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GICS Changes in March to Impact Sensitive Industries Monitoring

Posted on Feb 9 2023 by Ben Richards

The Global Industry Classification Standard is changing 17 March 2023, and investment management companies will need to reflect changes to stay compliant.

Revisions to the Global Industry Classification Standard Codes

As announced by S&P Global, changes to the Global Industry Classification Standard (GICS) will be effective after the close of business on Friday 17 March 2023.

The new GICS structure will consist of 11 Sectors, 25 Industry Groups, 74 Industries and 163 Sub-Industries. 

Investment Managers commonly use GICS to identify and monitor Sensitive Industries for specific disclosure, pre-approval and hard stop limits. A breach of sensitive industry requirements can lead to serious penalties. 

Whilst changes to GICS are not common (they were last updated in 2018), these sweeping revisions will require investment firms to ensure the Sensitive Industry controls they have are updated with the changes, requiring fresh interpretation of the regulation and changes in compliance monitoring platforms.

Notable changes investment firms will need to make include:

  1. Payments services will be reclassified from IT Services into the Financials sector
  2. Thrifts & Mortgage Finance will be discontinued and be under the Banks industry
  3. The addition of multiple new industry categories for REITs

You can read a full summary of the impending changes here. 

FundApps’ Automated Sensitive Industries service uses GICS to identify Sensitive Industries. The Regulatory Content team stays ahead of regulatory and industry changes as part of the fully managed service, so clients do not have to review and implement these GICS revisions.

FundApps will have the Automated Sensitive Industries service prepared in time for the March 2023 GICS revisions.