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* Deutsche's resignation leaves four banks to set goldbenchmark; two for silver
* FCA 'nervous' to stipulate participant numbers forbenchmarks
* Could step in if there is a risk of 'market dislocation'
By Clara Denina and Susan Thomas
LONDON, April 29 (Reuters) - Britain's financial watchdogcould intervene if there are too few participants to setcommodity benchmarks including gold and silver, a seniorofficial at the Financial Conduct Authority (FCA) said.
U.S. investors and traders have filed almost 20 antitrustlawsuits against the five banks involved in the London gold fix,accusing them of colluding to manipulate the bullion price.
One of them, Deutsche Bank, resigned from thegold and silver fix tables on Tuesday, just three months afterputting its seat up for sale, after failing to find a buyer.
Sources told Reuters the lawsuits had deterred potentialbuyers.
Deutsche's resignation leaves Barclays, HSBC, Bank of Nova Scotia and Societe Generale to set the gold benchmark.
Just HSBC and Bank of Nova Scotia remain to set the silverprice benchmark.
FCA head of enforcement and financial crime Tracey McDermottsaid while the regulator would be nervous about stipulating thenumber of participants needed to set benchmarks on commodities,including for gold and silver, it could step in if there was athreat to the market.
"These (benchmarks) are things that exist for the benefit ofthe market, so the market should be looking for market-basedsolutions to make sure it is still viable," McDermott told theReuters Financial Regulation Summit in London.
"But if there is a risk of dislocation because people arewithdrawing and we think that breaches or is a risk to ourobjectives then we would set that as one of our activities butit is not entirely straightforward."
The gold fix - a benchmark widely used across the industry -is set twice a day by five banks that get together over thetelephone to work out a standard price for the metal based ontransactions between their clients.
MORE QUESTIONS
Banks have come under increasing scrutiny by regulators inEurope and the United States after the London Interbank OfferedRate (Libor) was rigged by British banks.
Deutsche Bank and some of its peers have taken a batteringover a series of scandals and inquiries regarding manipulationof interest rates and foreign exchange.
This has also raised questions about the other four banksthat currently participate in the gold fix.
The FCA has visited the offices of Societe Generale, thisyear's chair at the London gold fix table, to observe the process and gather information, two sources with knowledge ofthe matter said.
The regulator is planning to speak "to the others that areinvolved in exactly the same fixing process", one of the sourcessaid.
McDermott said on Monday that the FCA visited firmsfrequently in the normal course of business and a visit was notnecessarily an indication of wrongdoing.
"But benchmarks are clearly something where we are expectingto see quite a lot of focus on in the next couple of years,looking ...at how people adopted the IOSCO principles, and arethey controlling these risks going forward."
After the Libor scandal in 2012, the InternationalOrganisation of Securities Commissions (IOSCO) - a globalumbrella group for market regulators - detailed a series ofprinciples with which any institution providing a financialbenchmark should comply. It set a deadline of July 2014.
The Gold Fixing Company, which represents banks involved inprice settlement, is undertaking a review to ensure the gold fixcomplies with those benchmark principles.(For other news fromReuters Financial Regulation Summit, click on http://www.reuters.com/summit/FinancialRegulation14) (Editing by Veronica Brown and William Hardy)
