Cabinet orders Capital Market Authority to remove constraints on investors from other Gulf Arab nations.
Saudi Arabia's cabinet ordered the bourse regulator on Monday to remove constraints on investors from five other Gulf Arab oil producers.
A cabinet statement carried by the official Saudi Press Agency said the move was in line with the resolutions of a 2002 summit of the Gulf Cooperation Council (GCC).
"The council of ministers authorises the Capital Market Authority (CMA) to do what is required for ... full equality between nationals of the GCC in holding and trading stocks," it said.
The GCC summit held in Qatar in December, 2002 sanctioned that all nationals of the bloc receive equal treatment in all economic activities and set 2007 as a deadline for the implementation of the resolution.
The Saudis have been dragging their feet on agreements to open up their stock market as part of plans for economic integration in the world's biggest oil exporting region.
In 2005, the kingdom said that it would open its stock market, the Arab world's largest, to fellow Gulf Arabs but backtracked in July, saying sectors such as banking and insurance would remain off-limits for several months.
Last August, the kingdom announced plans to ease restrictions on Gulf Arab institutional investment in its bourse. The CMA said then it would allow government investment institutions, pension funds and social insurance funds based in the six GCC monarchies to invest in the Saudi bourse.
Some Gulf private sector institutions such as investment banks have been active in the Saudi market for years, sometimes through special investment vehicles.
Most Gulf states have some restrictions on foreign investment in stocks, but Saudi Arabia, the world's biggest oil exporter, is easily the least open.
The momentum of reform picked up after the Saudi market crashed in February 2006. The CMA allowed the kingdom's foreign residents to invest directly in stocks after the crash, hoping to revive confidence as capital fled the market.