Breaking news-DJ SEC's "Naked" Short Rule May Hurt All Short Sales

NEW YORK, July 16 (Dow Jones) --The Securities and Exchange Commission's efforts to close a loophole allowing "naked" short-selling of stock will create a headache for brokers and clients seeking to make legitimate bearish bets. Starting Monday, the SEC will require that traders have formal arrangements in place to borrow shares before shorting Fannie Mae (FNM), Freddie Mac (FRE) and 17 other financial institutions. The biggest effect may be to create an extra step for the broker-dealers that facilitate short sales by clients and thereby slow down the pace by making the market less efficient.