Funding Delay Is Keeping SEC From Full Policing : Securities: The agency suspended all nonessential services after a hold was placed on a Senate bill.

Securities and Exchange Commission offices in Los Angeles and around the country were largely unable to maintain full policing of the nation’s securities markets for a second day on Tuesday as the agency’s funding was held up in the Senate.

SEC Chairman Arthur Levitt Jr. was forced to suspend all the agency’s nonessential services Monday, causing a cut in travel expenses and subsequently delaying examinations of mutual funds, brokerages and investment advisers. Investigations are normally conducted by SEC lawyers, but the agency’s workers have been confined to their desks since Monday.

In the SEC regional office in Los Angeles, examiners were forced to reschedule appointments and postpone program work, administrator Elaine M. Cacheris said. “We’re doing our best to keep our programs functioning,” she said.

Congressional sources told the Associated Press that Sens. Orrin Hatch (R-Utah) and Kay Bailey Hutchison (R-Tex.) had ordered a hold placed on a bill to provide full funding for the SEC. Senate and SEC staff members, speaking on condition of anonymity, told the AP that the two senators were attempting to place an unrelated tax amendment on the bill, which has been approved by the House.

Levitt sent a letter to the Senate on Tuesday citing problems at his agency since the hold was imposed.

“I am deeply distressed that the interests of U.S. investors and U.S. corporations are being jeopardized because (the bill) has not yet been approved by the Senate,” Levitt wrote.

Levitt said in his letter that six SEC staff members were forced to return from the examination of a brokerage firm in Tennessee and that the inspection of a $250-million investment adviser was canceled, both within a 24-hour period.

The funding hold also resulted in reduction of the fees the SEC collects when companies register stocks and bonds with the government, amounting to a daily loss of $740,000. The money usually goes to the federal Treasury.

The SEC also said it will have to discontinue Edgar, its popular electronic filing system, by Oct. 11 if funding is not restored. That action would affect 3,400 companies that depend heavily on the system for corporate filings.

Of the $305 million requested by the SEC for the 1995 fiscal year, Congress has appropriated only $125 million because of a dispute between House Democrats and Senate Republicans over whether the SEC should be self-funded through its own fees.