Short sells drop in firms after SEC rule--S3 data

NEW YORK, July 22 (Reuters) - Short sales declined 90 percent in shares of mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) after an emergency short-selling rule took effect, market data firm S3 Matching Technologies said on Tuesday.

Short sells declined 70 percent in shares of the 17 other financial firms targeted by the rule, S3 said. The firm said it compared short sale data from July 14, prior to the U.S. Securities and Exchange Commission emergency rule, to Monday July 21, the first day the rule took effect.

S3, processes data for Wall Street dealers, brokerage houses and financial institutions of all types, seeing about 15 billion financial transactions per day. (Reporting by Emily Chasan; Editing by Tim Dobbyn)