The Securities and Exchange Commission's enforcement division is considering major changes, including whether to ask Congress for stiffer penalties for market abuses and whether to provide more legal protection for companies and individuals under investigation.

Enforcement chief John M. Fedders said yesterday that his office has embarked on long-range studies aimed at examining the process through which the SEC conducts its investigations and examining whether the penalties it may assess are adequate.

"If the commission's 'public'--investors, the corporate community, securities industry professionals, attorneys and accountants--believes that the staff is inattentive to due-process concerns, we cannot expect this 'public' to assist us in the enforcement of the securities laws," Fedders told a conference of the New York State Society of Certified Public Accountants.

To underscore the SEC's respect for due process, Fedders said he has initiated a study of each aspect of the procedures by which the SEC initiates, conducts and closes investigations or begins an enforcement action, as well as how the SEC provides information on investigations to the press.

The division will consider whether the commission should require that every prospective defendant be given an opportunity to present his or her own version of the facts--except in emergency situations where immediate action is essential--when the enforcement division recommends action against him or her.

The study also will cover when and how subpoenas should be drafted and enforced, how specific SEC formal orders of investigation should be, whether each order of investigation should have an automatic expiration date and whether those under investigation should be informed when investigations are closed without enforcement action.