(Yicai Global) Oct. 31 -- The Shanghai office of the People's Bank of China will explore a regulatory sandbox system for fintech startups to test new ideas under the watchful eye of regulators to control risks. 

Before securing licensing, fintech startups should set up local labs under the guidance of authorities to evaluate and hone their business models based on feedback, according to a document that the Shanghai bureau of the PBOC released recently. 

Shanghai encourages domestic and foreign financial institutions to set up shop in the eastern city and to leverage the preferential policies offered by the Shanghai Pilot Free Trade Zone, as well as its new addition, Lingang, the document added.

Editor: Emmi Laine