Fair Value

The Company’s financial instruments recorded at fair value have been categorized based upon a fair value hierarchy in accordance with accounting guidance, as described in Footnote 3 “Significant Accounting Policies.” The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value (in thousands):



	Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2015	Level 1		Level 2		Level 3		Total
Assets
Financial instruments owned, at fair value:
Equities ⁽¹⁾	$	2,129,208	$	—	$	—	$	2,129,208
Listed options	178,360		—		—		178,360
U.S. government and Non-U.S. government obligations ⁽²⁾	41,706		—		—		41,706
Corporate debt	94,681		—		—		94,681
Foreign currency forward contracts	—		445		—		445
Total Financial instruments owned, at fair value	2,443,955		445		—		2,444,400
Investment in CME Group ⁽³⁾	1,814		—		—		1,814
Other ⁽⁴⁾	—		65,732		5,789		71,521
Total assets held at fair value	$	2,445,769	$	66,177	$	5,789	$	2,517,735
Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equities ⁽¹⁾	$	1,856,171	$	—	$	—	$	1,856,171
Listed options	151,893		—		—		151,893
U.S. government obligations ⁽²⁾	21,056		—		—		21,056
Corporate debt	84,284		—		—		84,284
Total liabilities held at fair value	$	2,113,404	$	—	$	—	$	2,113,404


⁽¹⁾	Equities of $856.4 million have been netted by their respective long and short positions by CUSIP number.


⁽²⁾	U.S. government and Non-U.S. government obligations of $0.1 million have been netted by their respective long and short positions by CUSIP number.


⁽³⁾	Investment in CME Group is included within Investments on the Consolidated Statements of Financial Condition. See Footnote 11 "Investments" for additional information.


⁽⁴⁾	Other primarily consists of a $64.2 million receivable from BATS related to the sale of KCG Hotspot, $5.8 million receivable from the sale of an investment and $1.5 million of deferred compensation investments which are included within Other assets and Investments, respectively, on the Consolidated Statements of Financial Condition.



	Assets and Liabilities Measured at Fair Value on a Recurring Basis
December 31, 2014	Level 1		Level 2		Level 3		Total
Assets
Financial instruments owned, at fair value:
Equities ⁽¹⁾	$	2,479,910	$	—	$	—	$	2,479,910
Listed options	144,586		—		—		144,586
U.S. government and Non-U.S. government obligations	22,983		—		—		22,983
Corporate debt ⁽²⁾	59,832		—		—		59,832
Foreign currency forward contracts	—		60		—		60
Total Financial instruments owned, at fair value	2,707,311		60		—		2,707,371
Investment in CME Group ⁽³⁾	4,435		—		—		4,435
Other investments ⁽³⁾	—		1,014		—		1,014
Total assets held at fair value	$	2,711,746	$	1,074	$	—	$	2,712,820
Liabilities
Financial instruments sold, not yet purchased, at fair value:
Equities ⁽¹⁾	$	2,069,342	$	—	$	—	$	2,069,342
Listed options	115,362		—		—		115,362
U.S. government obligations	18,953		—		—		18,953
Corporate debt ⁽²⁾	82,050		—		—		82,050
Total liabilities held at fair value	$	2,285,707	$	—	$	—	$	2,285,707

⁽¹⁾ Equities of $743.1 million have been netted by their respective long and short positions by CUSIP number.

⁽²⁾Corporate debt instruments of $0.3 million have been netted by their respective long and short positions by CUSIP number.

⁽³⁾ Investment in CME Group and Other investments, which primarily consist of deferred compensation investments, are included within Investments on the Consolidated Statements of Financial Condition.

The Company's derivative financial instruments are also held at fair value. See Footnote 7 "Derivative Financial Instruments" for further information.

The Company’s equities, listed options, U.S. government and non-U.S. government obligations, corporate debt and strategic investments that are publicly traded are generally classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices or broker or dealer quotations with reasonable levels of price transparency.

The types of instruments that trade in markets that are not considered to be active, but are valued based on observable inputs such as quoted market prices or alternative pricing sources with reasonable levels of price transparency are generally classified within Level 2 of the fair value hierarchy.

As of December 31, 2015, a receivable related to the sale of an investment was classified within Level 3 of the fair value hierarchy.

As of December 31, 2014 the Company had no financial instruments classified within Level 3 of the fair value hierarchy.

The Company’s assets measured at fair value on a nonrecurring basis for the year ended December 31, 2015 solely relate to certain goodwill and assets of businesses held for sale. The fair value measurements of such goodwill and the assets of businesses held for sale at each of the impairment measurement date and at December 31, 2015 are classified as Level 3 measurements within the fair value hierarchy, with the exception of one business unit held for sale that is classified as Level 2 at December 31, 2015. The Level 2 fair value measurement of the business unit held for sale was based on actionable quotes for the business unit, while the Level 3 measurements were valued based on discounted cash flow and other models incorporating unobservable inputs such as earnings forecasts, estimated costs of equity and avoidable costs. Total fair value as of December 31, 2015 was $0 and $24.4 million for such goodwill and assets of businesses held for sale, respectively. See Footnote 12 “Goodwill and Intangible Assets” and Footnote 5 "Discontinued Operations, Assets and Liabilities of Businesses Held for Sale & Sales of Businesses" for additional information.

There were no transfers of assets or liabilities held at fair value between levels of the fair value hierarchy for any periods presented.

The following is a summary of changes in fair value of the Company's financial assets that have been categorized within Level 3 of the fair value hierarchy for the year ended December 31, 2015 (in thousands):



	Level 3 Financial Assets for the year ended December 31, 2015
	Balance at January 1, 2015	Realized gains(losses) during period	Unrealized gains (losses) during the period	Purchases	Sales	Settlements	Issuances	Transfers in or (out) of Level 3	Balance at December 31, 2015
Receivable from sold investment	—	—	—	—	—	—	5,789	—	5,789

The following is a description of the valuation basis, techniques and significant inputs used by the Company in valuing its Level 2 and Level 3 assets and liabilities.

Foreign currency forward contracts

At December 31, 2015 and December 31, 2014, the Company had foreign currency forward contracts with a notional value of 850.0 million Indian Rupees ($13.0 million U.S. dollars) and 700.0 million Indian Rupees ($10.9 million U.S. dollars), respectively. These forward contracts are used to hedge the Company’s investment in its Indian subsidiary.

The fair value of these forward contracts were determined based upon spot foreign exchange rates and dealer quotations.

Other

Other primarily consists of the fair value of the Company's receivable from BATS as more fully described in Footnote 5 "Discontinued Operations, Assets and Liabilities Held for Sale and Sales of Businesses". Also included in this category are deferred compensation investments which comprise investments in liquid mutual funds that the Company acquires to hedge its obligations to employees under certain non-qualified deferred compensation arrangements. These mutual fund investments can generally be redeemed at any time and are valued based upon quoted market prices.

The Company has elected the fair value option related to the $64.2 million receivable from BATS. It considers the receivable to be a Level 2 asset in the fair value hierarchy as the fair value is derived from observable significant inputs such as contractual cash flows and market discount rates.

The Company has elected the fair value option related to a receivable originating from the sale of an investment which is classified within Level 3 of the fair value hierarchy. The valuation of this financial instrument was based upon the use of a model developed by Company management. Inputs into this model were based upon risk profiles of similar financial instruments in the market and reflects management’s judgment relating to the appropriate discount on the receivable as well as a financial assessment of the debtor. To the extent that valuations based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.