FTSE Group (“FTSE”), the award winning global index provider, today announces that worldwide exchange NASDAQ OMX will be adopting the widely used global standard for company classification - Industry Classification Benchmark (ICB). The global classification system will be adopted across Stockholm, Copenhagen, Helsinki, Reykjavik, Tallinn, Riga and Vilnius, aligning the exchanges with the classification system currently employed by NASDAQ OMX in the US.
NASDAQ OMX will replace its current company classification system with ICB, to aid the classification and analysis of companies listed on these seven exchanges. The change will be made effective as of 1st February 2012.
With four levels of granularity - industry, supersectors, sectors and subsectors – ICB forms an independent investment tool providing pension funds, managers, consultants, stock exchanges, sell-side research teams and more, with the ability to better define, analyse, and implement sector-based strategies.
The transparent and comprehensive system is adopted by stock exchanges around the world, representing over 65% of the world’s market capitalisation. With over 75,000 securities across 73 countries, ICB provides extensive geographic reach, offering investors the widest choice, for the purposes of benchmarking, performance measurement or research/analysis.
“As a result of this action, our listed companies can more effectively benchmark with global peers, a total of 75,000 securities, compared to 40,000 previously” said Jenny Rosberg, Senior Vice President Global Corporate Client Group at NASDAQ OMX. “It also enables us to create consistent and comprehensive global indexes, enabling individual and institutional investors to quickly, accurately, and objectively measure and invest in the market.”
“When launched, ICB was designed as a sector analysis tool offering investors the ability to tailor exposure to companies globally. Today, it continues to be a leading sector classification system for financial products including indices, exchange-traded funds and derivatives contracts,” said Sudir Raju, Managing Director of ICB at FTSE Group. “NASDAQ OMX’s global adoption of ICB further acknowledges our efforts in providing market participants with reliable, innovative and state-of-the-art sector classification. Going forward, we will to continue to develop ICB to ensure it continues to service the needs of the global investment community.”