A divided Securities and Exchange Commission voted yesterday to move ahead with a proposal that would force hedge fund advisers to register and open their books for inspection.

The commission voted 3 to 2 to consider stiffer oversight of the largely unregulated hedge fund industry, which manages pools of capital solicited from wealthy individuals and institutions. SEC leaders estimate that hedge funds control about $850 billion in assets, a number that could reach $1 trillion by the end of the year.

The proposal -- which has drawn fire from industry as well as the chiefs of other federal agencies -- will be released for 60 days of public comment, after which the SEC will take a final vote on whether to make it effective.

SEC Chairman William H. Donaldson, a strong backer of the plan, cited the role of hedge funds in mutual fund trading abuses and decried "an almost total lack of information" about such basic facts as how many hedge funds operate in the United States.

The proposal would force fund advisers with more than 14 investors and $25 million under management to complete registration forms that include information about their expertise and disciplinary record.

"We cannot keep resources of this type in the shadows," said Democratic Commissioner Harvey J. Goldschmid.

But critics, including two Republican commissioners who voted against the proposal, said the registration plan was unfocused. Commissioner Cynthia A. Glassman called the plan "premature . . . and another example of form over substance" in the SEC's continuing fight to get out ahead of problems before scandals ignite.

"I will not ask taxpayers to foot the bill for a fishing expedition carried out to protect the very rich," Commissioner Paul S. Atkins said.

Instead, Atkins and Glassman said, the agency should focus its limited resources on policing mutual funds, in which 95 million Americans invest.

Hedge fund trade groups, as well as Federal Reserve Chairman Alan Greenspan and Treasury Secretary John W. Snow, have expressed concern about the SEC proposal. They say the agency already has the authority to sue hedge funds and their advisers for fraud and suggest that registration may be the prelude to more intrusive regulatory action on hedge funds down the road.

The current proposal would give SEC examiners new power to conduct "mini-sweeps" of hedge funds and would force the funds to hire officials to monitor compliance with securities laws. SEC leaders said about 40 percent of the nation's estimated 8,000 hedge funds already register voluntarily.

The Senate Banking Committee will hold a hearing today on hedge fund oversight issues, at which proponents from both sides are scheduled to appear.

SEC Chairman William H. Donaldson joined the agency's two Democrats in voting for a proposal that would add regulation to hedge funds.Commissioner Paul S. Atkins describes his opposition to the proposal. He called it "a fishing expedition carried out to protect the very rich."