Dow Jones Indexes and FTSE Group inked a deal to merge their industry classification structures to create a single definitive system covering equities and corporate bonds worldwide. It will be known as the Industry Classification Benchmark (ICB), and is expected to be implemented by the end of 2004. "This cooperation is an important step toward enriching the usefulness of corporate classifications to investors globally," said Michael A. Petronella, president of Dow Jones Indexes/Ventures.
"By merging our industry classification systems, FTSE and Dow Jones Indexes create the industry's most powerful single standard, uniting the classification structures of the world's major exchanges, financial media and index providers," said Mark Makepeace, chief executive of FTSE Group.
In 2001, index providers Morgan Stanley Capital International (MSCI) and Standard and Poor's likewise collaborated on a new index classification system called the Global Industry Classification Standard (GICS). The new system is designed to make investment research and management easier for financial professions.
The new ICB will be totally transparent and rules-based. An advisory committee of markets experts will guide Dow Jones Indexes and FTSE on the future development of the ICB and, in certain cases, on the classification of individual stocks.
The ICB is an evolution of the FTSE Global Classification System and the Dow Jones Global Classification Standard. It contains four classification levels, adding a "Supersector" level to the three-tiered FTSE Global Classification System.
- 10 Industries
- 18 Supersectors
- 9 Sectors
- 104 Subsectors
For a PDF overview of the ICB structure, click here.