Ebb & Flow

NASDAQ's revamped biotechnology index takes effect today, although many purists may find that "biotech" has been diluted in the new NBI.

In the past, NASDAQ used the SEC's Standard Industrial Classification (SIC) system, which was created in 1971 and has not kept up with the dynamics of the technology sectors, according to John Jacobs, NASDAQ's executive vice president of worldwide marketing and financial products. Under the SIC system, a company "self-declares" the sector in which it belongs, and many biotechs selected broader categories such as "Pharma" and thus were not considered for the NBI. ...