The Securities and Exchange Commission and a House subcommittee chaired by Rep. Edward J. Markey (D-Mass.) are locked in a dispute over the release of a confidential SEC study concerning computer-directed program trading during a highly volatile day in the stock market last January.

The dispute has taken on increased significance since the release last week of a presidential report that blames the October stock market collapse on a handful of large institutional investment firms that sold shares through computer-directed trading strategies.

While the SEC wants its study to remain confidential so the agency will have ready access to information from stock exchanges and investment firms in the future, Markey's House telecommunications and finance subcommittee is considering releasing the document on the grounds that the public interest would be served by full disclosure.

Some SEC staff members are upset because the study was provided to Congress under an agreement designed to maintain its confidentiality. Other sources say Markey is interested in generating publicity by releasing the confidential study; they add that some Markey staff members are visiting foreign financial markets and that Markey intends to call for a global stock market conference in the near future.

"The point is we are not anxious to have that document and its sources made public because of the desire to encourage people to come forward with confidential information," SEC Chairman David S. Ruder said yesterday. "It is particularly important during this market investigation time that we are able to have free access to sources of information in the brokerage community.

"We have had a long policy here of cooperating with Congress, providing documents to them on a confidential basis. We do so with the understanding with the congressional committees that these documents will not be disclosed."

But Markey and his staff members argue that the dispute with the SEC is nothing more than a classic Washington confrontation between a federal agency and Congress over confidentiality. Staff members argue that the precise wording of their confidentiality agreement with the SEC indicates the final decision about the study's release rests with Congress.

"The SEC clearly has an interest in the maintenance of confidentiality of all documents which they may transmit that are of a proprietary nature," Markey said. " ... Certain information should be in the public domain and rightfully belongs in the public domain. ... There is a basic tension between the SEC's belief that it needs to classify information as confidential to keep the cooperation of the exchanges and Congress' right to put into the public domain embarrassing information."

The document in question is an SEC study of stock market trading on Jan. 23, 1987, when stock prices gyrated wildly, in part due to computer-directed program trading strategies. These strategies can involve the simultaneous trading of stocks and stock index futures contracts, such as the Standard & Poor's 500 index. The stock index futures represent broad stock market averages; investors utilizing computers can lock in profits by, for example, simultaneously selling the individual stocks that make up the index and buying the index futures.

However, such trading, known as stock index arbitrage, and other related strategies can cause extreme gyrations in stock prices. The study in question contains information provided to the SEC by the New York Stock Exchange and includes details about at least one investment firm, according to Larry Sidman, chief counsel and staff director of Markey's telecommunications and finance subcommittee.

Sidman said a June 23 letter from the SEC to the subcommittee said the following concerning confidentiality of the document: "We understand that, absent extraordinary circumstances, it is not the committee's practice to publicly disclose such information without prior consultation with the commission and that you will follow this procedure in this instance."

Sidman said that on the basis of that language, he notified the SEC of the subcommittee's desire to release the document. He said he is considering the SEC's arguments about confidentiality and that no final decision had been made.

"There was never a promise {that} ... we will always keep it confidential," Sidman said. "It is our call."