(Adds details from press conference, byline)

By Emily Kaiser

WASHINGTON, April 12 (Reuters) - Countries that receive investments from government-owned wealth funds should not discriminate against them nor allow fear and mistrust to feed rising protectionism, the OECD said on Saturday.

The Paris-based Organization for Economic Cooperation and Development said its members -- which include the world's big industrialized nations -- had committed to keeping their investment frontiers open to wealth funds provided the funds invest for commercial rather than political ends.

Wealth funds, with assets above $2 trillion and growing fast, have been a source of angst in many Western countries because of concern they might pose a national security threat should they seek to obtain sensitive information or destabilize markets through their investments.

In a report on sovereign wealth funds and recipient country policies, the OECD said its members had agreed to be guided by principles of nondiscrimination and to ensure that their rules governing foreign investors were clear and predictable.

"As is often the case, when new actors emerge on the international financial scene, the players need to become better acquainted," the OECD said in a report to the IMF's policy-setting International Monetary and Financial Committee.

"The growing role of SWFs raises issues regarding the smooth functioning of financial markets and they raise investment policy questions, including legitimate concerns in recipient (countries)," the report said.

The Group of Seven rich nations had asked the OECD and the International Monetary Fund to study wealth funds and come up with a list of best practices to guide their investments. The OECD said it would release its final report next spring.