The U.K. government Tuesday launched a consultation process on how it can make the London market an onshore domicile for insurance-linked securities business.

Interested parties have until April 29 to respond to the paper, which asks questions about the design of a trading platform that would meet the market’s needs.

Among other things, the paper asks respondents to comment on whether ILS investments should be restricted to sophisticated investors, whether a secondary trading platform will be needed to facilitate the growth of an ILS market in the United Kingdom, and whether protected cell company mechanisms would help develop an ILS market.

The paper notes that in 2014, a report by the London Market Group, which represents insurers, reinsurers and brokers in the Lloyd’s of London and London company insurance market, had highlighted the rising use of alternative risk transfer as a threat to the London market’s position as a specialist insurance and reinsurance hub.

Last year, U.K. Chancellor George Osborne announced that the government would explore ways to create a competitive corporate and tax environment to encourage an ILS market in London.

The London Market Group welcomed the publication of the consultation paper.

“This is great progress in the first of LMG’s initiatives in creating an environment in which innovation can thrive in the London market,” said Malcolm Newman, CEO of Scor S.E.’s Paris-London hub, chairman of the International Underwriting Association and sponsor of the LMG’s ILS working group.

“ILS has brought new capital and solutions to the market, and we want London to be the center for the future development of this business,” he said in a statement.

“The market has a wealth of experience to offer government to help develop the detail behind some of their proposals, for example their experiences of dealing with other regulatory regimes around the world, which might guide the regulatory debate,” he said.

“The government has listened to our requests and responded very proactively. It is now time for the insurance sector to play its part to help bring ILS business onshore to the London market,” Mr. Newman added.