One other important aspect to be considered was the framework for domestic location requirements for systemically important facilities. Early in the policy process, a key question was the extent to which we should allow our domestic market to be cleared by an overseasbased CCP. After careful consideration, it was decided not to insist on domestic incorporation.
Although a financial stability argument might be made for such a requirement, the regulators took the view that it could risk market fragmentation and might not be sustainable in a rapidly changing global market. Instead, the council has developed a graduated framework for imposing additional regulatory requirements depending on the importance of a cross-border CCP to the domestic economy and financial system.