The update in the classification system is likely to impact investors who track index and ETFs.
The MSCI and the S&P Dow Jones Indices have stated that they would overhaul their Telecommunication Services Sector and add Alphabet, Comcast Corp, Facebook and Netflix to the newly broadened category.
The changes in the Global Industry Classification Standard, or GICS, an industry taxonomy widely used by investors, will be now be expanded and renamed from the Telecommunication Services Sector to Communication Services, said MSCI and S&P Dow Jones Indices in a statement.
The new classification system places Google parent Alphabet Inc, Facebook and Netflix, whose explosive growth has helped propel the stock market to new heights, alongside traditional telecom industry giants such as Verizon Communications and AT&T Inc.
Indexes including the S&P 500 are a guide for trillions of dollars of capital worldwide, including index-tracking, exchange-traded funds (ETFs). Many of these funds which track sector-specific indexes are likely to be affected by these GICS changes.
In November 2017, both exchanges had stated they were planning on changing their categories and would implement the updates after the close of business on September 28, 2018.
The updates reflect changes changes in the industries resulting from technology and acquisitions.
Incidentally, Snap Inc and Twitter, both of which are part of the Information Technology Sector would migrate to the newly named Communications Sector.
DISH Network Corp and Walt Disney Co, currently in the Consumer Discretionary Sector, will also join the Communications Sector.