REGISTRATION | AUTHORIZATION | RELEASING ADVERTISING | BILLING & PAYMENTS |
VIOLATIONS & PENALTIES | DISPUTES | LIABILITY | MISCELLANEOUS
RULES AND REGULATIONS FOR REGISTRATION AND CONDUCT OF MEDIA BUYING HOUSES
(The Extra General Council of the APNS at its meeting held on August 30, 2001 authorised
the President APNS to amend these Rules, within 6 months of the EGM if he considers that certain
amendments are required for the smooth operation of the Rules).
Whereas the All Pakistan Newspapers Society, herein referred to as the Society, considers it necessary to frame Rules and Regulations governing the Registration of media buying houses, herein referred to as MBH, and for the setting of parameters to determine the nature of the relationship between the agencies, the MBH, the member publications and the Society. Whereas the APNS has decided that any MBH wishing to place business with the member publications of the Society must be registered with the Society, and that no member publication will accept the business from a non-registered MBH, the following rules are framed which shall govern the above relationship:
I. Registration
1 . A Media Buying House (MBH) is an independent legal entity registered with Registrar of Joint Stock Companies as a company having a separate registered office. Its core business will be that of planning, negotiating, buying and releasing advertising for a client or a bifurcated client (that client which has been listed with APNS as a bifurcated client) of an accredited advertising agency. It can also provide services to a foreign client that has no direct operational establishment (subsidiary, branch office or franchisee) in Pakistan. It shall act on the instructions of a client, which has appointed it for media planning, buying and placement, under information to, and with the agreement of the accredited agency of the client, as per the prescribed procedure laid down in the rules. An MBH may either be an independent company, a wholly owned subsidiary, or an affiliate of a known and existing national/international agency group. A department/division within an agency setup may perform functions similar to an MBH, but shall not be considered an MBH.
Provided that the Society shall revoke or refuse Registration to any MBH if the Executive Committee has reasons to believe that the MBH is owned or controlled by the same person or group of persons that own or control any advertiser, print media or electronic media, or due to infringement of regulations contained in Clauses 16-17.
2. An MBH shall be required to apply for Registration on the prescribed form for Registration to the Society. (For the text of the prescribed form see Schedule A). Such applications shall be placed before the relevant committee of the Society for recommendation to the Executive Committee of the Society, unless the application is found by the Secretary General of the Society to be incomplete or inadequate in any respect. The decision of the Executive Committee on such application shall be final and binding on the applicant and on all members of the Society. Provided, that if an application for Registration has been rejected by the Society, no fresh application from the same MBH or any other MBH being owned or managed directly or indirectly by the owners of the MBH whose application has been rejected, shall be entertained for Registration until expiry of six months from the date of such rejection.
3. The MBH while applying for Registration must fulfill the following requirements:
a) Application on prescribed form duly filled, signed and stamped. (See Schedule A).
b) An unconditional, irrevocable Bank Guarantee or a surety in shape of government approved bonds or certificates acceptable to the Society, in the amount of Rs. 10 million.
(See Appendix 1).
c) Appointment letters by at least three APNS-listed clients along with corresponding Letters of Instruction prescribed in clause 5 (i), addressed to their specific ad agencies.
(See Appendix 2 and 3).
d) A pay order/ demand draft of Rs. 500,000 that includes a non-refundable processing fee of Rs.20,000/- being Registration fee drawn in favour of the Society.
e) A guarantee that the business to be placed by it in the member publications of APNS during every year of its Registration would not be less than Rs.10 million with a review by Society every year. (See Appendix 4).
f) It should provide Memorandum and Articles of Association of the Company along with profile of the Directors.
g) Personal surety of all directors should be included at time of registration, which may be utilised for filing of law suits to recover dues of member publications, as and when required. (For text of director's u reties see Appendix 5).
h) The MBH will give a written undertaking to the APNS, not to divulge the mutually agreed rates to any publication /agency/ MBH /clients. (See Appendix 6).
i) Every Year by January 31st the Media Buying House will renew its registration and pay Rs100,000/- as renewal fee.
4. An MBH shall be required to pay a sum of Rs.100,000 along with a list of its clients and the quantum of business placed by it to the member publications during the preceding year, for renewal of its Registration every year by January 31.
II. Authorization
5. To initiate placement of advertisements in member publications, the MBH will be required to go through a three-stage process, for every client, whereby listed clients and their accredited advertising agencies interact with the APNS, for the appointment of registered MBHs, to release advertising under specific rules. The process will be conducted as follows:
i) A Letter of Instruction is issued by a listed client to its accredited advertising agency, instructing it to appoint a registered MBH, to release advertising to member publications/media on its behalf, for a specified period of time or until further notice, at a rate of commission ranging between 2.75%-3.0%. (The text of this Letter of Instruction is in Appendix 2).
ii) A Letter of Appointment is issued by an advertising agency stating the agency's intent to appoint the specified MBH, on behalf of a listed client, for the period specified in a client's Letter of Instruction. Provided that if an agency is not agreeable to appointing an MBH, it will inform the client within 72 hours of the receipt of a Letter of Instruction by the client. The client then retains the option to initiate procedures for transferring his account to another accredited agency. (The text of this Letter of Appointment is included in Appendix 7).
iii) A Letter of Authorisation from APNS, will be issued, to both the advertising agency and the listed client, if the APNS is satisfied that procedures have been fulfilled with respect to the above mentioned two letters in its possession with respect to a listed client. Such letter will be circulated to all accredited advertising agencies, member publications, MBHs and the client concerned. On successful completion of this process, the MBH will be deemed to be authorised to release advertising on behalf of an agency for such specified client as the Letter of Instruction and the agency's subsequent Letter of Appointment indicate. (The text of this Letter of Authorisation is included in Appendix 8).
Provided that an agency, may at any time approach APNS to revoke its appointment of an MBH, either with due course or upon receipt of a Letter of Instruction from its client, ordering such revocation. In the event of receipt of such a Letter of Instruction from the client, the revocation will be mandatory and the APNS shall be informed immediately in writing, and thus the Letter of Authorisation listed in Clause 5(iii) shall be deemed to have been cancelled.
6. An MBH shall not provide services to government or government commercial organisations, because such business is already released to member publications at specially negotiated rates.
7. .An MBH may plan, negotiate, buy and release business of only those private clients, which are already listed with an accredited agency of the APNS. These clients will be required to place a minimum business of Rs. 5 million per annum in print media. An MBH shall not release business on behalf of non-accredited advertising agencies or of nonlisted clients to APNS member publications.
Ill. Releasing Advertising
8. An MBH shall issue a Release Order to a member publication, which shall include both the value of the advertisement released to the member publication at a Mutually Agreed Advertising Rate for that insertion (henceforth referred to as the MAAR), and such value as based on the Maximum Tariff Advertising Rate as listed in the printed tariff of the publication (henceforth referred to as the MTAR). An identical copy of this Release Order shall be provided to the client within 72 hours of its issue. A modified copy of this order, shall also be provided, within 72 hours of release, to the accredited advertising agency. But the modified copy shall contain only the MTAR and its corresponding value, and omit the MAAR and realised values. This will allow the advertising agency to be aware of the maximum liability incurred by the agency, as a result of the MBH's release order. It will also ensure the confidentiality of the MAAR as negotiated by the MBH on behalf of the listed client, for 30 days.
9. An MBH will issue a Monthly Statement within the first week of the following month to a listed client for all advertising released by it for such client in the previous month. (For the text of the Monthly Statement see Appendix 9). Such Monthly Statement shall contain the following information: the dates and reference numbers of relevant release orders, dates of insertion, and the corresponding values as listed under both the MTAR and the MAAR. A tally of the total advertising expenditures as incurred on the specified account for the previous month shall be stated. The MBH shall also send a modified copy of the Monthly Statement to the accredited advertising agency Such modified copy of the Monthly Statement shall contain all the information in the original Monthly Statement, but specifically omit the individual insertion order values realised under the MAAR. The consolidated value for the month realised under various MAARs will however be stated on the modified copy. (For the text of the modified Monthly Statement see Appendix 10). Such consolidated value should be countersigned by the client within 72 hours of receipt of the Monthly Statement and passed on to both the MBH and the advertising agency concerned. In event of a dispute between client and MBH, the matter must be referred within 72 hours of receipt of the Monthly Statement, by either or both parties to the APNS. The amount consisting of undisputed values shall be deemed to have been legitimately incurred and must be processed for payment under the rules. Any decision by the APNS with respect to disputed amounts shall be deemed final and binding as referred to in Clauses 18-20.
Provided that
i) In event of a dispute occurring between client and an MBH, the actual rate stated on the release order, i.e. MAAR if it less than the MTAR applicable, will be the rate so considered to compute a client and agency's liability. If there exists a discrepancy between the release order issued by the MBH and any subsequent MAAR mentioned on the monthly statement, the MAAR on the Release Order will be considered to be binding.
ii) In event of a dispute occurring between a member publication and an MBH, the MAAR stated on the release order, if it less than the MTAR applicable, will be the rate so considered to compute a client and agency's liability. If no MAAR is mentioned on the Release Order, then the MTAR will be deemed to be applicable and the client, agency and MBH will be deemed to be liable for the bills so incurred.
iii) In event of a dispute occurring between an MBH and an accredited agency, such dispute will be referred in writing to the APNS upon it being raised by either party. The Secretary General of the Society may either settle the matter to the mutual agreement of both parties, or the matter be referred by either party to the Arbitration Committee of the APNS.
iv) Notwithstanding anything contained above in points 9 (i-iii) any dispute may be taken by the aggrieved party/parties for arbitration to the APNS, where the guidelines mentioned in the 9 (i-iii) and any other decision by the APNS will be considered binding on ail parties to the dispute, whether represented or in absentia.
10. An MBH will be authorized to release business only to the extent of the brand(s) listed by APNS with the accredited advertising agency and as specified in the Letter of Authorisation, provided by APNS in favour of the MBH.
11. The financial liability for an advertisement released by a registered MBH on behalf of a specified client and an advertising agency as the consequence of the 3-stage process mentioned in Clause #5 shall rest with the MBH itself, the accredited advertising agency, and through them, with the client. Failure to make payment will result in action being taken against the MBH, the listed agency and the client under the rules of the Society.
IV. Billing and Payments
12. All bills raised by member publications in the name of the MBH, shall specifically mention the accredited agency with which the account is listed. Such bills will be sent to the MBH and will contain both the MAAR and the MTAR values. (For the text of the bill see Appendix 11). A modified copy of the bill raised by member publications will be simultaneously sent to the listed agencies but will contain only the MTAR values and specifically exclude the MAAR values. (For the text of such modified bill see Appendix 12).The MBH shall within 30 days of the date of publication of the advertisement send a copy of the bill received from a member publication listing both MTAR and MAAR values. The normal credit period for the accredited agencies will remain unchanged and be deemed to have begun upon publication of the advertisement. The responsibility for sending a copy of the bill received by the MBH to the advertising agency, additionally containing the MAAR values will rest solely with the MBH. Failure to send copies of such a bill including MAAR values may result in action by APNS if an agency reports a lapse on the part of an MBH in this respect.
13. All MBHs will be accorded a 2.75%-3.0% commission for ads released. The payment of commission to MBHs by accredited agencies will take place in accordance with procedures laid down in clause 14. No MBH shall claim, demand or receive any commission or compensation from a member publication beyond this specified rate.
14. Payment for advertisements released by an MBH will normally take place through a
2-cheque system made in the following manner: i) Up to 3% of the MAAR value will be paid by cheque/pay order in the name of the MBH, corresponding to the commission value stated in the Letter of Instruction issued under clause 5.1 and respecified in clause 5.2 ii) The balance shall be made payable in the name of the agency.
Both cheques in the name of the MBH and the agency will be sent by the client to the agency, but the cheque made by the client payable to the MBH should be delivered by the agency to the MBH within 48 hours of receipt. Failure to follow this deadline may result in action under the rules, which may in extreme circumstances lead to the client making direct payments of the MBH's commission to the MBH itself with the agreement of the APNS.
15. In extraordinary circumstances a client may insist on making payments for advertise ments directly to member publications. Such client may be required by the Society to provide a written undertaking or guarantee to cover the liability to the Society along with the documents listed under clause 5. The Society or if need be any of the member publications may refuse the provision of such credit without assigning any reason whatsoever.
If such a client is deemed acceptable for direct payment to member publications, the payment will be made strictly within a 60-day credit period by three different cheques as follows:
A cheque of 85% of the MAAR value in the name of member publication(s).
A cheque of commission, (not exceeding 3% of the MAAR value) as stipulated in clause 5.1 to be made in the name of the MBH.
A cheque of commission (not exceeding the 15% of the MAAR value minus the MBH commission) in the name of the accredited agency.
The three cheques from clients who insist on paying directly to member publications shall be forwarded, to member publications within 60 days of the date of publication of advertisements. Such member publications shall pass on cheques to the MBH and relevant agency in the prescribed mode within 48 hours of the receipt thereof. Failure to make payment in the stipulated period shall render the client to be blacklisted by the Society upon complaint from a member publication, an accredited agency or an MBH.
Provided that if a member publication fails to transmit such cheques paid by a client to an agency and/or an MBH within 48 hours he may be proceeded against as per the rules of the Society.
Any client that does not accept release, billing and payment procedures as stated in clauses 5-15 included, will not be allowed to release their business through a MBH arrangement.
V. Violations & Penalties
16. In case an MBH contravenes any of the rules and regulations of the Society (including the rules and regulations Registration and Conduct of Media Buying Houses including the present section), the Code of Conduct given at schedule 'B', the Code of Ethics given in the Articles of Association of the Society; or fails to respond to the directives of the Executive Committee, it will become liable to any one or more of the following actions against it:
a) Revocation of authorisation (s) with respect to a particular client or clients of the MBH..
b) A penalty equivalent to 15% of the MTAR value of the advertisement plus a fine equivalent to the gross cost of the advertisement at the WAR value. Publication of the advertisement in every individual member publication will be treated as a separate violation for the purpose of determining the fine.
c) Suspension of credit facility.
d) Reduction of commission by a certain percentage for a specified period, not exceeding 3 months.
e) Suspension of registration. The Media Buying House will not be restored untill the breaches and violations of Rules have been rectified and all the past dues of Member Publications have been cleared and a restoration fee of Rs. 30,000/- has been paid.
f) Encashment of bank guarantee.
g) Cancellation of registration.
If an accredited agency, whether under advice from its client or otherwise, has reason to believe that the professional behavior of the MBH with respect to the Agency's authorised client violates rules and regulations listed above, it may lodge a complaint with the APNS; or if in the opinion of the Secretary General there exists sufficient reason to believe that an MBH is conducting itself in violation of the rules of the Society, then in such cases a show cause notice will be issued to the MBH, and the MBH will be required to submit its explanation to such notice within 7 days. Upon receipt of such explanation, the Society through its Secretary General may take one or more of the actions stated in 16a-f. Provided that none of the actions contemplated in 16a-f would exceed a punishment period covering over 90 days.
17. If, in the opinion of the Secretary General, the lapse in conduct demonstrated by the MBH, is of a severe nature, he may initiate actions which could result in the enforcement of 16(g) i.e. cancellation of registration of an MBH. The Society, through its Secretary General, shall give ten days Show Cause notice to the MBH outlining the basis on which the cancellation of Registration is sought to be effected. The reply submitted by the MBH shall be placed before the next Executive Committee for its decision and such decision on the part of the Executive Committee shall be final and binding, including its substitution with one or more lesser penalties listed in 16a-f. Provided that during the pendency of the notice period, the Secretary General shall invoke the 16e i.e. suspension of registration and that during this period the MBH shall not be entitled to release any business to the member publications and no member publication shall accept business from such an MBH.
The registration of an MBH suspended in terms of clause 16 shall not be restored until the breaches and violations of rules have been rectified and a restoration fee of Rs. 15000 is paid to the Society.
VI. Disputes
18. If a client does not pay its dues with respect to an account or bifurcated account that client will as per APNS rules be suspended throughout APNS member publications for all advertising. No authorisations previously issued to MBHs, with respect to the suspended client, shall be deemed to be effective and an MBH will be blacklisted for all activities if it attempts to subvert suspension of such client.
19. If an agency is suspended, for non-payment along with its clients, all authorizations to the relevant MBHs for such clients will also stand suspended to the extent of their authorization. The MBH, however, may continue to release authorized advertising on behalf of other non-suspended agencies and clients.
20. All disputes pertaining to advertisements in the form of placement, production and reproduction will be dealt by the MBH with the media in writing with a copy marked to the APNS and the accredited agency. Disputes pertaining to rates will be governed as stated in Clause 9.
VII. Liability
21. In event of default by a client or an agency with outstanding amounts owed to member publications, an MBH shall be deemed liable for complete payment of all advertising released by it and as yet unpaid. The MBH will not however be deemed liable for the outstanding bills of an agency or client, in the release of whose advertising it was not involved.
VIII. Miscellaneous
22. The Registration of an MBH shall automatically stand terminated on the winding up of the Company, as the case may be, and also on bankruptcy or cessation of advertising practice. Provided, however, that in case an MBH is proposed to be restructured necessary steps shall be taken by the existing directors to seek necessary approval from the Society for the continued registration of such MBH. The decision of the Society in this respect shall be deemed final and binding. The Media Buying House in case restructuring /Change of Name, shall notify to the society alongwith required documents and a fee Rs.200,000/-
23. All changes in the ownership or management of an MBH shall be communicated forthwith to the Society which shall have the right to review, through its Executive Committee the continued Registration of the MBH. The decision of the Executive Committee in this regard shall be final.
24. The Society shall have the power to amend, alter, delete, abrogate and substitute from time to time and as it deems desirable, all direct and indirect strictures with respect to the Rules and Regulations governing the registration and conduct of MBHs and such amendments, alterations, abrogations, deletions and substitutions shall be binding on all authorized MBHs from the date such rules are enforced by the Society.
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