Oct. 31 (Bloomberg) -- Volkswagen AG's common shares may face removal from Germany's DAX Index as early as next week after the benchmark's compiler changed inclusion rules to stem disruptions spurred by gyrations in the automaker's stock.

Deutsche Boerse AG, operator of the Frankfurt stock exchange, said in a statement today that from Nov. 3 it may at any time remove a DAX stock whose weighting exceeds 10 percent and whose share price over the preceding 30 trading days had annualized volatility of more than 250 percent.

``The exchange wants to guard that indexes are reliable and not exposed to these unusual swings,'' said Carlos Sanchez, a sales trader at Interdin Bolsa SVB SA in Madrid. ``It would seem like Volkswagen common shares are on the way out.''

Volkswagen's weighting was cut to 10 percent as of the end of trading today and may increase next week if the shares outperform the benchmark. The stock's volatility has climbed to about 395 percent in the past 30 days, Bloomberg data show.

``They are trying to make changes outside the prescribed time frame and give themselves freedom,'' said Mamoun Tazi, a London-based exchange analyst at MF Global Securities Ltd. ``It's wise given the current environment. It's probably provoked by Volkswagen.''

Volkswagen's weighting in the DAX rose to 27 percent this week after the shares jumped fourfold in two days. The share surge meant Volkswagen was having a disproportionate effect on the DAX, sparking complaints from investors.

`Any Time'

``It's indeed a measure that can be taken at any time for any stock and not just at the next quarterly re-weighting'' on Dec. 3, said Frank Herkenhoff, a Frankfurt-based spokesman for Deutsche Boerse. He declined to name any specific stocks that would be affected.

The earliest any stock can exit the index after the new rules start is Nov. 6. Deutsche Boerse publishes a list after the end of every month showing the rankings of companies by various eligibility criteria. The list will be updated Nov. 3. Volkswagen's preferred shares aren't in the DAX and are eligible for inclusion.

Wolfsburg, Germany-based Volkswagen's common shares slipped 0.1 percent to 499.50 euros today, trimming their weekly advance to 137 percent. The preferred shares surged 15 percent to 48.50 euros, leaving them with a weekly gain of 9.6 percent.

Separately, the stock exchange's advisory board, led by Max Dietrich Kley, today called on the government to expand disclosure rules to include cash-settled equity swaps and similar instruments, the company said today in an e-mailed statement.

``This would serve to improve the transparency and integrity of the market,'' it said. The board also suggested Deutsche Boerse rework rules to create a stricter definition of free float in relation to financial instruments.

To contact the reporters on this story: Alexis Xydias in London at axydias@bloomberg.net; Nandini Sukumar in London at nsukumar@bloomberg.net.

Last Updated: October 31, 2008 14:50 EDT