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Advertising is the lifeblood of most commercially-financed television and radio broadcasting in the UK, delivered primarily by broadcasters licensed by Ofcom under the 1990 and 1996 Broadcasting Acts. These broadcasters are bound by their licences to comply with various content standards, including advertising standards, and to comply with any directions made by Ofcom which result from a broadcaster failing to comply with such standards. The public expects high standards of broadcast advertising and of its regulation.

During 2004, Ofcom is intending to contract out the regulation of broadcast advertising content to a self-regulatory system under the banner of the Advertising Standards Authority ('ASA'), which would operate in a co-regulatory relationship with Ofcom. The system would be comprised predominantly of three new organisations: ASA(B), BCAP and Basbof. The purpose of this Memorandum of Understanding (the 'MOU') is to reflect the scope, nature and operation of the relationship between Ofcom and those bodies in the advertising industry, ASA(B), BCAP and Basbof which will together carry out the day-to-day regulation of broadcast advertising as agreed on Ofcom's behalf.

The MOU sets out undertakings and principles agreed between Ofcom, ASA(B), BCAP and Basbof (hereinafter referred to as 'the Parties'; and ASA(B), BCAP and Basbof as the 'Co-regulatory Parties'). It is framed in the context of ensuring that consumers, viewers and listeners can have continued confidence in the standards of broadcast advertising under the new arrangements. The Parties share a mutual interest in that overriding goal.

In agreeing to contract out certain of its functions (which, at present, remains subject to Parliamentary approval) to a new self-regulatory system - built on the long-established and valuable non-broadcast advertising experience of the ASA, suitably adapted - Ofcom is placing confidence in the structures and safeguards agreed between the Parties. It is also expressing confidence in the ability and will of all the Parties involved, not least those managers and staff carrying out the work on a daily basis, to deliver in spirit as well as in substance what is required to make the new system work effectively and efficiently.

The Parties do not intend this document to be legally binding, and this document shall not create any legally binding duties or obligations between the Parties. Any duties or obligations which are to have legally binding effect will be set out in separate legally binding contracts which may be drawn up between some or all of the Parties as necessary. They, together with the proposed De-regulation and Contracting-out Order ('the DCOA Order') and the proposed Ofcom authorisation made under the DCOA Order ('the Authorisation'), will form the legal basis of the new self-regulatory system (as explained in the 'Legal Context of the MOU' section below).

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