Two more foreign banks have announced they will set up branches in the Shanghai Free Trade Zone to tap into the opportunities under the financial reform being tested in the area.

HSBC Holdings Plc and Bank of East Asia said they had received approval from the authority to operate in the 28-sq-km FTZ, after the pilot area was officially unveiled on Sept 29.

HSBC and BEA followed Citigroup and DBS, which were the first two foreign banks to get a green light to operate in the FTZ.

According to the development plan by the State Council, or China's cabinet, the Shanghai FTZ will be a test field for further financial reform. Analysts said such measures may include market-oriented interest rates.

But it is not yet clear what operations will be allowed for foreign banks in the FTZ as details of reforms were not released. HSBC said its FTZ branch will start operations in the beginning of 2014.

Shanghai Securities News reported on Monday that the People's Bank of China, the central bank, will release details of FTZ financial reform soon. Shares of local companies in Shanghai rallied on the news with 20 stocks reaching their daily upper limit.