Banning MPs from employing relatives "could be the right thing to do", says the chairman of the committee for standards in public life.
Mr Conway apologised after being reprimanded
Sir Christopher Kelly said the Derek Conway case was "undoubtedly a very serious breach of Parliamentary rules".
He said he understood calls for a complete ban but said it could also be a "rather harsh answer to the problem".
Mr Conway had the Tory whip withdrawn on Tuesday, after being criticised for overpaying his younger son Freddie.
Mr Conway apologised unreservedly to MPs for "administrative shortcomings" and any "misjudgements".
There is nothing to stop MPs employing members of their families, and it is thought that more than 40 do.
In a statement Sir Christopher said it was "certainly an area which needs review" - but said he wanted to see what Parliament proposed to do before deciding whether it was a case for his committee to look into.
But he said Mr Conway's case "further undermines public trust in our politicians".
He added: "I understand why there are calls for rules to ban MPs employing members of their families, and indeed, there are international precedents for doing this, and it could be the right thing to do.
"However, it could also seem a rather harsh answer to the problem.
"An alternative approach would be to insist on greater transparency and proper monitoring of existing requirements which is generally better than creating new rules and prohibitions."
Mr Conway was reprimanded by the Commons Standards Committee after "no record" was found of Freddie Conway's work for him as a researcher.
The student was paid more than £40,000 for his three-year employment period.
The committee said he should pay back up to £13,161 of the amount paid to his son from his Parliamentary allowances and be suspended from the House of Commons for 10 days.
There have also been questions over his employment of his elder son Henry Conway.
Tory leader David Cameron withdrew the party whip from Mr Conway on Tuesday, excluding him from the Conservative group of MPs at Westminster.
On Wednesday he indicated that he supported calls for greater transparency about who MPs employ in their offices.
Asked about MPs' previous attempts to block such data, he told the BBC: "All MPs, if asked questions about who they employ in their offices, should give straightforward, clear and transparent answers.
"I'm very happy to tell you who's employed in my office. All MPs should be ready to answer that question. This is public money; people have a right to know who you employ in your office.
"If you get asked a question, you should give a straightforward answer."
And Labour's former foreign secretary Margaret Beckett, who has employed her husband Leo for 30 years, said there were good reasons for some MPs to do so.
She told the BBC: "I would never get anybody who would work the hours I do, which he does, or do all the things that I do, for any salary - I mean, he gets paid less than anybody else in my office. He knows that is the deal."