Gold prices and other benchmarks have come under scrutiny, with banks fined $6 billion for rigging the Libor interest rate, used to price a range of financial products. Allegations are also emerging of potential rigging of currency markets.

Four banks — the Bank of Nova Scotia, Barclays, HSBC, and Societe Generale — talk twice a day to each other on the telephone to "fix" the gold price that is used as a benchmark across the world.

Parliament's Treasury Select Committee asked David Bailey, head of markets infrastructure and policy at the Financial Conduct Authority, if there was collusion in setting gold prices.

"It is possible but I have no clear evidence that that has actually happened," Bailey said.

The FCA is one of several regulators from across the world which have fined 10 banks and brokerages for rigging Libor. It is also probing the $5.3 trillion a day foreign exchange market for possible manipulation and Bailey said "we continue to progress our work".

"All benchmarks I think are susceptible to people attempting to manipulate them. They are susceptible to a variety of conflicts of interest," Bailey said.

It was up the market how benchmarks are set but any reform to the process should comply with new principles on controls and governance set by global regulators and the FCA, Bailey added.

The lawmakers repeatedly expressed concern over how the gold price is set by banks, but Bailey said the FCA had no legal authority to regulate the price-setting process.

A public review is underway on whether gold and other benchmarks should come under the remit of the FCA, as has Libor.

The watchdog has studied the gold fix and fined Barclays 26 million pounds for failures in internal controls that allowed a gold options trader to manipulate the setting of gold prices.

Alberto Thomas, a partner at consultancy Fideres, told the committee in separate testimony that his firm's research suggested the gold fix may have been manipulated between 10 percent and 30 percent of days between 2010 and the end of 2013.

SHARE PRICES TOO?

Bailey said he has not listened in to the twice-daily gold fixing calls as some lawmakers expressed surprise that the calls could last up to an hour, with customers of the banks also able to dial in.

"This is a flawed and manipulable market," committee member John Mann said.

"We do not regulate the gold fix," Bailey replied.

The London Bullion Market Association is currently evaluating the results of a market consultation on a possible replacement to the gold fix and is likely to make an announcement in coming days.

Another committee member, Mark Garnier, said that attempts to manipulate the closing prices of shares was "common knowledge" and a "well-known secret" among traders going back years.

"This is widely spoken about among equity traders across the world. If nothing else, it's market abuse surely?" Garnier said.

"We are all amazed that these closing equity prices have not been looked at," committee chairman Andrew Tyrie added.

Bailey said he would check if any action has been taken.