The Korea Exchange is set to implement its own industry classification system, 'KRICS,' which reflects the characteristics of the domestic industrial structure and listed companies. This new system will categorize industries such as mobility, shipbuilding, batteries, and semiconductors, which are significant in the domestic stock market, to facilitate comparisons among listed companies and the development of industry- and theme-based indices.
On September 22, the exchange announced the completion of the KRICS (KRX Industry Classification Standard) to manage the classification and positioning of listed companies by industry and to respond to the demand for various index developments.
KRICS is structured into nine sectors that align with the value chain of the domestic economy, including energy and chemicals, materials, industrial goods, mobility, information technology, finance and real estate, consumer goods, healthcare, and media and content.
Specifically, it features a four-tier hierarchical structure comprising nine primary sectors, 24 industry groups, 60 industries, and 129 sub-industries. The exchange finalized the classification system after drafting it through external research in 2024, followed by feedback collection and refinement.
Unlike previous classifications, KRICS reflects the unique characteristics of the domestic stock market. It introduces 'mobility' as a top-level sector, grouping automotive, parts, and passenger transport under the common business area of 'mobility.' Additionally, it separately classifies prominent domestic industries that attract investor interest, such as shipbuilding, batteries, semiconductors, displays, cultural entertainment, and gaming.
The industry classification will be updated annually in April based on the most recent financial information from disclosed business reports and audit reports. However, it will also consider the actual business characteristics and market perceptions. If significant changes in industry classification are anticipated due to new listings or major corporate events, the exchange will conduct ad-hoc reviews to reflect these changes.
Starting September 23, the exchange will implement the 'KRX Industry Classification Methodology' and will publicly disclose the KRICS 1st and 2nd level industry classification results, along with related market data such as stock prices and trading volumes, on the KRX index website beginning October 26. Listed companies or index users who believe a change in industry classification is necessary can request a review from the exchange.
The exchange expressed optimism that the introduction of KRICS will enhance market understanding of listed companies and improve the comparability of industries. It plans to utilize this system for the development of industry- and theme-based indices in response to changes in industrial structures.
In the second half of this year, KRICS will be prioritized for application to major indices such as KOSPI 200 and KOSDAQ 150, with plans to gradually expand its application to other indices.
* This article has been translated by AI.
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