UPDATE 1-Taiwan may sign China fin pact within mth -source

* Taiwan says MOU could be signed in Taipei, Beijing

* Taiwan's financial shares up 46 pct this yr on China hopes (Adds comments, details)

TAIPEI, Nov 3 - Taiwan expects to sign a much-anticipated financial services pact with China within the month, a Taiwan government official said on Tuesday.

The official, speaking on condition of anonymity, said the memorandum of understanding (MOU) could be sealed by the end of November or early December.

Both sides have agreed not to insist on where to sign the pact, which covers cross-strait supervision of banking, insurance and brokerage industries, the official said, adding that the deal could be signed in both Taipei and Beijing.

"We think there is a good chance the MOU will be signed before the election," the official said, referring to the island's magistrate election slated for early December.

Calls to the Taiwan Affairs Office in Beijing went unanswered.

After a decades-long freeze, trade relations across the Taiwan strait have thawed markedly since China-friendly President Ma Ying-jeou took office last year.

The MOU is expected to create ties between China's and Taiwan's financial markets. Bilateral deals promoting tourism and shipping links have already been concluded.

Taiwan's financial shares <.TFNI> have gained 46 percent year to date amid investor optimism the MOU would help Taiwan banks tap the fast-growing Chinese market.

The island's broader stock index <.TWII> was up 60 percent during the same period.

"It is an entry ticket to mainland China," said Nora Hou, analyst at Deutsche Securities. "What's more important is for the MOU to be signed as soon as possible, rather than how they sign it." ($1=T$32.6)