The Premier League on Wednesday, in accordance with its rules and policies, deducted nine points from Portsmouth FC after the High Court ruled that the south coast club's administration is valid.

The Premier League applied the sporting sanction, rule C.60, which stipulates that nine points is deducted from any club that suffers an event of insolvency. This is one of several Premier League rules determining how clubs run themselves and conduct their financial affairs.

The League regularly updates its rulebook to reflect and adapt to an ever changing economic and regulatory environment, which helps enable clubs to operate their business and sporting models in a sustainable manner.

Clubs have long had to provide the Premier League Board with annual accounts and full details of any transaction greater than £25,000. In September 2009 the clubs voted to take this further and agreed to the introduction of new financial rules that involve each club having to provide audited accounts and future financial information showing how they will meet their commitments for the following season. These new rules come into force for the 2010/2011 Barclays Premier League season

The submission of future financial information is designed to act as an early warning system and will alert the Premier League of any club taking undue financial risks which may have consequences for its future financial stability.

Any qualification raised in accounts or risk seen by the Premier League Board could result in action to help prevent a club from exposing itself to further liabilities. This could include sanctions relating to transfer activity or club budgets.

This information will be submitted to the Premier League Board in March each year and the process for the 2010/11 season has already begun with clubs currently in the process of submitting the relevant information ahead of next term.

The League's Fit and Proper Persons Test was also strengthened last summer. The changes made bar any individual from becoming a club director if they have an unspent conviction that resulted in a 12 month custodial sentence. This is in addition to relevant UK Company Law.

At the same time, the Premier League introduced a new rule regarding transparency of club ownership with all clubs now required to publicly declare any shareholder with more than a 10 per cent stake.

All these rules taken together are there to ensure that clubs are in a position to sustain themselves financially from season to season and, ultimately, to protect the sporting integrity of the Barclays Premier League.