Investments

The following table presents the details of our investments:



	December 31, 2018		December 31, 2017
	(in millions)
Trading securities	$	259	$	221
Available-for-sale investment securities	9		14
Financial investments, at fair value	$	268	$	235

Equity method investments	$	135	$	131
Equity securities	$	44	$	152

Financial Investments, at Fair Value

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 $166 million as of December 31, 2018 and $160 million as of December 31, 2017, are assets primarily utilized to meet regulatory capital requirements, mainly for our clearing operations at Nasdaq Clearing.

Available-for-Sale Investment Securities

As of December 31, 2018 and 2017, available-for-sale investment securities, which are included in financial investments, at fair value in the Consolidated Balance Sheets, were primarily comprised of commercial paper. As of December 31, 2018 and 2017, the cumulative unrealized gains and losses on these securities were immaterial.

Equity Method Investments

As of December 31, 2018 and December 31, 2017, our equity method investments primarily included equity interests in OCC and EuroCCP N.V.

The carrying amounts of our equity method investments are included in other non-current assets in the Consolidated Balance Sheets.

Net income recognized from our equity interest in the earnings and losses of these equity method investments was $18 million for the year ended December 31, 2018, $15 million for the year ended December 31, 2017, and $2 million for the year ended December 31, 2016. The change in the year ended December 31, 2018 compared with the same period in 2017 is primarily due to an increase in income recognized from our investments in OCC and EuroCCP N.V. The change in the year ended December 31, 2017 compared with the same period in 2016 relates to our additional 20.0% ownership interest in OCC, which we acquired in connection with our acquisition of ISE in June 2016, bringing our total ownership interest in OCC to 40.0%, partially offset by the write-off of an equity method investment which was offset by a gain resulting from the sale of a percentage of a separate equity method investment.

Capital Contribution to OCC

In March 2015, OCC implemented a capital plan under which the options exchanges that are OCC’s stockholders contributed $150 million of new equity capital to OCC, committed to make future replenishment capital contributions under certain circumstances, and received commitments regarding future dividend payments and related matters. See “Other Commitments,” of Note 19, “Commitments, Contingencies and Guarantees,” for further discussion of our commitment to make future replenishment capital contributions. Nasdaq PHLX and ISE each contributed $30 million of new equity capital under the OCC capital plan. OCC adopted specific policies with respect to fees, customer refunds and stockholder dividends, which envision an annual dividend 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 (such refunds are generally 50% of the portion of OCC’s pre-tax income that exceeds OCC’s capital requirements). In 2018, 2017 and 2016, OCC disbursed annual dividends under the capital plan and Nasdaq, via its ownership interests, as the owner of two shares, received $13 million in 2018, $10 million in 2017 and $4 million in 2016.

In February 2016, after the SEC approved the rule change establishing the OCC capital plan, certain industry participants appealed that approval in the U.S. Court of Appeals. In August 2017, the Court of Appeals remanded the case to the SEC. In February 2019, on remand from the Court of Appeals, the SEC disapproved the OCC rule change that established the capital plan. In its decision, the SEC noted that it will consider any requests for exemptive or other relief that OCC might seek while OCC considers its alternatives to ensure compliance with relevant regulations. OCC has not publicly announced its plans in light of the order. As a result of the SEC decision, OCC may return capital to us or adopt new policies, which may impact us. We are unable to predict the outcome or exact timing of resolution of this matter.

Equity Securities

The carrying amounts of our equity securities are included in other non-current assets in the Consolidated Balance Sheets. As of December 31, 2018, our equity securities primarily represent various strategic investments made through our corporate venture program. As of December 31, 2017, our equity securities primarily represented our 5.0% ownership in Borsa Istanbul and our 5.0% ownership interest in LCH.

In December 2018, we sold our 5.0% ownership interest in LCH for $169 million in cash. As a result of the sale, we recognized a pre-tax gain of $118 million ($93 million after tax). The gain is included in gain on sale of investment security in the Consolidated Statements of Income for the year ended December 31, 2018.

The Borsa Istanbul shares, which were issued to us in the first quarter of 2014, were part of the consideration received under a market technology agreement. This investment had a carrying amount of $75 million which was guaranteed to us via a put option negotiated as part of the market technology agreement. During the second quarter of 2018, we exercised the put option and we expect to receive cash consideration in installments through 2022. In 2018, we received $45 million in cash. The remaining receivable is recorded in other current assets and other non-current assets in the Consolidated Balance Sheets.