The Shanghai Stock Exchange has secured approvals from regulators to set up an international trading center in the free trade zone, the chairman of the bourse said on Saturday.

The move could pave the way for more foreign investors to tap the world's fourth-largest stock market by capitalization and also for foreign companies to issue shares in the world's second-largest economy.

Gui Minjie, chairman of the exchange, said significant progress has been made in recent years allowing Chinese firms to list on overseas markets. However, no foreign firms are allowed to issue shares on Chinese bourses.

Speaking to reporters at the sidelines of a National People's Congress session in Beijing, Gui said the exchange was preparing a team to study ways to develop the trading platform.

China opened the Shanghai free trade zone on September 29 to fuel development of the country's financial services sector.

Beijing has said that it would allow a trial of a fully convertible yuan capital account in the zone, sparking hopes for an easing of controls that bar foreign firms from raising capital through initial public offerings.