Shanghai Mayor Han Zheng yesterday unveiled the city's first financial arbitration body, which would handle business disputes and boost the city's image as a financial hub.

The Shanghai Court of Financial Arbitration, an independent arm under the Shanghai Arbitration Commission, will deal with financial disputes, including rows over insurance, futures, stocks and financing.

The arbitration body's decision is final and has the same effect as a ruling made by a court.

"To build the city into a financial center requires a sound legal environment, and a system on handling financial disputes is a key component," said Lu Fang, director of the new system.

A mature arbitration system can help attract overseas investors as they require a fair, efficient and international-standard legal system, officials said at a meeting in Pudong New Area.

"China's existing legal system is not capable of handling some complicated financial cases," said Fang Xinghai, director of the Shanghai government's financial services office.

"In order to promote the city's financial innovation industry and create more financial products, improved legal services are necessary to prevent potential risks and enhance the city's attraction for overseas firms," Fang said.

The arbitration body, which has 78 arbitrators who are financial experts, lawyers, professors and retired judges, can deal with complicated and financial disputes and the process is not revealed to the public in order to protect business secrets.

Zhang Ning, director of Shanghai bureau under the China Securities Regulatory Commission, said she encouraged brokerages to choose the arbitration court as disputes over stocks have increased in recent years.

"Disputes in the capital market involve a lot of parties such as investors, financial organizations and securities firms, which are more complicated and need a more efficient legal system," Zhang said.

China has signed the "Convention on the Recognition and Enforcement of Foreign Arbitral Awards," and its arbitration results are accepted by more than 150 countries and regions.