The Canadian Venture Exchange and Standard & Poor’s announced on Wednesday the creation of the S&P/CDNX Composite Index — a new venture capital index for Canada.

The S&P/CDNX Composite Index is being developed as a broad market indicator for the Canadian venture capital market. The index, which will replace the existing CDNX index, will make its debut on December 10.

Calculated in a manner similar to the TSE 300 Composite Index, the new index will be market capitalization weighted and, at its inception, will include approximately 500 companies.

A quarterly revision process will be used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index.

In addition, companies removed throughout the quarter through normal course corporate events will not be replaced until the next quarterly review, if at all.

“Standard & Poor’s is an acknowledged world leader in equity indexing and we are pleased they have created this index,” said Richard Nesbitt, president TSE CDNX Markets Inc. “The TSE has had an excellent relationship with S&P, dating back more than three years. S&P manages all TSE indices and the expansion to the venture market was a natural extension for us.”

Glenn Doody, director of Canadian Index Operations for Standard & Poor’s, said, “We are pleased to be involved in the creation of this new product. Building on our well-known strengths in index development around the world, the new S&P/CDNX Index offers Standard & Poor’s the opportunity to replicate the success of our other Canadian indices and thereby assist investors in this market.”