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HSI Services Ltd., the compiler of Hong Kong's benchmark Hang Seng Index, said Monday it has no plans to include H-share companies in the index despite efforts by the Central Government to reform the shareholding structures of State-owned mainland companies.

H shares are Hong Kong-listed shares issued by a company registered and based on the mainland, usually a State-owned enterprise.

"The long-standing policy of covering H-share companies in the Hang Seng China Enterprises Index reflects the fact that H shares represent only one class of capital of these Hong Kong-listed mainland companies," said Vincent Kwan, director and general manager of HSI Services.

"H-share companies are a separate category of stock in the Hong Kong stock market and are therefore not eligible for inclusion in the Hang Seng Index."

Mainland's share reforms address the fact that nearly all listed Chinese companies are saddled with cumbersome nontradable shares. To resolve this overhang, the Central Government announced in May plans to float listed companies' nontradable shares. About 66 percent of the market capital of listed mainland companies is nontradable stock, often in government hands.

Kwan said HSI Services will continue to observe mainland's share reforms as they are still underway and it isn't clear what the implications will be for H-share companies.

"However, HSI Services will closely monitor the progress of the share reform and will assess any likely impact on index compilation methodology and