Nottingham Forest have been deducted four points for breaching Profit and Sustainability Rules, the Premier League has confirmed.
Earlier in the season, a precedent was set as Everton were deducted 10 points - reduced to six on appeal - for failing to abide by the rules up to the end of 2021-22.
In that instance, the Toffees had exceeded the limits by £19.5m, and the expectation was that Forest would face a bare minimum of a six-point penalty for their illegal deficit being greater than that of Everton's.
However, the Premier League has ruled that a four-point penalty will suffice, despite Forest exceeding the £61m limit for a newly-promoted side by £34.5m.
In an extensive review by an Independent Commission, Nottingham Forest's "exceptional cooperation" has effectively led to their punishment being reduced from six points to four.
The written reasons set out how and why Forest have been penalised, with three points being deducted for what the Premier League describe as the 'entry point for a significant breach'.
A further three points have been handed out for the 'circumstances and scale of the admitted breach', with the two-point reduction being described as 'mitigation'.
The general statement read: "An independent Commission has applied an immediate four-point deduction to Nottingham Forest FC for a breach of the Premier League's Profitability and Sustainability Rules (PSRs) for the period ending Season 2022/23.
"Nottingham Forest was referred to an independent Commission on 15 January, following an admission by the club that it had breached the relevant PSR threshold of £61 million by £34.5 million.
"The threshold was lower than £105 million as the club spent two seasons of the assessment period in the EFL Championship. The case was heard in accordance with new Premier League Rules, which provide an expedited timetable for PSR cases to be resolved in the same season the complaint is issued.
"The independent Commission determined the sanction following a two-day hearing this month, at which the club had the opportunity to detail a range of mitigating factors. The Commission found that the club had demonstrated "exceptional cooperation" in its dealings with the Premier League throughout the process."
Forest have the right to appeal, and may choose to do so having stressed that the breach of the regulations was partly down to waiting three months to maximise the amount of money that they received for the sale of Brennan Johnson to Tottenham Hotspur.
Had they sold the Wales international to Brentford for £30m in June, Forest would have received less money but likely passed the relevant rules courtesy of the June 30 deadline, whereas waiting until the back end of the transfer window led to receiving £17.5m in extra transfer funds but breaking the set rules.
The consequence of the punishment is Forest dropping into the Premier League relegation zone, now facing a one-point deficit to Luton Town, with whom they drew 1-1 on Saturday.
