Investments

The following table presents the details of our investments:



	December 31,
	2016		2015
	(in millions)
Trading securities	$	228	$	189
Available-for-sale investment securities	17		12
Equity method investments	124		72
Cost method investments	144		132

Trading Securities

Trading securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, are primarily comprised of highly rated European government debt securities, of which $172 million as of December 31, 2016 and $166 million as of December 31, 2015, are assets utilized to meet regulatory capital requirements primarily for our clearing operations at Nasdaq Clearing.

Available-for-Sale Investment Securities

Available-for-sale investment securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, are primarily comprised of short-term commercial paper. As of December 31, 2016 and December 31, 2015, the cumulative unrealized gains and losses on these securities were immaterial.

Equity Method Investments

As of December 31, 2016, our equity method investments primarily included equity interests in OCC and EuroCCP N.V. As of December 31, 2015, our equity method investments primarily included equity interests in OCC, EuroCCP N.V. and The Order Machine.

The carrying amounts of our equity method investments are included in other non-current assets in the Consolidated Balance Sheets. The increase in 2016 compared with 2015 was primarily due to the inclusion of an additional 20.0% ownership interest in OCC, which we acquired in connection with our acquisition of ISE on June 30, 2016, bringing our total ownership interest in OCC to 40.0% as of December 31, 2016. The increase in 2016 was partially offset by the write-off of our equity method investment in The Order Machine as discussed below.

We evaluate our equity method investments for other-than-temporary declines in value by considering a variety of factors such as the earnings capacity of the investment. As of December 31, 2016, the estimated fair value of our investment in The Order Machine was less than the carrying value and management considered the decline in value to be other-than-temporary. As a result, we recorded a non-cash impairment charge of $7 million to write off the full value of the investment. This charge is recorded in net income from unconsolidated investees in the Consolidated Statements of Income for 2016. No other impairments of equity method investments were recorded in 2016, 2015 or 2014.

Net income recognized from our equity interest in the earnings and losses of these equity method investments was $2 million for the year ended December 31, 2016, $17 million for the year ended December 31, 2015 and immaterial for the year ended December 31, 2014. The change in year ended December 31, 2016 compared with the same period in 2015 is primarily due to income recognized from our equity method investment in OCC, partially offset by the write-off of our equity method investment in The Order Machine. The change in year ended December 31, 2015 compared with the same period in 2014 is primarily due to income recognized from our equity method investment in OCC. We were not able to determine what our share of OCC’s income was for the year ended December 31, 2014 until the first quarter of 2015, when OCC’s financial statements were made available to us. As a result, we recorded other income of $13 million in March 2015 relating to our share of OCC’s income for the year ended December 31, 2014. This income is included in net income from unconsolidated investees in the Consolidated Statements of Income for 2015.

Capital Contribution to OCC

In March 2015, in connection with being designated systemically important by the Financial Stability Oversight Council, OCC implemented a capital plan under which the options exchanges that are OCC’s stockholders made new capital contributions to OCC, committed to make further capital contributions in the future under certain specified circumstances, and received certain commitments from OCC with respect to future dividend payments and related matters. Under the OCC capital plan, OCC’s existing exchange stockholders, including Nasdaq and ISE, each contributed a pro-rata share of $150 million in new equity capital. Nasdaq’s and ISE’s capital contributions were each $30 million. OCC’s exchange stockholders also committed to provide, as may become necessary from time to time, additional replenishment capital on a pro-rata basis if certain capital thresholds are triggered. For its part, OCC adopted specific policies with respect to fees, customer refunds and stockholder dividends, which envision an annual dividend payment to its stockholders equal to the portion of OCC’s after-tax income that exceeds OCC’s capital requirements after payment of refunds to OCC’s clearing members (with such customer refunds generally to constitute 50% of the portion of OCC’s pre-tax income that exceeds OCC’s capital requirements). After the SEC staff approved the OCC capital plan and the stockholders made their capital contributions, the plan’s further effectiveness was suspended under the applicable SEC rules because certain parties petitioned the full Commission to reconsider the capital plan’s approval. This stay was lifted by the SEC in September 2015, allowing OCC to implement the plan and in February 2016, the SEC issued an order approving the OCC capital plan as previously implemented and dismissed the petitions challenging that plan. The petitioners filed for a stay of the SEC’s order, which would have blocked OCC from paying a dividend under the OCC capital plan. The Court of Appeals denied the requested stay, permitting OCC to pay a dividend which Nasdaq received in February 2016. The petitioners also appealed the SEC’s order to the Federal Court of Appeals for the District of Columbia Circuit, and the appeal is pending.

Cost Method Investments

The carrying amount of our cost method investments is included in other non-current assets in the Consolidated Balance Sheets. As of December 31, 2016 and 2015, our cost method investments primarily represented our 5% ownership interest in Borsa Istanbul, and our 5% ownership interest in LCH.Clearnet Group Limited.

The Borsa Istanbul shares, which were issued to us in the first quarter of 2014, are part of the consideration received under a market technology agreement. This investment has a cost basis of $75 million which is guaranteed to us via a put option negotiated as part of the market technology agreement.