We are exposed to certain foreign currency risks. Where possible, we identify exposures in our business that can be offset internally. Where no natural offset is identified, we may choose to enter into various derivative transactions. These instruments have the effect of reducing our exposure to unfavorable changes in foreign currency rates. The Company’s board of directors reviews and approves policies for managing this risk as summarized below. Additional information regarding our derivative financial instruments can be found in Note 10 — Fair Value Measurements and Note 15 — Accumulated Other Comprehensive Loss.

Certain non-U.S. subsidiaries receive revenue and incur expenses in currencies other than their functional currency, and as a result, the foreign subsidiary’s functional currency revenue and/or expenses will fluctuate as the currency rates change. Additionally, the forecast Pounds sterling expenses of our London brokerage market operations may exceed their Pounds sterling revenue, and they may also hold significant foreign currency asset or liability positions in the condensed consolidated balance sheet. To reduce such variability, we use foreign exchange contracts to hedge against this currency risk.

These derivatives were designated as hedging instruments and at June 30, 2020 and December 31, 2019 had total notional amounts of $474 million and $499 million, respectively, and had a net fair value liability of $13 million and a net fair value asset of $8 million, respectively.

At June 30, 2020, the Company estimates, based on current exchange rates, there will be $12 million of net derivative losses on forward exchange rates reclassified from accumulated other comprehensive loss into earnings within the next twelve months as the forecast transactions affect earnings. At June 30, 2020, our longest outstanding maturity was 1.7 years.

The effects of the material derivative instruments that are designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020 and 2019 are below. Amounts pertaining to the ineffective portion of hedging instruments and those excluded from effectiveness testing were immaterial for the three and six months ended June 30, 2020 and 2019.

	Loss recognized in OCI (effective element)
	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Forward exchange contracts	$	(3	)	$	(10	)	$	(27	)	$	(2	)

Location of loss reclassified from Accumulated OCL into income (effective element)	Loss reclassified from Accumulated OCL into income (effective element)
	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Revenue	$	(1	)	$	(3	)	$	(1	)	$	(2	)
Salaries and benefits		(1	)		1			(3	)		(4	)
	$	(2	)	$	(2	)	$	(4	)	$	(6	)

We also enter into foreign currency transactions, primarily to hedge certain intercompany loans and other balance sheet exposures in currencies other than the functional currency of a given entity. These derivatives are not generally designated as hedging instruments and at June 30, 2020 and December 31, 2019, we had notional amounts of $1.1 billion and $931 million, respectively, and had net a fair value liability of $2 million and a net fair value asset of $21 million, respectively.

The effects of derivatives that have not been designated as hedging instruments on the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2020 and 2019 are as follows:

		Loss/(gain) recognized in income
		Three Months Ended June 30,					Six Months Ended June 30,
Derivatives not designated as hedging instruments:	Location of (loss)/gain recognized in income	2020			2019		2020			2019
Forward exchange contracts	Other income, net	$	(8	)	$	6	$	(20	)	$	(4	)

On June 10, 2020, we entered into certain foreign currency transactions to hedge the consideration to be received from the forthcoming divestiture of our Max Matthiessen business (see Note 3 — Acquisitions and Divestitures) against fluctuations in foreign exchange rates. The notional value of these contracts is approximately $273 million, of which approximately $181 million has been designated as a hedge of net investment, on an after-tax basis, against the carrying value of the net assets of Max Matthiessen. The fair values of both the designated and undesignated hedging instruments at June 30, 2020 were immaterial.