Shanghai unveiled a five-year plan to reform its locally-based state-owned financial companies to turn them into leading nationwide enterprises as the city aggressively transforms itself into a global financial hub by 2020.

The city has issued a guideline to propel reforms of local state-owned financial companies, said the Shanghai Financial Services Office on Thursday.

Shanghai will deepen reforms in state-owned financial institutions under its supervision to ensure they have ample capital, have strict internal risk controls, are strong innovators and are highly efficient.

The measures include reforming recruitment procedures at state-owned financial institutions. For most institutions, the senior management team, with the exception of top executives, should be hired in line with best market practices. The senior management's salary packages should be based on the market and be decided by the board of directors.

The reform process will cover 16 local state-owned financial companies with total assets of 2.45 trillion yuan (359 billion U.S. dollars).

Some institutions such as Shanghai Pudong Development Bank are locally supervised while Shanghai-based Bank of Communications is under the supervision of the central authorities.

Shanghai also encourages leading financial firms to set up business in the city through mergers and acquisitions.

The financial office supervises the state-owned financial assets on behalf of the local state-owned assets supervision and administration commission.