TOPIC: Process for Canceling Sprints

I've seen two different examples related to canceling sprints. Both agree that the product owner only has that authority, but both also gave the condition that a new high-priority requirement needed to be included in the existing iteration. One example stated that the product owner, at their discretion, would cancel the sprint and allow the team to review the new requirement to be included in the next. The other suggested that the product owner could authorize the item to be included in the active iteration but would need to remove something from the current iteration with equal story points.

I'm assuming the latter example is not correct, but wanted to make sure that it isn't a hard-fast rule that nothing can be added to an iteration already in play? Would make sense that the team would need time to evaluate the new requirement, but if it is simple enough not sure if they could agree to add it and push something else back to the backlog.