TAIPEI, Sept 16 (Reuters) - Taiwan's financial regulator

rejected on Monday a takeover attempt by financial conglomerate

CTBC of rival Shin Kong saying its plans

were incomplete.

CTBC made an unexpected bid for Shin Kong last month,

upending a proposal for Shin Kong to merge with another peer,

Taishin. Shin Kong has said it views Taishin as its

preferred bidder.

Taiwan's financial services industry is domestically focused

and fragmented, and Taishin and Shin Kong hope that by merging

they can expand their footprint and become a more globally

competitive company.

Financial Supervisory Commission Vice Chair Chiu Shu-chen

told reporters that CTBC's plans were incomplete, and that it

had asked the firm to provide further documentation for its bid,

but not all met the regulator's requirements.

However, the regulator still encourages the financial

industry to make "benign" mergers and acquisitions that respect

market order, she added.

CTBC said in a statement that it was disappointed, but

respected the decision.

Taishin said last week it would raise its offer for Shin

Kong by 25% to about T$222.4 billion ($6.98 billion) in a deal

that would be Taiwan's biggest-ever financial services industry

merger.

($1 = 31.8680 Taiwan dollars)

(Reporting by Faith Hung and Emily Chan; Writing by Ben

Blanchard; Editing by Emelia Sithole-Matarise)