By Ross Kerber
BOSTON (Reuters) - Top financial market index providers should reconsider their recent decisions to add Saudi Arabia to emerging markets products, New York City's chief pension fund official said on Wednesday, citing "disturbing allegations" about the kingdom after the killing of journalist Jamal Khashoggi.
In letters to three major index providers sent on Wednesday and seen by Reuters, New York City Comptroller Scott Stringer wrote he was concerned that keeping the country in the indexes would expose his funds and others to unsuitable investments.
"Saudi Arabia has demonstrated a disdain for the rule of law and international norms of due process and human rights," creating risks for investors, he wrote.
Spokespeople for the three index providers who received the letters, MSCI Inc (N:MSCI), FTSE Russell and S&P Dow Jones Indices all declined to comment.
Stringer oversees New York City's roughly $195 billion public pension system, one of the largest in the U.S. His call marked only the latest move among Western political and financial leaders to distance themselves from Saudi Arabia after the journalist's death sparked global condemnation.
On Wednesday Saudi Arabia's Crown Prince Mohammed bin Salman vowed Khashoggi's killers would be brought to justice, in his first public comments about the matter.
Exclusion from the indexes would mark a setback for Saudi Arabia after the world's top oil producer was upgraded since March by each of the three well-known index providers on the strength of market reforms spearheaded by the ruler widely known as MbS.
The Saudi Stock Exchange had said in September it expected a heavy inflow of foreign money in 2019 - perhaps $20 billion or more - as it joins major emerging markets indexes.
A spokesperson for Stringer said the pension system has no direct investments in Saudi companies currently. A public disclosure shows that as of July funds run by his office had $15.5 billion allocated to emerging markets.
Index providers had previously said Saudi Arabia would account for around 2.7 percent of emerging markets index products, which would give the city's funds an exposure to the country of about $420 million.
FTSE Russell is owned by London Stock Exchange Group (L:LSE) and S&P Dow Jones Indices is part of S&P Global Inc (N:SPGI).