The three federal agencies with an interest in regulation of the government securities market have agreed that, if Congress wants to pass legislation, it should require that all unregulated securities dealers be forced to register with the government and that these dealers should be subject to rules similar to those that apply to regulated dealers.

But the Securities and Exchange Commission and the Treasury Department apparently differ over which of the two agencies should register heretofore unregulated securities dealers.

The Federal Reserve Board, which already regulates about 36 so-called primary dealers in government securities, would continue to oversee the primary dealers. Sources said the Fed does not want to oversee the currently unregulated securities dealers.

In the last several years, there have been a number of spectacular failures of unregulated government securities traders. The losses triggered hundreds of millions of dollars of further losses among institutions that did business with the traders -- including savings and loan associations, municipalities and some smaller banks.

The failure of E.S.M. Government Securities Inc. in Florida last March led to the collapse of the state-chartered, privately insured network of savings and loan associations in Ohio. One Ohio institution, Home State Savings Bank, lost so much money as a result of its dealings with E.S.M. that it threatened to deplete the entire Ohio Deposit Guarantee Fund. Depositors then launched a run on other ODGF-insured institutions.

The Ohio experience caused a "silent run" on several large privately insured Maryland savings and loans last month that erupted into a full-scale run on a number of institutions insured by the Maryland Savings-Share Insurance Corp.

The joint approach of the Treasury, Federal Reserve and SEC was outlined in a document presented to the SEC commissioners yesterday. SEC staffers said that not all three agencies are equally convinced that new legislation is necessary, but have agreed on the joint approach if Congress decides to pass legislation.

The recommended legislation would require the Treasury -- the agency that issues most government debt securities -- in consultation with the Fed to issue the rules governing currently unregistered dealers, which would include capital adequacy, audit and record-keeping requirements. Agencies Back Regulation Of All Securities Dealers By James L. Rowe Jr. Washington Post Staff Writer

The three federal agencies with an interest in regulation of the government securities market have agreed that, if Congress wants to pass legislation, it should require that all unregulated securities dealers be forced to register with the government and that these dealers should be subject to rules similar to those that apply to regulated dealers.

But the Securities and Exchange Commission and the Treasury Department apparently differ over which of the two agencies should register heretofore unregulated securities dealers.

The Federal Reserve Board, which already regulates about 36 so-called primary dealers in government securities, would continue to oversee the primary dealers. Sources said the Fed does not want to oversee the currently unregulated securities dealers.

In the last several years, there have been a number of spectacular failures of unregulated government securities traders. The losses triggered hundreds of millions of dollars of further losses among institutions that did business with the traders -- including savings and loan associations, municipalities and some smaller banks.

The failure of E.S.M. Government Securities Inc. in Florida last March led to the collapse of the state-chartered, privately insured network of savings and loan associations in Ohio. One Ohio institution, Home State Savings Bank, lost so much money as a result of its dealings with E.S.M. that it threatened to deplete the entire Ohio Deposit Guarantee Fund. Depositors then launched a run on other ODGF-insured institutions.

The Ohio experience caused a "silent run" on several large privately insured Maryland savings and loans last month that erupted into a full-scale run on a number of institutions insured by the Maryland Savings-Share Insurance Corp.

The joint approach of the Treasury, Federal Reserve and SEC was outlined in a document presented to the SEC commissioners yesterday. SEC staffers said that not all three agencies are equally convinced that new legislation is necessary, but have agreed on the joint approach if Congress decides to pass legislation.

The recommended legislation would require the Treasury -- the agency that issues most government debt securities -- in consultation with the Fed to issue the rules governing currently unregistered dealers, which would include capital adequacy, audit and record-keeping requirements.