SHANGHAI - The Chinese economic hub of Shanghai is expected to roll out a regulation to better protect the rights of Taiwan investors and boost trade between the two regions.

The standing committee of the Shanghai Municipal People's Congress on Monday reviewed the draft regulation, which stipulates that no institutions are allowed to conduct checks on Taiwan companies in the city unless they are empowered by the law and regulations to do so.

Taiwan investors' companies should not be charged with extra fees compared with their local counterparts, the draft says.

It says that Shanghai encourages Taiwan investment in the Shanghai Free Trade Zone in financial, shipping, trade, cultural services and advanced manufacturing.

In addition, incentive policies will be offered to new Taiwanese-invested financial institutions in Shanghai.

Shanghai is a magnet for investment from Taiwan, with more than 10,000 registered companies funded by Taiwan investors as of 2014.

In 2009, the mainland's first arbitration center for Taiwan investors was set up in Shanghai.