Securities and Exchange Commission Chairman David S. Ruder urged Congress yesterday to give the federal agency authority to restrict the role of states in governing corporate takeovers.

In his first appearance before Congress since becoming SEC chairman, Ruder said the Supreme Court, in an Indiana case earlier this year, went too far in giving states the right to restrict hostile takeovers. While the SEC typically has supported a free market for corporate control, state takeover statues, including the Indiana law that the court upheld, have given takeover targets expanded power to defeat unwanted bids.

Ruder said that since the Indiana case, involving CTS Corp., eight states have adopted statutes similar to Indiana's and three more are considering legislation. He said the state statutes impose so many obstacles to takeovers that they interfere with the ability of stockholders to freely trade their shares.

"Shareholders of target companies should have a free market in the sale of their shares," Ruder told the House subcommittee on telecommunications and finance. "The {state} ... statutes have the potential for interference in that area. I would like to see you give us rule-making power so we could have the power to make a rule preempting these statutes."

The Indiana statute and some of the others impose restrictions on the ability of new shareholders to vote during takeover fights. The voting restrictions give greater power to stockholders who owned shares prior to the launching of a takeover bid, making successful completion of a hostile takeover more difficult.

The antitakeover statutes that Ruder opposes typically are adopted by state legislatures at the urging of corporations concerned about becoming takeover targets. The corporations often wield considerable political clout in states where they are major employers.

Ruder's request to expand SEC rule-making authority is one part of a broader debate over the proper balance between state and federal rules governing takeovers. Ruder wants the SEC to have greater power to preempt state law whenever, in the judgment of the SEC, it interferes with the nation's securities markets.

Nevertheless, Ruder said the SEC does not want authority to regulate antitakeover devices such as the poison pill and greenmail because, in his opinion, these should be regulated by the states. Traditionally, state laws have focused on internal matters of corporate governance, while the SEC has protected investors, and the nation's securities markets, by regulating the behavior of bidders in takeover contests. That balance has been upset by the Supreme Court's blessing of broader state antitakeover statutes.

"The commission must and should have powers to affect preemption of state laws when the national market is threatened," Ruder said.

Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee and a key legislator in the takeover debate, said yesterday he wished Ruder had not asked for broader SEC authority. "It is complicated enough," Dingell said. "I don't need additional complication."

Ruder said the SEC also favors other changes in the rules governing corporate takeovers, including change in the 13 (d) rule, which requires an investor group to disclose holdings of 5 percent or more of a public company within 10 days. The 10-day window has been used by some bidders to amass larger stakes before disclosing their holdings.

Ruder said the SEC favors requiring investors to disclose their 5 percent stakes within five days, with a "standstill" provision that would prevent them from increasing their holdings beyond 5 percent until they make a public filing