DEFINITION of 'Standard Industrial Classification - SIC Code'

Standard Industrial Classifications areĀ four-digit codes that categorize companies by the type of business activities they engage in. These codes were created by the U.S. government in 1937 to facilitate analysis of economic activity across government agencies and within industries. They were mostly replaced in 1997 by a new system of six-digit codes called the North American Industry Classification System (NAICS).The new codes were adopted in part to standardize industry data collection and analysis in between Canada, the United States and Mexico which had entered into the North American Free Trade Agreement.

BREAKING DOWN 'Standard Industrial Classification - SIC Code'

The Standard Industrial Classification - SIC Codes were intended to improve communication within the US government, across industries and between countries and they were adopted in places outside the US, notably by the UK government. The Securities and Exchange Commission (SEC) is a major government agency that still uses SIC codes. The SIC codes are listed in a company's electronic data gathering, analysis and retrieval system (EDGAR) filings to indicate which industry the company is part of. For example, if you see SIC code 3721 on Hugh's Aerospace Corporation's EDGAR filing, you will know that the company is a part of the aircraft industry.

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