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Tue 3 May 2016 12:14 PM

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Saudi to loosen foreign ownership restrictions for stocks

Each investor under Saudi Arabia's Qualified Foreign Institutions scheme will be allowed to own a stake of just under 10 percent of a single company

Saudi to loosen foreign ownership restrictions for stocks
A Saudi investor monitors the stock exchange at the Saudi Stock Exchange, or Tadawul, in the capital Riyadh. (FAYEZ NURELDINE/AFP/Getty Images)

Saudi Arabia will loosen restrictions on foreign ownership in its stock market in order to improve the investment environment, the Capital Market Authority said on Tuesday.

Each investor under Saudi Arabia's Qualified Foreign Institutions (QFI) scheme, which allows foreign institutions to buy stocks directly, will be allowed to own a stake of just under 10 percent of a single company, the CMA said.

Previously, each QFI together with its affiliates could only own a maximum of 5 percent of the shares of any listed company.

To qualify as a QFI, foreign institutions will now only need to have a minimum 3.75 billion riyals ($1 billion) of assets under management, rather than 18.75 billion riyals as previously, the CMA said.

The new rules and their effective date will be published by the end of the first half of 2017, it added.

The CMA said it had also approved the introduction of securities lending and covered short-selling to the market, with regulations for that to be issued before the end of the first half of 2017.

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