Monday, 10 February 2014

Ministry Guidelines for TV Rating service in India

Ministry of Information and Broadcasting (Govt. of India) has introduced policy guidelines to operate television rating service in India. These guidelines shall be applicable to all rating agencies providing television rating service in India and shall come into force after 30 days from the date of issuance of the same.   These guidelines are as follows:
Eligibility Criteria
  • The applicant seeking  to provide television rating service in India shall first need to register with Indian Companies Act, 1956.
  • At the time of application, all companies are required to make full disclosure about their Shareholding Agreements, Loan Agreements and any such other agreement that are finalised or are proposed to be entered into. Any subsequent change in these agreements would be disclosed to the Ministry of Information and Broadcasting, within 15 days.
  • The companies in their Memorandum of Association (MoA), are required to mention rating service and market research as one of its prime objective. Any activity like consultancy service or advisory service, which can create a conflict of interest, shall not be included into Memorandum of Association.
  • Any member of the Board of Directors of the television rating company shall not be in the business of broadcasting/ advertising/advertising agency.
  • The Company shall have a minimum net worth of Rs 20 crores. The net worth shall be calculated as per the prescribed Performa and shall be certified by the Statutory Auditor of the company.
  • No single company shall have substantial equity holding in rating agencies and in broadcasting agencies. No single company shall have substantial equity holding in more than one rating operating in the same area. The cross holding restriction will also be applicable in respect of individual promoters besides being applicable to legal entities.

Basic Conditions And Obligations
  • The Company, all Directors on the Board of the Company and such key executives like MD / CEO, CFO, CSO. COO as may be specified by the Ministry of Information and Broadcasting from time to time, shall require being security cleared from the Ministry of Home Affairs, Government of India.
  • In case of appointment for the post of Directors on the Board of the Company and such key post like MD/CEO, prior permission of ministry of Information Broadcasting shall required. Companies shall also take prior permission from the Ministry of Information and Broadcasting before making any changes in the Board of Directors  
  • In order to ensure that company compiles with the provisions of these guidelines, the applicant companies shall furnish two separate Bank Guarantees (BG) of Rs 25. lakhs and Rs. 75 lakhs before the issuance of registration, in format designed by MIB. The validity of the guarantees shall be 10 years from the date of issuance.  
  • The Company shall ensure its continued eligibility as applicable throughout the period of registration and adhere to provisions of these guidelines, failing which; action will be taken against the company as specified.
Complaint Redressal Mechanism
All rating agencies are required to establish an effective complaint redressal system as mentioned below:
  • Establishment of Call Centre: With the commencement of its operations rating agencies shall establish one or more Call Centres for the purpose registering complaints and redressal of complaints. It's obligatory to the rating agencies to give wide publicity about the Call Centre immediately on the establishment of such Call Centre.
  • Procedure for handling complaint by Call Centre: Rating agency shall ensure that  immediately after receiving complaint, shall registers such complaint by allotting a unique identification number to be called docket number and inform the same to the complaint
  • Time limit for redressal of compliant: Rating agency shall take necessary steps to address all queries or redress complaints within 7 days of receipt of such complaints.
  • Appointment or designation of Nodal Officer: It's mandatory for the rating agencies to appoint or designate one or more Nodal officers for the purpose of grievance redressal and companies should give wide publicity about appointment of such Nodal Officers.  
  • Redressal of Grievances by Nodal Officers: In case if the compliant ant is not satisfied with the redressal of the grievance by the Call Centre, such person may approach to Nodal officer  for the grievances in writing a letter or through telephone or filling online complaints.
  • Time limit for redressal of complaints by Nodal Officer: The Nodal Officers shall resolve or redress the complaints within ten days of the registration such complaints
  • Appellate Authority for redressal of complaints: Rating agencies shall establish an Appellate Authority for redressal of complaints in case a complainant is not satisfied with the redressal of his grievance by Nodal Officer. Appellate Authority shall dispose of complaints within 15 days from the receipts of appeal.
  • Records of Complaints: Rating agencies shall keep record of all complaints with them, such record shall include docket number, name and address of complainant, date and time of filing complaint, type of complaint and redressal date and time and the written confirmation from the consumer that the complaint has been redressed.  

Sale And Use Of Ratings
  • The rating agencies shall be required to adhere to the following norms related to sale and use of ratings:
  • The rates for rating data shall be non-discriminatory and transparent and the rate card for rating data shall be published in the public domain by the rating agency.
  • The data generated by the rating agency is made available to all interested stakeholders in a transparent and equitable manner.
  • Use of such data to be governed by the terms and conditions specified by the rating agencies 

The rating agencies are required to disclose the following information on its website:
Ownership pattern of the rating agencies, including foreign investment/joint venture/associated in the agencies.
  • Quality control procedures with respect to all external and internal operations which may reasonably be assumed to exert significant effects on the final results.    
  • Full information about coverage in terms of geography and society
  • Detailed rating methodology.
  • Quarterly/Annual audit reports.
  • Complaint redressal statistics.
  • Comments/viewpoints of the users of the rating data.
Reporting Requirement
The rating agency shall annually report to the Ministry of Information and Broadcasting on following aspects:
  • Equity structure, share-holding pattern including foreign investment/joint venture/associates in the rating agency.
  • Details information about key executives and Board of Directors.
  • Details of coverage of rating services.
  • Subscription and revenue details.
Requirement For Audit
  • The rating agencies are required to set up an internal audit mechanism for ensuring that guidelines issued by the Government are being followed. This audit system conducted quarterly and their report shall be placed on their website. The expenses of audit shall be borne by the concerned television rating agency.
  • The Ministry of Information and Broadcasting or TRAI reserves the right to audit the systems/procedures/ mechanisms of the rating agency.

Action Upon Non Compliance Of Guidelines
  • Non-compliance of guidelines on cross-holding, methodology, secrecy, privacy, audit, public disclosure and reporting requirements shall lead to forfeiture of both Bank Guarantees in the first instance, and, cancellation of registration  in the second instance.
  • Any action taken against the rating agencies on the violation of guidelines by the Central Government shall be taken only after giving a written notice to the company to show the cause for the proposed action/ cancellation of registration.  

Procedure For Application And Grant Of Registration And Renewal
  • All applicants seeking registration shall apply to the Secretary, Ministry of Information & Broadcasting, in triplicate, in the prescribed Performa along with a registration fee of Rupees 10 lakhs. If the applicant is found eligible, the application will be send to Ministry of Home Affairs for security clearance of the company. Thereafter the Ministry of Information and Broadcasting will issues registration to the applicant for generating television rating in India.
  • Renewal of registration will be considered for a period of 10 years at a time subject to the company acceptance of all terms and condition of registration as the Government may prescribe. 

Transfer Of Registration
For transfer of registration, prior approval of Ministry of Information and Broadcasting is mandatory. Ministry of Information and Broadcasting on written request from shall allow transfer of registration in case of merger/demerger/amalgamation. Such transfer would be done in accordance with the provisions of the Companies Act.


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