As an example, he said, a fund dedicated to socially responsible investment can use software screening to immediately get alerted if one of its holdings buys a stake in a non-SRI investment, such as a cigarette or casino company.
The wildcard that looms for rates is whether the settlement that the SEC made with six former directors of the Morgan Keegan mutual funds foreshadows similar type of enforcement, experts say. It’s rare for the regulator to go after individual directors, they say, and if this type of enforcement becomes more common it could impact insurance coverage and rates.