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Mumbai, Feb. 27: The babble has finally burst.

Capital market regulator Sebi today cracked down on the three-second cackle at the end of television advertisements put out by mutual funds that supposedly warn investors not to be taken in by all the glib talk that precedes it.

The caveat, which must be carried at the end of every advertisement, reads: “Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.”

The trouble is that mutual funds have used fast-talking men and some nifty sound compression technology to telescope the words into barely intelligible prattle.

In a notice issued today, Sebi said: “The rapid-fire manner in which the standard warning… is recited in the audio visual and audio media renders it unintelligible to the viewer/listener.”

The regulator directed that starting April 1, all mutual funds would have to slow down the dialogue delivery and ensure that it stretched for at least five seconds.

Most mutual fund ads have voiceovers who blitz through the caveat in three seconds.

But here’s something that is even more interesting: ad firms admit they use technology to speed up the tape.

The market regulator hasn’t been amused by the torrent of words. But it has taken it close to three years to wake up to the telly twaddle.

An ad spot is usually 20 to 30 seconds long — just barely enough to highlight the features of the scheme and make it stand out in a clutter of competing schemes.

“Most of the mutual funds, including Reliance Mutual Fund and UTI Mutual Fund, spend about three seconds in their advertisements to read out the warning message. ICICI Prudential Mutual Fund is possibly the only company that delivers the warning message at a slower speed and spends about four seconds on this portion,” an advertising executive told The Telegraph.

In the initial years, mutual funds weren’t required to carry the caveat. After a few years, the risk statement popped up in print ads.

It was only about four years ago that the market watchdog made it mandatory for advertisements on television or radio to carry the warning.

Although this has all the sounds of a flimflam, many reckon that mutual funds weren’t really trying to hoodwink investors with the pitter-patter. There was a genuine commercial reason behind it.

“An ad spot is usually for 20 to 25 seconds. If we had to increase the time by another three seconds to carry the caveat, the overall advertising cost could go up by at least 15 per cent.

“Although this is an excellent move by the regulator from the investors’ point of view, the decision is bound to hurt the profitability of asset management companies. Instead of making changes at the superficial level, the regulator should direct changes at the investment level,” said an official with a leading mutual fund company.

The fast-talking voiceover usually gets paid between Rs 7,000 and Rs 10,000 per ad spot.

“It normally takes five to six seconds for an ordinary English-speaking person to read the warning message. After the voice is recorded, we use a software called Nuendo to compress the time to suit the ad’s requirement. To maintain the quality of the voice, the pitch and clarity, a six-second message cannot be compressed beyond three seconds,” said a sound engineer who has worked on mutual fund ads.

P.P. Bajaj, Ninad Kamath, Rahul Mulani and Nikhil Kapoor are some of the people who have lent their voices to these ads. “You could do it, too,” said an advertising executive.