AUSTIN, TX -- 07/23/08 --
According to market statistics analyzed by S3
Matching Technologies, the SEC's emergency order to enhance investor
protections against "naked" short selling in 17 financial institution
securities has reduced short sells by about 70 percent for the targeted
symbols, and 90 percent of short selling of Fannie Mae and Freddie Mac
securities. S3, which processes trades for the country's largest
brokerages, compared short sells of Monday, July 14, prior to the SEC
order, and Monday, July 21, the first day the emergency rule was
implemented.
"Looking at the data from our clients," said Jack Holt, CEO of S3 Matching
Technologies, "it seems clear the market responded to what regulators
wanted. Short sells, 'naked' or not, have accounted for a little over 1
percent of our clients' total volume. 2/3rds of that short sell volume
disappeared on the first day the rule went into effect. For Fannie Mae and
Freddie Mac, it's more dramatic at 90 percent."
The SEC's emergency rule identified symbols critical to stability of the
financial markets and ordered that the securities be delivered at the time
short sells were settled. According to S3's Holt, analysis of his
company's data shows the emergency rule appears to have all but eliminated
the short selling of Fannie Mae and Freddie Mac securities, two
institutions that many analysts feared were at risk of collapse.
"The short sell slowdown during the first day was very significant across
the targeted symbols," Holt added. "While there is no way for data to
reveal if a short sell is 'naked,' there's no doubt the SEC has put a rule
in place that has drastically reduced short selling, especially with
regards to the Fannie Mae and Freddie Mac mortgage institutions."
S3 Matching Technologies processes about 15 billion financial transactions
daily and provides business intelligence reports on more than a million
securities trade orders and stock options.
About S3 Matching Technologies (www.S3.com)
S3 is an Austin, Texas-based company focused on providing data quality
management software for the IT, telecom, financial services, and healthcare
industries. S3 invented TeraMatch®, an algorithmic matching engine which
uses rules-based scoring based on industry-specific best practices. S3's
software may be deployed as a managed solution.
CONTACT:
S3 Matching Technologies
James Moore
Email Contact
512.300.9232
