Taiwan will ease rules to allow Chinese banks to buy bigger stakes in local banks and permit more Chinese firms to invest in its financial industry, the island’s financial regulator said on Monday, marking a major advance in cross-strait ties.

Taiwan will allow mainland banks to buy as much as 15 percent in unlisted local bank and financial holding companies, the China Banking Regulatory Commission (CBRC) and the Financial Supervisory Commission (FSC) said in a joint briefing.

The stake allowed to be invested in a financial holding’s banking unit will be raised to 20 percent. The rules will take effect in 60 days.

There were no specific stake limits for either category previously, but 5 percent was seen as a cap for regulators.

In exchange, CBRC will speed up the review process to allow Taiwan banks to open a second unit in the same city in the mainland, a CBRC official said.

“This is a big breakthrough,” said the CBRC official. “We’ll see Chinese banks applying for buying a stake in Taiwan banks in future,” he said, without offering details.

Moves to bolster ties in Taiwan-China financial sectors have lagged similar efforts in manufacturing and other areas owing to Taiwanese concerns over Chinese influence.

China still claims the self-ruled island as its own territory and reserves the right to use military force to reclaim it, though economic ties have broadened rapidly and a free trade agreement links the two sides.

The higher limits are expected to be well received by some local banks and investors. Taiwan’s banking sector is crowded and highly competitive, with about 37 local banks serving the island’s 23 million population, and they have little in the way of overseas operations to fuel growth.

Taiwan’s banking sector share index has surged by more than 20 percent since November, largely on expectations that cross-straight investment rules would be eased and local banks would be allowed to expand more quickly on the mainland.

“Cathay Financial, Chinatrust Financial and Ta Chong Bank, which is controlled by the Carlyle Group, and some other smaller banks could attract Chinese interest,” said Albert Hsieh, an assistant vice president at Shinkong Asset Management Co.

Cathay is Taiwan’s biggest privately-run finanical holding firm, while Chinatrust is its biggest credit card issuer. EnTie Bank, controlled by private equity fund Longreach Group, is also seen as a possible candidate for Chinese investment.

Global private equity firms like Carlyle and Longreach have had a tough time exiting their bank investments in Taiwan amid disagreements over valuations.