Conferees Will Seek a Compromise Bill on Futures Trading : Legislation: But experts believe chances for early agreement are slim.

WASHINGTON —  Senate and House lawmakers will meet today to try to hammer out an agreement on two separate bills that would stiffen regulation of the nation’s huge futures markets.

The bills would be Capitol Hill’s first major response to a 1989 scandal that shook the credibility of Chicago’s two big futures exchanges--the world’s biggest.

But the two measures must be consolidated into a single piece of legislation before they can become law.

Industry and government sources believe that prospects for speedy progress are dim, saying more than two years of work on the legislation could slip into 1992 without a deal in place.

“They’ll move on some of the smaller items, but I don’t hear anything on the big issues,” said one industry lobbyist who requested anonymity.

The futures market began in commodities as a means of allowing traders to buy and sell goods at a specific price at a future date. More recently, the futures concept has been applied to financial instruments such as stocks, bonds, currencies and interest rates.

In 1989, 46 brokers, traders and assistants at the Chicago Mercantile Exchange and Chicago Board of Trade were charged with fraud and racketeering. Roughly half pleaded guilty or were convicted, while juries failed to reach verdicts in several other cases.

The bills, which have been passed by the two houses of Congress, would tighten futures trading rules, stiffen penalties and pump more money into the Commodity Futures Trading Commission, the chief futures market regulator.

The bills would also impose sweeping reforms on futures exchanges by stepping up market surveillance and tightening record-keeping requirements for trades. Brokers would also face trading restrictions.

But differences exist over insider trading.

The Senate version also addresses regulation of so-called hybrid trading products that combine elements of futures and securities instruments as well as instruments that allow borrowers to swap things such as interest payments.

Both these highly technical instruments, which the House bill fails to address, are used by institutional investors and corporations to protect against sharp swings in prices, interest rates and exchange rates.

Congressional sources held out the possibility that both sides could make concrete progress toward a compromise that would be acceptable to both the House and Senate.

But industry officials were more skeptical, saying the best negotiators could hope for would be an agreement on a timetable for proceeding in the future.

The Senate bill was held up for about 2 1/2 years in a dispute between the futures and the securities industries over who should control sophisticated new trading products.

Senators approved a compromise last spring under which hybrid instruments would be classified by the CFTC, depending on what they most resemble. The agency would use a formula to make the determination.

Instruments classified as securities would be regulated by the Securities and Exchange Commission, while those considered futures would be left to the CFTC.

The Senate bill also would for the first time allow futures products to trade outside a formal exchange. Under current law, futures instruments must trade on an exchange.

The Senate would give the Federal Reserve the authority to oversee margins for stock-index futures, hybrid products that allow investors to speculate on the direction of leading share indexes.

Margins are the upfront money required to trade.

The central bank would be allowed to delegate its authority to the CFTC, however.

The House version leaves the authority for regulating margins with the futures exchanges. The bill also has broader provisions against insider trading.