A proposal to include some of the largest Hong Kong-listed mainland companies on the Hang Seng Index is timely and should be welcomed. Companies such as smartphone maker Xiaomi and technology behemoth Alibaba have market capitalisation and high daily trading volumes that require their inclusion to keep the stock index relevant as a benchmark for investors. Even so, the planned overhaul is not without controversy and is currently under consultation. The so-called blue chips represented on the index traditionally have their primary listing in Hong Kong and have equal voting rights, or “one share, one vote”. Yet, many big tech firms such as Alibaba – parent of the Post – are already listed overseas, usually in New York, and/or have unequal voting rights for different classes of shares. In fact, Alibaba was only allowed to list in Hong Kong in November, five years after its US$25 billion IPO in New York, after the index rewrote the listing rules for companies with unequal voting rights. Alibaba, Xiaomi and Meituan-Dianping, the group-buying and discounts service company, together command almost HK$5.3 trillion (US$679 billion) in market value, which is equivalent to 56 per cent of the total market capitalisation of the Hang Seng Index’s 50 constituent members. The local stock index is already dominated by mainland firms, which account for 60 per cent of listings, 70 per cent of capitalisation and 80 per cent of trading volume. Where does the Hang Seng Index go from here? The concerns raised in the consultation do not really affect retail investors, but rather professional fund managers who may want to have a say as large shareholders in a company. Unequal voting rights will rob them of the ability to make their voices heard. Yet some funds, especially passive index-tracking ones, are bound by their mandate to buy shares listed on benchmark indexes such as the Hang Seng. Also, activist managers, including some hedge funds, sometimes amass large positions in a company to take on its management, precisely the kind of intervention unequal share structures are set up to prevent. There are good arguments supporting both sides, but the Hang Seng Index managers will have to bite the bullet and make a decision. It is simply not practical to exclude those large and heavily traded companies from a representative benchmark.