Saudi Arabia will allow its planned exchange-traded funds to include Islamic bond and commodity instruments in addition to Saudi shares, the Saudi stock exchange Tadawul said.

The Capital Market Authority (CMA) will also allow exchange traded funds that include only Saudi shares to be listed on foreign bourses, Tadawul said in a statement.

'Exchange Traded Funds (ETFs) are not limited to stocks alone but can also include sukuk or commodities such as gold and silver, but in the primary phase of this (ETFs) project, only funds with Saudi stocks will be launched,' Tadawul said.

The world's top oil exporter has been trying to encourage more foreign money to its bourse, having allowed indirect foreign ownership via so-called swap agreements in 2008 as part of gradual efforts to open up the biggest Arab bourse.

Last week, Saudi financial firm Falcom Financial Services won approval to list the 'Falcom Saudi Equity ETF' on the bourse of the world's top exporter. It gave no date for the start.

Such ETFs could be listed on foreign bourses pending approval of the regulator, the Saudi bourse said on its website, detailing the plans.

A market maker would provide the necessary liquidity, it added, without giving more details. - Reuters