The Football League has confirmed that Blackburn Rovers, Leeds United and Nottingham Forest are the first clubs to have been handed transfer embargoes for failing to meet the requirements of Financial Fair Play (FFP).
The trio exceeded the maximum permitted loss of £8 million during the 2013/14 season.
In a statement, the Football League said that other sides could also face embargoes: "The Football League is currently in discussions with a number of other clubs over their FFP submissions and will confirm any further FFP embargoes, if any, in due course.
"It will also now consider submissions from the three clubs promoted to the Premier League and the three clubs relegated to League One at the end of the 2013/14 season.”
Clubs who have been promoted to the Premier League who transgressed the rules will face significant fines. QPR, who are reportedly set to be fined upwards of £30 million, have indicated that they will look to launch a legal challenge.
The embargo, which starts on January 1st, means the three clubs will be unable to register any new players on either a permanent or loan basis unless they have 24 or fewer ‘established’ players and only then within certain guidelines or on a one in, one out basis, again within parameters set by the Football League.
The embargo will be lifted at the end of the season if the clubs are able to show that they have hit this season’s FFP target of of £6 million.
Last week, Town announced losses of £7.2 million for the year to June 2014 with managing director Ian Milne having previously confirmed that the Blues would hit their FFP target: "We’ll be within FFP. We won’t face any embargoes."