A memorandum of understanding (MOU) signed by the financial regulatory authorities of the Chinese mainland and Taiwan took effect on Saturday, paving the way for financial cooperation across the Taiwan Strait.

The MOU focuses on supervisory cooperation in fields of banking, securities, futures and insurance. It provides for thresholds and preferential policies for both sides to enter each other's market.

The MOU is expected to bring about new bank branches, stake subscription and acquisition chances for the two sides' investors in each other's market.

Following the MOU, seven Taiwan bank offices in the mainland can be upgraded as branches. They have operated in the mainland for more than two years.

Many mainland banks also expressed wishes to open branches in Taiwan, including the Bank of China (BOC), Industrial and Commercial Bank of China, China Construction Bank and China Merchants Bank, according to the Taiwan authorities.

Zhao Rong, the BOC spokeswoman, said the bank had already completed the preparatory work for establishing its Taiwan branch.

The bank would submit its application documents as soon as detailed regulations regarding financial cooperation between the mainland and Taiwan come out, Zhao said.

The Taiwan authorities also relaxed requirements for mainlander to invest in Taiwan's stock market.

And for the initial stage, the aggregate ceiling capital for investments into Taiwan stock market by mainland's qualified domestic institutional investors (QDII) should not exceed US$500 million, said the Taiwan authorities on Friday.