Gianni Infantino says there are clear signs that the regulations are working with overall club debt in Europe having dropped for the first time - and by hundreds of millions of pounds.
The rules will oblige all clubs in European competition to break even by the start of next season, but despite this apparent new prudency Real Madrid are trying to sign Tottenham's Gareth Bale for a fee that is set to be more than £85million, while Paris St Germain spent £55million on Edinson Cavani and Monaco have spent around £130million on Radamel Falcao, James Rodriguez and Joao Moutinho.
Infantino said that the financial fair play rules did not prevent clubs spending big - if they earned big too.
He told Press Association Sport: "People see these signings and ask how it can happen with financial fair play but it's possible - if you generate 100million euros you can spend 100million.
"The other thing which must be taken into account is that a club may have an agreement to pay that over five years, so the cost is 20million for the season.
"The problem comes is if a club doesn't generate 100million but spends it - then there will be disciplinary consequences."
UEFA is still collating the latest financial figures but Infantino said the body had been encouraged by the overall trend.
"It is quite positive," he added. "It shows financial fair play is working and that it's happening right now.
"Overall losses in European club football are down for the first time, and by several hundreds of millions [of euros]."
Infantino said UEFA's crackdown on 'overdue payables' of money owed to other clubs, to players and in taxes had also worked with the amount outstanding down 60 per cent.
Some clubs such as Malaga and Panathinaikos have been excluded from Europe as a result, while all those clubs handed suspended exclusion have settled their overdue payables.
"No one likes to punish clubs but we will do it," said Infantino. "In the last five years we have excluded 41 clubs from European competition, and eight this season have not been admitted.
On 2011 figures, 46 clubs would have returned losses of between 5million and 45million euros 14 of those be at risk of a UEFA ban by having losses of more than 45million euros.
UEFA will look at the most recent figures next May and then make a decision on whether any clubs will facing disciplinary action including possible exclusion.