Bank of China's state shareholders have agreed not to convert their holdings into H-shares upon the lender's planned US$7 billion Hong Kong public share sale in May, the South China Morning Post reported. China SAFE Investments, the wholly state-owned financial holding company, and the National Social Security Fund together own about 83% of BOC. SAFE wanted to convert all its shares into H-shares, but the securities regulator insisted that part of BOC's existing shares be reserved for later conversion into yuan A-shares to give the mainland's second-largest lender a strong incentive to pursue a domestic share sale. The decision could mean BOC's exclusion from the Hang Seng Index, which is tracked by many fund managers, as H-share firms must have no unlisted share capital to qualify for the index, which could lessen investor interest.