Saudi Arabia will open its $532 billion stock market to direct foreign investment on June 15, allowing qualified foreign institutions to buy shares from that date, the Capital Market Authority said on Thursday.

Final rules covering the opening of the market will be published on May 4, the regulator said in a brief statement.

Saudi Arabia announced last July that it would permit direct foreign purchases of shares in the first half of 2015, as a way to expose companies to market discipline, diversify the economy beyond oil and create jobs.

Fund managers believe tens of billions of dollars will eventually enter the country as a result; Saudi Arabia is the Arab world's biggest stock market and one of its most diverse.

In draft rules released last August before a period of public consultation, the CMA proposed a 10 per cent cap on foreign ownership of the market's value.

Among other draft rules, a single foreign investor could own no more than 5 per cent of any listed firm, while all foreign institutions combined could own no more than 20 per cent.

Up to now, foreign investors have been restricted to buying Saudi shares indirectly through swaps or exchange-traded funds.-Reuters