Financial market transparency has been a major focus for regulators after evidence of price manipulation in lending rates between banks with the LIBOR scandal in 2012.

A clearing platform or an exchange could increase liquidity in the London gold market, and make it cheaper for users, analysts said.

Twenty entities have submitted 17 responses to a Request for Information (RFI) process, the LBMA said in a statement.

Two sources close to the process said an electronic platform to report gold daily turnover could be the first step towards making the London over-the-counter market more transparent.

"The RFI process can help the LBMA to introduce the level of market transparency expected following the FEMA (Bank of England's Fair and Effective Markets Review) report," consultancy EY's FinTech director Martin Watkins said.

"This will require the implementation of new transaction reporting services with market participants."

The responses will be evaluated by a group made up of market makers including HSBC (>> HSBC Holdings plc), JP Morgan (>> JPMorgan Chase & Co.) and other banks and firms involved in the bullion market. EY has been appointed to support the process.

Daily transactions in London, the traditional home of global gold trade, are settled directly between dealers as opposed to settled and cleared on an exchange.

The LBMA, which represents banks, refiners and dealers, currently only reports net volumes settled between five clearing members, including Barclays (>> Barclays PLC) and Scotiabank (>> Bank of Nova Scotia).

But these volumes, put at $185.70 billion in the first nine months of 2015, are just a snapshot of the annual $5 trillion of gold trades estimated to be made over the counter in London.

The lack of figures on trading makes the market 'opaque' and its size difficult to estimate.

"It will be interesting to see which areas there is strong market demand for the LBMA to focus on next," Watkins added.

The U.S. derivatives bourse Intercontinental Exchange (>> Intercontinental Exchange Inc), the London Metal Exchange and the Chicago Mercantile Exchange (>> CME Group Inc) have responded, various sources said.

All three exchanges declined to comment.

Another source said OTC technology provider EBS, part of interdealer broker ICAP (>> ICAP plc), Autilla and London clearing house LCH Clearnet have also supplied information on potential services. The companies were not immediately available to comment.

An LBMA spokesman said an update on the process is expected in January 2016.

(Reporting by Clara Denina, editing by Adrian Croft)

By Clara Denina