Saudi Arabia is finalising a regulatory framework which will allow foreigners to directly own stocks in the kingdom, though the market has no need for liquidity from international investors, the head of the country's market regulator said.

"There are a number of government entities, including CMA, that are looking at that (direct foreign investment). We're finalising a regulatory framework with certain parameters," Mohammed bin Abdulmalik Al al-Sheikh, recently appointed head of the Capital Market Authority, said in Riyadh on Tuesday.

He did not give any time frame for the reform, which officials have been considering for years.

The regulator is also trying to limit "high levels of speculation" in the stock market, Al-Shiekh, previously a World Bank official, said on the sidelines of a conference.-Reuters