WASHINGTON - Legislation that would permanently extend the Treasury's authority to regulate the government securities market was quickly approved by the Senate last week.

The bill, sponsored by Sen. Christopher J. Dodd, D-Conn., was passed unanimously late Thursday. A rival House measure with tougher provisions for securities dealers, sponsored by Rep. Edward J. Markey, D-Mass., is snarled in a dispute with Banking Committee Chairman Henry B. Gonzalez, D-Tex.

The Treasury's authority to regulate the government market lapsed Oct. 1, 1991, preventing the department from issuing any new rules. In a floor statement, Dodd said that has kept the Treasury from considering rules related to capital standards, risk assessment, and customer protection.

In addition, Dodd's bill would lift the current ban on sales practice rules, and would prohibit dealers from making false written statements in Treasury auctions or in other offerings of government securities.

The bill directs the Treasury, the Securities and Exchange Commission, and the Federal Reserve Board to study how well private data services provide information on prices and volume to market participants.

Markey last week was said to be considering a compromise bill that, like the Senate legislation, would permanently extend the Treasury's rule-making authority in the market. Originally, Markey only wanted a bill to extend such authority until Oct. 1, 1997.

Markey was also said to be willing to drop a provision in his bill giving the SEC backstop authority to collect pricing information from market participants if private data services are found inadequate. Instead, the commission would be directed to study the issue.

However, Markey's bill retains a provision that would require firms with large positions in the market to file reports with the Federal Reserve Bank of New York. It would also require firms to maintain records of transactions that could be made available electronically to the SEC.

And as yet, there is no word if Gonzalez and Markey have resolved their differences over the scope to be given the SEC in regulating the market. Last year, Gonzalez insisted that bank dealers should be regulated by their respective federal agencies.

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