As the new breakthrough of reform and opening strategy，China（Shanghai）Free Trade Zone has established its fundamental institutional mechanism. However it is still confronted with challenges regarding industrial function，financial opening，tax policy improvement and enterprise motivation. The highlight of Free Trade Zone’s financial reform lies in separate ledger system，the framework and operation mechanism of which decide the effectiveness of institutional innovation. Other improvement can also be observed in key financial reform fields like transnational funding innovation，interest rate liberalization，foreign exchange system reform. Embedment of financial innovation requires that financial reform constantly improved，that macro prudent supervision system established，that capital account convertibility available for oversea investors，and that key reforms in fields like interest rate liberalization be better supervised.