack a nut (simple). All the options for achieving policy objectives must be considered – not just prescriptive regulation Alternatives may be more effective and cheaper to apply. “Think small first” – Regulation can have a disproportionate impact on small businesses. EC Directives should be transposed without gold plating. Enforcement regimes should be proportionate to the risk posed and Enforcers should consider an educational, rather than a punitive approach where possible.
Commentary from Jon Lever FRICS
I think it is important to realise the above statements have a ‘Government’ spin on them and we should step back and review how this effects each of us within RICS. I believe this principle fits neatly into the RICS’s aim to provide regulation at ‘Arms Length’ and promoting principles based regulation which in effect requires each member and firm to follow the simple set of principles and self-regulate. It also moves towards the much more sensible approach of helping those who break the rules get back into regulation, rather than taking the immediate heavy handed approach that the rules used to promote (i.e. before 2007).
No.2. Accountability
This discusses that the Regulator(s) must be able to justify their decisions and be subject to public scrutiny to promote complete fairness. The Regulator’s proposals should be published and all those affected consulted by the Regulator before decisions are taken. It goes on to say that Regulators should clearly explain how and why final decisions have been reached. Regulators and enforcers should establish clear standards and criteria against which they can be judged and there should be well-publicised, accessible, fair and effective complaints and appeals procedures.
The Government Better Regulation goes on to say Regulators and enforcers should have clear lines of accountability to Ministers, Parliaments and assemblies, and the public.
Commentary from Jon Lever FRICS
I think it is important to realise the above statements have a ‘Government’ spin on them and we should step back and review how this effects each of us within RICS. I believe this principle fits neatly into the RICS’s aim to provide ethical regard and taking responsibilities for our actions and openess and transparency.
No.3. Consistency
This discusses that the Regulator(s) must be adopt a common sense approach and that rules and standards must be joined up and implemented fairly. Regulators should be consistent with each other, and work together in a joined-up way. New regulations should take account of other existing or proposed regulations, whether of domestic, EU or international origin. Regulation should be predictable in order to give stability and certainty to those being regulated. Enforcement agencies should apply regulations consistently across the country.
Commentary from Jon Lever FRICS
I think it is important to realise the above statements have a ‘Government’ spin on them and we should step back and review how this effects each of us within RICS. There is a simple thread ensuring that through RICS Rules of Conduct, Professional and Ethical Standards / Principles, a consistent and stable approach is adhered to. This is similarly demonstrated in the RICS Rules of Conduct, help sheets and policy documents and RICS Web site www.rics.org/regulation or www.rics.org/ethics
No.4. Targeting
This discusses that the Regulator(s) should be focused on the problem and minimise side effects and that regulations should focus on the problem and avoid a scattergun approach. Where appropriate, regulators should adopt a “goals-based” approach, with enforcers and those being regulated given flexibility in deciding how to meet clear, unambiguous targets. Guidance and support should be adapted to the needs of different groups. 0Enforcers should focus primarily on those whose activities give rise to the most serious risks. And finally that regulations should be systematically reviewed to test whether they are still necessary and effective. If not, they should be modified or eliminated.
Commentary from Jon Lever FRICS
I think it is important to realise that RICS membership is diverse and varied, sole traders, small, medium and large firms, public & private sector, surveying departments in non surveying companies etc. Yet all have the potential to be regulated by RICS. Along with diversity comes the challenge of regulation. It is about maintaining a focus, targeting and prioritisation of regulatory effort to maintain a balance
There is a simple thread ensuring that through RICS Rules of Conduct, Professional and Ethical Standards / Principles, a consistent and stable approach is adhered to. This is similarly demonstrated in the RICS Rules of Conduct, help sheets and policy documents and RICS Web site www.rics.org/regulation or www.rics.org/ethics
No.5. Transparency
This makes it quite clear that the Regulators should be open and keep regulations simple and user- friendly. It goes on to explain that policy objectives, including the need for regulation, should be clearly defined and effectively communicated to all interested parties. It is important that effective consultation takes place before proposals are developed, to ensure that stakeholders’ views and expertise are taken into account and stakeholders should be given sufficient information, to respond to consultations.
Regulations should be clear and simple, and guidance, in plain language, should be issued in a reasonable timescale before the regulations take effect and those being regulated should be made aware of their obligations, with law and best practice clearly distinguished. Also they should also be given the time and support to comply. It may be helpful to supply examples of methods of compliance and importantly the consequences of non-compliance should be made clear.
Commentary from Jon Lever FRICS
I believe that transparency completes the 5 principles perfectly. It is an inspired key element with these Rules that RICS will investigate, listen and assist those who break the Rules to get back in line with Regulation.Rather than immediately taking a heavy handed approach. I think it is important to realise that RICS membership is diverse and varied, sole traders, small, medium and large firms, public & private sector, surveying departments in non surveying companies etc. Yet all have the potential to be regulated by RICS. Along with diversity comes the challenge of regulation. It is about maintaining a focus, targeting and prioritisation of regulatory effort to maintain a balance
There is a simple thread ensuring that through RICS Rules of Conduct, Professional and Ethical Standards / Principles, a consistent and stable approach is adhered to. This is similarly demonstrated in the RICS Rules of Conduct, help sheets and policy documents and RICS Web site www.rics.org/regulation or www.rics.org/ethics
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IMPORTANT: Remember that the 5 Principles of Better Regulation relate to the REGULATOR, not how we as members or firms should conduct ourselves with our clients. Therefore we should view the 5 Principles of Better Regulation as a function of how RICS (Regulation) will monitor, communicate and treat us in a professional and open and transparent manner when it comes to issues of monitoring (Regulating) our day to day professional practice.
Jon finds a common misconception amongst candidates and members that the 5 Principles of Better Regulation are the way we conduct ourselves with our clients. This is not correct and whilst the 5 Principles of Better Regulation are similar all of the relevant information for how we should conduct ourselves as members and firms is clearly defined and held elsewhere within the Members and Firms rule books, helpsheets and policy documents.
As a chairman of assessors, these are the sort of questions I would ask you about the 5 Principles of Better Regulation?
Well, interestingly I would not necessarily ask you too much about this as there is not much detail on it available. However, to better understand regulation it is key reading so that you appreciate how RICS, our regulator, would look to regulate members and firms. If pressed I would probably only ask the following:
1. Are you aware of the 5 Principles of Better Regulation stated in the foreword of Members and Firms rules? 2. Can you pick one of the 5 principles and explain what you understand it to mean?
Note: This is NOT an exhaustive list of questions!
ever officially closed down for Christmas yesterday (20th December) until 8th January 2013, but as you can see the brain is still ticking and the fingers cannot be idle so I am sure I will be posting the odd blog or two over the festive period.
APCeye 