The Financial Supervisory Commission, the island's top financial regulator, is expected to brief parliament before the new measures can take effect, an official at the said commission without elaborating.

The move follows a financial memorandum of understanding signed between Taiwan and China last year aimed at paving the way for closer cooperation in banking, insurance and securities.

The United Daily News said the measures will be effective as soon as next week although the two sides will decide how many mainland banks will be able to invest on the island during upcoming talks on a planned major trade pact.

About five banks, two brokerage firms and five insurance companies from the mainland are likely to be qualified for investing in Taiwan, the report said.

Taiwan hopes to sign the pact, known as the Economic Cooperation Framework Agreement, with China in May or June to help boost economic growth and employment. The first round of negotiations on the pact took place in January.

Beijing still considers the island part of its territory, vowing reunification even if it has to use force. The two sides split in 1949 after a civil war.

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