Morningstar announced Tuesday that it is restructuring the classification system it uses for global equities. Equities will be classified based on the markets they serve instead of the business they conduct.

“The overarching structure of our original sector classification system was created nearly 10 years ago, and since that time the markets and our clients’ needs have evolved,” John Rekenthaler, vice president of research, said in a press release.

The new system was developed with Morningstar’s Equity Research team to "better reflect the sensitivity of a company’s operations to economic cycles."

"This is a more intuitive approach that can accommodate the global equity markets and help investors make better-informed investing decisions,” Rekenthaler added.

Under the new scheme, companies will be placed in one of 148 industry categories, determined by their largest sources of income and revenue. The industries will be divided into 69 industry groups which fit into one of 11 sectors, including basic materials, communication services, consumer cyclical, consumer defensive, energy, financial services, health care, industrials, real estate, technology, and utilities. The sectors will be further categorized in a "super sector" group. The super sectors will indicate how each sector group is affected by macroeconomic cycles, including Cyclical, Defensive and Sensitive.

The new system will be adopted in phases, beginning October 15 with the industry categories. The Equity Research, Equity Data Feeds, and Equity Indexes groups will adopt the industry group, sector and super sector categories in October, while the remaining product groups will adopt the new structure in the first quarter of 2011.