Shanghai has applied to regulators to launch a free exchange between the yuan and the New Taiwan dollar to enhance financial cooperation, the head of the Shanghai Financial Service Office said Sunday.

"With growing trade between Shanghai and Taiwan in recent years, we hope that a free exchange between the yuan and the New Taiwan dollar can be conducted in Shanghai as a trial," said Fang Xinghai at the 6th China International Finance Forum.

"We have applied to the regulators and expect it will be approved soon," Fang said at the two-day forum which ended Sunday.

Shanghai has recently launched a cross-border currency clearing system and Fang expects that it will be extended to Taiwan soon.

By the end of April, Taiwan had invested $5 billion in more than 6,000 projects in Shanghai, and trade between the two sides totaled $13.68 billion in the first eight months of this year.

"The Shanghai Stock Exchange is making efforts to introduce ETFs based on overseas equity indices (and) we can also expect Taiwan and the mainland to introduce ETFs based on each other's index," Fang said.

The two sides can also cooperate in sectors that are not directly supervised by the central government, such as venture capital.

"Taiwan is very successful in the venture capital sector, while the Chinese mainland is still in the first stage. Policies have now been eased so that Taiwan VC firms can set up branches on the mainland," Fang noted.

The Chinese mainland and Taiwan in April sealed a cooperative financial regulatory mechanism.