What is a Standart Industrial Classification (SIC Code)?
The Standart Industrial Classification (SIC) are four-digit codes that categorize the businesses that firms belong to while coordinating the businesses by their business activities. The SIC codes were made by the U.S. government in 1937 to help assess economic activities across various businesses and government agencies.
But, Standard Industrial Classification codes were largely replaced in 1997 with a method of six-digit codes known as the North American Industry Classification System (NAICS). The NAICS codes were adopted in part to standardize business statistics collection and analysis from between Canada, the USA, and Mexico, that had entered into the North American Free Trade Agreement.
Despite being substituted, businesses and government agencies use the SIC codes that are standardized for classifying the business that firms belong to with businesses.
- The Standart Industrial Classification (SIC) are all four-digit codes that categorize the businesses that firms belong to according to their business actions.
- Standard Industrial Classification codes were largely replaced with the six-digit North American Industry Classification System (NAICS).
- Despite being substituted, government agencies and businesses still use the SIC codes now, such as by the SEC.
Recognizing Standard Industrial Classification (SIC Code)
The Standart Industrial Classification codes were meant to enhance communication inside the U.S. government, across sectors, and between nations. SIC codes were adopted in areas beyond the U.S., as the U.K. authorities.
The Securities and Exchange Commission (SEC) is a significant government bureau that regulates the markets and still uses SIC codes. The SIC codes are recorded in a business's electronic data gathering, analysis, and retrieval system (EDGAR) filings to signify that the organization's industry. As an instance, if you visit SIC code 3721 on the EDGAR filing of Hugh's Aerospace Corporation, you will learn that the provider is part of the aircraft market.
The Way SIC Codes are Employed
Both government agencies and firms use SIC codes. Following are a few of the most frequent applications for SIC codes.
- Businesses use SIC codes to identify their current clients and possible clients by the business.
- SIC codes may be used to classify businesses for taxation purposes.
- Banks and lenders use SIC codes to recognize the business a business belongs to when contemplated extending credit.
- SIC codes are used by businesses and professionals to create targeted advertising campaigns.
- Businesses can determine the competition in their industry or area by looking for like businesses via SIC codes.
- The authorities may use SIC codes to organize and standardize information for various Federal and state agencies in addition to private businesses.
Real-World Cases of SIC Codes
Regardless of NAICS having replaced the SIC codes, it's still possible to hunt for them. Below is a picture of the Standart Industrial Codes together, using their significance, for the banking sector from the SEC's site.
- Bank of America Corporation (BAC),'' as an instance, would have the SIC code of 6021 because it is a federal commercial lender.
- Condition banks could possess the SIC code of 6022.
- Life insurance firms would be categorized as of 6311.
Cases of Standard Industrial Classification (SIC) codes in the Securities and Exchange Commission.
North American Industry Classification System (NAICS)
The North American Industry Classification System is a business-classification system manufactured by the USA, Canada, and Mexico.
North American Free Trade Agreement (NAFTA) Definition
The North American Free Trade Agreement (NAFTA) was implemented in 1994 to promote trade between the states of the United States, Mexico, and Canada.
What is the Industry?
A business is a classification that identifies a group of businesses that are associated with regard to their main business activities.
National Association of Insurance Commissioners (NAIC)
National Association of Insurance Commissioners (NAIC) is a nonprofit organization that will help develop model legislation for state insurance companies.
Moody's provides economical evaluation software and charges securities based on assessed risk and the borrower's ability to generate interest payments.
8-K (Form 8K)
businesses are required by the Securities and Exchange Commission to submit an 8-K to declare big events pertinent to investors, including an acquisition.