An index addition is generally made only if a vacancy is created by an index deletion. Index additions are made according to market size and liquidity. An initial public offering (IPO) is added to the index only when an appropriate vacancy occurs and is subject to proven liquidity for at least two months. An exception may be made for extraordinary large global offerings where expected trading volume justifies inclusion.
For all indices, with the exception of the S&P/ASX 300 and the All Ordinaries, an addition is made as soon as a place has been vacated due to an index deletion.
Deletions can occur due to acquisitions, mergers and spin-offs or due to suspension or bankruptcies. The decision to remove a stock from the index will be made once there is sufficient evidence that the transaction will be completed. Deletions of stocks due to ergers & acquisitions activity are removed from the index at the best available price in the market.