Windows 2012 introduced stricter certificate store validations. the Trusted Root Certification Authorities (i.e. Root) store can only have certificates that are self-signed. If that store contains non-self-signed certificates, client certificate authentication under IIS returns with a 403.16 error code.

To solve the problem, you have to remove all non-self-signed certificates from the root store. This PowerShell command will identify non-self-signed certificates:

Get-Childitem cert:\LocalMachine\root -Recurse | 
    Where-Object {$_.Issuer -ne $_.Subject}

In my situation, we moved these non-self-signed certificates into the Intermediate Certification Authorities (i.e. CA) store:

Get-Childitem cert:\LocalMachine\root -Recurse | 
    Where-Object {$_.Issuer -ne $_.Subject} | 
    Move-Item -Destination Cert:\LocalMachine\CA

According to KB 2801679: SSL/TLS communication problems after you install KB 931125, you might also have too many trusted certificates.

[T]he maximum size of the trusted certificate authorities list that the Schannel security package supports is 16 kilobytes (KB). Having a large amount of Third-party Root Certication Authorities will go over the 16k limit, and you will experience TLS/SSL communication problems.

The solution in this situation is to remove any certification authority certificates you don’t trust, or to stop sending the list of trusted certifiation authorities by setting the HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\SecurityProviders\SCHANNEL\@SendTrustedIssuerList registry entry to 0 (the default, if not present, is 1).