Saudi Arabia took an unprecedented step on Wednesday when it opened its stock market to a limited extent to non-resident foreign investors. Opening the largest Arab bourse to investors outside the region is considered a most significant move. The board of the Capital Market Authority passed a new law saying foreign investors, whether individuals or institutions, could enter swap agreements with authorized people who own the shares. The share owners will then pass on any profits to the foreign investors, but will retain legal ownership of the shares. The CMA did not say when the new measure would take effect. Up until now, the Saudi stock exchange, Tadawul, has been the least open to foreign investment among the Gulf Arab bourses. Only residents of members of the Gulf Cooperation Council (GCC) - Saudi Arabia, Qatar, Bahrain, Kuwait, Oman and the United Arab Emirates - could invest directly in the kingdom's stock market, while Western investors relied on the mutual funds sector to access the market. It is still unclear whether there will be restrictions on individual shares or on the percentage of foreign ownership. The new law is part of an effort to diversify the market's investor base and develop the kingdom's financial market.