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The following are all quotes taken from the SRA's website:

1. Principle 8 requires you to "run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles".

2. The Handbook provides further detail about complying with Principle 8 in Chapter 7, "You and Your Business". This includes 10 mandatory outcomes and four indicative behaviours about ensuring proper checks and balances are in place for effective scrutiny of your firm's finances.

3. Specifically, Outcome 7.4 states that you "maintain systems and controls for monitoring the financial stability of your firm and risks to money and assets entrusted to you by clients and others, and you take steps to address issues identified".

4. Quite apart from your professional obligations, you need to be very careful not to trade while insolvent. The SRA may well require you to obtain formal advice on your position. There could also be very serious consequences if you mislead others, such as lenders, about your financial position. Once your firm is in financial difficulty, you face serious risks and need to act with complete propriety.

How, precisely, are CLS complying with any of this and, more importantly, just what is the SRA doing about it?

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