Will TFC enter the ASX 200 in January 2017, page-4

They use both Mcap and liquidity (which includes volume as you suggest, but also includes the percentage of shares available outside the controlling interests ie directors and significant shareholders).

So you can have a company with mcap of 2 billion but only 20% available outside the controlling interests not included in the ASX300 and ASX200 indexes.

I have seen examples of good start up companies growing their share price and then the controlling interests selling portions of the stock holdings. Firstly to take some well earned profit of the table and secondly to improve their liquidity status in the eyes of the ASX to qualify to be included in the ASX300.

cheers Lies