Ofcom received complaints about the broadcast
Adult TV channel Television X - The Fantasy Channel has been fined £25,000 by the media watchdog for broadcasting "highly explicit sex material".
Portland Enterprises, which owns the channel, was fined for breaking Ofcom's code on showing "adult-sex" content.
Ofcom received complaints from rival broadcasters about the channel's content one evening in June last year.
It showed two naked female presenters - known as "babes" - engaged in sexual acts, including the use of sex toys.
Subscription TV channels are allowed to broadcast so-called "adult-sex" content between 10pm and 5.30am, provided they meet certain criteria.
The channel must have a PIN protected encryption system, or other equivalent protection, and there must be measures in place that ensure that the subscriber is an adult.
Television X - The Fantasy Channel also transmits a number of 10-minute free-to-air trailers.
Ofcom ruled the channel broke rules on 8 June 2007 by broadcasting "adult-sex" material during a free-to-air slot, and material judged to be the equivalent of R18-rated film during the encrypted segment.
Material deemed to be R18 - or highly explicit sex material - is prohibited under the Code.
Broadcasters are also expected to apply "generally accepted standards" to provide adequate protection for members of the public from offensive material, and must ensure that potentially offensive material is justified by the context.
Ofcom also found the channel to be in breach of these rules.