WASHINGTON -- House lawmakers remain divided over a possible compromise version of legislation backed by Rep. Edward Markey, D-Mass., to regulate the government securities market, congressional aides said yesterday.

Aides said Rep. Henry Gonzalez, D-Texas, the chairman of the House Banking Committee, has not yet come to terms with Markey on the compromise bill. As a result, it remains to be seen if Markey will be able to avoid the same bruising jurisdictional squabble with Gonzalez that killed the bill last year.

"We don't have a deal at this point," said one House aide. "We are continuing to talk, and hopefully something will be worked out."

Moreover, it is unclear whether Markey has won the support of the Treasury Department for his controversial measure, despite his offer to make changes on several major provisions.

Markey's bill, the Government Securities Reform Act of 1993, won approval last week from the Energy and Commerce Committee's subcommittee on telecommunications and finance, which Markey chairs. Supporters are hoping to get the bill through the full committee before the congressional recess, which is tentatively set to begin Aug. 6.

Markey met last week with Frank Newman, undersecretary for domestic finance at the Treasury Department and with Mary Shapiro, acting chairman of the Securities and Exchange Commission, to discuss ways to make his bill acceptable to both agencies.

Markey favors expanding the role of the SEC in helping to police the government market, a position that drew opposition last year from the Treasury as an unnecessary intrusion on its role as the chief authority for policing the market.

Sources confirmed that a compromise floated last week by Markey would drop a provision giving the SEC backstop authority to give bond pricing information to market participants. Instead, the agency would file an annual report on the subject.

Bond market participants have routinely assailed the idea of giving the SEC any authority over price disclosure, arguing that private data services available now to dealers and buyers are adequate.

Markey is also said to have agreed to give the Treasury permanent rule-making authority over the market. The current bill would only extend such authority, which lapsed Oct. 1, 1991, until Oct. 1, 1997. Without action, existing rules for government auctions are in place, but the Treasury is unauthorized to issue any new rules.

Sources agreed, however, that Markey and Gonzalez remain at odds over a major provision that would require dealers to maintain records of their transactions to permit surveillance and enforcement by the SEC.

Last year, Gonzalez insisted that bank regulators should have record-keeping and other authority over bank dealers, while Markey insisted that a primary role for the SEC was needed to assure uniformity and avoid regulatory confusion.

An industry source following the negotiations said he was encouraged that House lawmakers will resolve their differences. "From what I'm hearing about this compromise," he said, "it's very close to being made into public law."

Still, even with passage of legislation in the House, there will have to be an accommodation with the Senate, which has its own version backed by Sen. Christopher Dodd, D-Conn. Dodd's bill does not contain a provision requiring record keeping by dealers.

The Senate Banking Committee approved the legislation in late May, and aides are hoping to have the measure brought up for a Senate vote before the August recess.

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