WASHINGTON -- The House Energy and Commerce Committee yesterday approved a revised bill to stiffen federal regulation of the government securities market, ending a stalemate that had held up action on the measure for months.

The bill, passed by unanimous voice vote, is a compromise worked out by Rep. Edward Markey, D-Mass., with officials of the Treasury Department and the Securities and Exchange Commission. It may be brought up for a final vote in the full House before the end of the month, one aide said.

The Senate has already approved a rival bill that would set fewer requirements for government securities dealers. However, Markey pointed out yesterday that his legislation has the support of the Treasury and the SEC, giving it clout going into any negotiations with the Senate. Markey is the chairman of the telecommunications and finance subcommittee.

"I think the Markey bill goes further in trying to curb some of the abuses that existed, although we understand the regulatory agencies are trying to do more work in this area," said Betsy Dotson, assistant director of federal liaison for the Government Finance Officers Association.

Committee Chairman John Dingell, D-Mich., said the bill provides additional protection for small investors in government securities without being "disruptive to the industry."

The bill is the result of longstanding efforts by Markey and other House members to strengthen federal rules for the government market in the wake of the Salomon Brothers Inc. trading scandal and other abuses that have since come to light. It is an approach that rubs raw with many dealers, who say federal agencies have already taken steps to open up the government market and strengthen market surveillance of daily trading activities.

The bill would permanently extend the Treasury's authority to set rules for market participants. That authority lapsed on Oct. 1, 1991, leaving current rules in place. But the Treasury has indicated it is interested in issuing new rules to raise capital standards for government dealers and set requirements for large capital withdrawals.

Other provisions in the bill are more controversial. For example, it would allow the National Association of Securities Dealers to write sales practice rules. Unlike the Senate measure backed by Sen. Christopher Dodd, D-Conn., any rules written by the NASD would not be subject to a Treasury veto.

To strengthen market surveillance, firms with large positions in the market would be required to file a report with the Federal Reserve Bank of New York to assure compliance with Treasury rules. Reports would have to be filed by dealers as well as hedge funds and institutional investors.

Markey said the change will help identify "short squeezes" in which buyers try to corner a large supply of an issue and drive up prices.

Another controversial requirement calls on dealers to maintain electronic records of all transactions for possible use by the SEC to reconstruct trading.

Markey's original bill gave authority to the SEC to write record-keeping rules for firms. Under the new bill, the SEC would use existing authority to collect records from registered broker-dealers under its jurisdiction, while the Treasury would issue identical rules for other firms.

Rules prescribing internal controls against fraud would be written by the SEC for registered dealers, while bank regulatory agencies would have jurisdiction over bank dealers.

By limiting SEC jurisdiction over the market in terms of record keeping and other areas, House aides said, Markey hopes to avoid the kind of turf fight that erupted last year with Banking Committee Chairman Henry Gonzalez, D-Tex. That fight led to a defeat of Markey's original bill in a showdown vote on the House floor.

Markey's bill also drops a requirement contained in his original bill giving standby authority to the SEC to adopt price disclosure rules if private vendor services are found to be unsatisfactory. Instead, the commission would report annually on price disclosure issues to Congress.

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