PSR scrapped: What are the Premier League's new financial rules and how Wolves and Aston Villa voted

The PSR rules have come in for increased criticism in recent years - with clubs limited to losing a maximum of £105m over a three year cycle.

Wolves had found themselves having to sell players to avoid breaching the rules - while Aston Villa are one of a host of clubs who have been openly critical of the rules.

But the £105m limit is to be a thing of the past - with Premier League clubs voting in a new system for financial fair play.

In a vote among clubs, 14 were in favour of bringing in a 'squad cost ratio' system - with six clubs voting against it.

The new system is run over a season cycle - and will limit clubs spending player and manager wages, transfers and agents' fees to 85 per cent of their revenue.

However, teams who are competing in Europe will have to adhere to UEFA's own rules, which sets the limit at 70 per cent.

There was also another vote to bring in a system called 'anchoring', which would place a top limit on spending based on the money earned by a bottom club. However, 12 clubs voted against it.

In a statement, the Premier League said: "The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and bring the league's financial system close to Uefa's existing SCR rules," a Premier League statement read.

"The other key features of the league's new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs."

What are the SCR rules and how will clubs be impacted

The PSR rules have come in for flack from a number of clubs - with some found to be in breach of those rules.

However, several clubs were reportedly keen to keep the status quo due to being in healthy financial positions. Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds were the clubs who voted against the change.

The new rules limit what can be spent by clubs on wages and transfers.

There is a grey area in terms of the UEFA rules - which limit spending to 70 per cent of revenue. With the Premier League bringing in their own rules, it could be possible for a club to be compliant to the Premier League rules, but break the European ones.

Chelsea and Villa are two clubs who have been handed fines in the past in the for breaking the European limit.

The Premier League rules also differ in other areas. They are allowing for a multi-year rolling allowance of 30 per cent, which permits clubs to spend beyond the 85 per cent limit. 

That is designed to allow clubs to invest ahead of revenue or sporting achievement, according to reports.

An assessment will be made each March and there have been clear guidelines outlined, explaining what will happen if rules and regulations are breached.

The 85 per cent marked is being called the 'Green Threshold'. If a club spends above it then they will receive a financial penalty.

Then there will be a 'Red Threshold' threshold of 85 per cent plus the allowance. If a club goes beyond that, then they will face a six point deduction which will increase by one point ever £6.5m they go over the red threshold.