5. Duty to supervise and oversee of the agency and its executive officer:

PREVENTING, DETECTING AND AVOIDING CONFLICTS OF INTEREST

The agency licensee and the agency executive officer must oversee the conduct of the licensees who represent them. They must ensure that these licensees comply with the Act. Thus, they must prevent conflicts of interest, especially by implementing the following measures:

• Review the practices and activities to identify those that may generate conflicts of interest;

• Establish clear guidelines and standards to avoid any potential risk of conflict of interest. These guidelines and standards should be reassessed frequently;

• Ensure that the practices and activities comply with the established guidelines and standards.
   

The agency licensee and the agency executive officer shall develop, implement and enforce conflict of interest policies and procedures for licensees who represent the agency. These policies and procedures must include the following components:

• A definition of a conflict of interest and examples of situations that may generate a conflict of interest or the appearance of a conflict of interest, to facilitate its understanding and detection;

• A disclosure procedure to inform the agency executive officer of actual or potential conflicts of interest;

• A procedure showing how the licensee intends to resolve conflicts of interest. Such a procedure should include concrete actions to end conflicts of interest, such as how a broker can stop serving the client;

• A requirement to document identified conflict-of-interest situations and specify how they have been resolved;

• Periodic reporting to agency executive officers on documented conflict-of-interest situations;

• A training program offered to licensees, agency executive officers, and agency employees to promote a better understanding of conflict-of-interest policies and procedures;

• Internal control mechanisms to ensure compliance with conflict-of-interest policies and procedures, such as random or risk-based reviews of client files and licensee practices.