The Securities and Exchange Commission is investigating whether currency traders at major financial institutions distorted the prices of options and exchange-traded funds by rigging benchmark foreign-exchange rates, Bloomberg News reports.

Citing “two people with knowledge of the matter,” Bloomberg notes that, while preliminary, the investigation expands on existing inquiries launched by European and the U.S. regulators into possible currency market manipulation. Yet another unnamed source told Bloomberg that the Commodity Futures Trading Commission, which regulates foreign-exchange derivatives, is also looking into potential market manipulation.

So far, according to Bloomberg, regulators in Europe and the U.S. have contacted at least a dozen banks with regard to allegations that dealers shared information about client orders in order to manipulate the benchmark spot rates for currencies.

Derivatives make up more than half of the daily $5.3 trillion foreign exchange market; spot transactions account for the balance.

Members of the British parliament are scheduled to question Bank of England Governor Mark Carney Tuesday following the central bank’s release of minutes showing that senior traders there had raised concerns about the possibility that currency benchmarks were being manipulated as far back as July 2006.

Bloomberg notes that the entry into the case by the SEC, which oversees certain options and ETFs tied to the rates, demonstrates how such manipulation could have major impact on a range of financial products.

ETFs—bundles of securities that typically track an index, are listed on an exchange and are required to register with the SEC— have grown to about $2.4 trillion in assets.
“The price of currency derivatives— swaps, options and futures—used for ETFs have the spot price embedded in it, so if the spot price is incorrect due to manipulation, then it will impact the price of the ETF,” Portfolio Solutions LLC founder Rick Ferri told Bloomberg News.

Citigroup Inc., Barclays Plc and Deutsche Bank AG are among the currency-trading institutions that have fired, suspended or put on leave a total of more than 20 traders, while Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc have announced their own internal investigations into the possible market manipulating behavior, Bloomberg News reports.