Reading have become the second Championship club to be hit with a points deduction for breaking Profit & Sustainability rules.

The Royals have slipped to 19th in the table after the six point penalty was delivered by the EFL after the club agreed to the breach.

Derby County were hit with a nine-point penalty for a similar offence earlier this week, adding to their 12-point deduction for entering administration.

Of Reading, the EFL said: “It follows a review of the financial submission from the Club for the four-year period 2017/18 to 2020/21 where it was determined the Club had recorded a loss of £57.8m, £18.8m in excess of the £39m Upper Loss Threshold.”

The time period was adjusted from the usual three-year period to four to accommodate the impact of the coronavirus pandemic.

The penalty also includes a further six points which will be suspended until the end of next season.

The EFL added: “The club has also agreed to adhere to a business plan focused on a number of financial targets, including controlling player-related expenditure, with the objective of moving the Club towards P&S compliance in forthcoming reporting periods.

“The decision is final and not subject to appeal, with the Championship league table being amended with immediate effect.”

Alongside the points penalty, Reading and the EFL have agreed a cap on salary levels of no more than £21.1m for the current season and then £16m in 2022/23 so long as they retain their Championship status.

Further conditions include only being able to register 25 senior players, not pay any transfer, loan or compensation fees in excess of the agreed level with the EFL, while there are also restrictions on the extensions of contracts.

Trevor Birch, EFL Chief Executive, said: “The EFL’s Profitability and Sustainability rules are in place to discourage short-term overspending and it is appropriate that the League takes the necessary action on behalf of its membership when a transgression occurs.

“The League is satisfied that the sanction for the breach, being imposed by way of an agreed cecision, is proportionate having considered all the relevant factors and will continue to work closely with the club as it seeks to meet its obligations moving forward.”