Taiwanese regulators are moving faster than expected to allow local financial institutions access to the mainland market and may scrap a rule capping investments by insurance firms, according to a report. The island's Financial Supervisory Commission plans to allow banks to make direct investments in mainland counterparts and will drop a rule limiting investments by insurance firms to a maximum of 10 per cent of their capital, Reuters quoted Taiwan's Economic Daily as saying. Banks, brokerages and insurers on both sides of the straits are counting down to Saturday, when a memorandum of understanding (MoU) signed two months ago by financial regulators in Taipei and Beijing officially comes into effect. The memorandum does not spell out specific rules and regulations for cross-strait investments, which is left up to the respective regulators. But it is similar to agreements the mainland has signed with 36 countries and regions globally since joining the World Trade Organisation in 2001. 'The MoU itself doesn't have that much detailed regulation on cross-strait banking and services,' Goldman Sachs analyst Enoch Fung said. 'It's more like an admission ticket for Taiwan and China banks to gain access to each other's market.' The memorandum, signed in November, is the latest in a series of measures from Taipei aimed at boosting economic ties across the straits since Beijing-friendly President Ma Ying-jeou took office in May 2008. The agreement is likely to result in several near-term liberalisations. Taiwan banks are expected to receive permission to upgrade their representative offices on the mainland to full-fledged branches. Taiwanese financial firms may be allowed to make equity investments of up to 33 per cent in joint venture mainland brokerages, according to Fung. He said Taiwan banks could also potentially take direct stakes in their mainland counterparts of up to 20 per cent, and would probably be able to make direct investments without going through overseas subsidiaries. For mainland companies, the memorandum paves the way for investments in the Taiwanese stock market under Beijing's Qualified Domestic Institutional Investor (QDII) framework. The ceiling for mainland firms investing in Taiwan will be raised to 10 per cent of assets under management, up from 3 per cent. The immediate impact of mainland investments on the Taiwan markets would be modest. Beijing currently caps the total quota of QDII funds available for all markets at US$10 billion.