The FMLC has published a letter from Joanna Perkins, FMLC Chief Executive, to Olivier Guersent, Director-General, DG FISMA, concerning the proposed Regulation on indices used as benchmarks in financial instruments and financial contracts (Benchmark Regulation).  The FMLC is concerned at the potential impact of Article 19 of the Benchmark Regulation on FX rate sources used for non-deliverable forward (NDF) contracts referencing emerging markets currencies (EMCs), arguing that if FX rate sources are not excluded or exempted from the Regulation, it is unlikely that the administrators of those rates would be able to comply with the mandatory governance requirements set out in the Regulation. It states that, if the final text of the Regulation prohibits supervised entities from using FX rate sources, there will need to be a significant realignment of market practice. This may lead to possible disruptions to a large number of outstanding FX contracts and a significant negative effect on wholesale markets.