The Independent Football Regulator (IFR) is poised to implement significant changes in English and Welsh football governance, with the power to fine owners up to 10% of a club's revenue or even compel them to sell their stakes. These measures are designed to ensure the financial sustainability of clubs and address concerns about unsuitable owners. The government aims to fast-track the regulator's start, potentially activating its powers as early as November.

The IFR's primary tool will be a new licensing regime for clubs in the top five tiers of English football. This regime will assess clubs' financial health and commitment to financial regulations, proper ownership, fan engagement, and club heritage protection. Provisional licenses will be issued initially, with the IFR working with clubs to meet the minimum criteria for permanent licenses. Failure to comply with licensing conditions could result in the withdrawal of the license.

A key aspect of the IFR's mandate is the implementation of a new "Owners, Directors and Senior Executives' Test". This test will evaluate the honesty, integrity, and financial soundness of individuals currently or potentially running a club. The IFR will have the authority to disqualify individuals who fail to meet these standards. While existing owners will not be automatically reassessed, infringements will be viewed seriously. The IFR can take action if it has concerns about an incumbent's suitability.

The IFR will have a range of sanctions available for non-compliance, including: * Financial penalties of up to 10% of a club's revenue * Disqualification from being an owner or officer of a regulated club * Orders to cease a person's ownership of a club * Requiring an owner to sell the club * Appointing a third party to run the club * Suspension or revocation of a club's operating license

In cases of serious breaches, the IFR will have the power to force owners to divest from a club. The regulator will also have access to banks and law enforcement agencies to conduct thorough due diligence on current and prospective owners.

The IFR will be funded by a levy on clubs. The regulator will consult with clubs when setting levy amounts, with higher-earning clubs paying a greater levy. The IFR's powers will need to be exercised in a way that balances ensuring a competitive landscape and avoiding adverse consequences for investors.

The IFR will also play a role in disputes over financial distribution between the Premier League and the English Football League (EFL). If the leagues fail to reach an agreement, the IFR can appoint an expert panel to impose a settlement. The IFR will also have powers to reduce parachute payments.

The creation of the IFR follows years of consultation and debate. The Football Governance Act, which establishes the IFR, cleared the Commons earlier this month. The government has emphasized the importance of safeguarding the financial sustainability of clubs and ensuring they are accountable to their fans.