Investments

9 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Investments

Investments

Our equity investments, including our investments in Euroclear plc, or Euroclear, and Coinbase Global, Inc., among others, are subject to valuation under ASU 2016-01, Financial Instruments- Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. See Note 14 for a discussion of our determination of fair value of our financial instruments.

Investment in OCC

We own a 40% interest in the Options Clearing Corporation, or OCC, which is regulated by the SEC and the Commodity Futures Trading Commission, or CFTC, that we treat as an equity method investment. As of September 30, 2020, the OCC is our only equity method investment and is included in other non-current assets in the accompanying consolidated balance sheet. We recognized $84 million and $51 million during the nine months ended September 30, 2020 and 2019, respectively, and $49 million and $15 million during the three months ended September 30, 2020 and 2019, respectively, of equity earnings as our share of the OCC's estimated profits, which is included in other income. Included within the amounts recognized during the nine and three months ended September 30, 2020, is a $36 million cumulative adjustment to increase our equity earnings for our share of the OCC's estimated profits due to an increase in the OCC’s 2020 transaction revenues.

On February 13, 2019, the SEC disapproved the OCC capital plan that had been established in 2015. Following the SEC disapproval, the OCC also announced that it would not be providing a refund to clearing members or declaring a dividend to shareholders for the year ended December 31, 2018, which resulted in higher reported OCC 2018 net income than we

had estimated. Therefore, during the nine months ended September 30, 2019, we adjusted equity earnings in the OCC by $19 million in other income to reflect our share of the OCC's 2018 net income. Refer to Note 4 to our consolidated financial statements included in our 2019 Form 10-K for additional details on our OCC investment.

Investment in BIDS

We hold a 9% ownership interest in BIDS Trading, LP, or BIDS, which we treat as an equity investment subject to valuation under ASU 2016-01 (Note 14). BIDS is a registered broker-dealer and the operator of the BIDS Alternative Trading System. In October 2020, Cboe Global Markets announced its intent to purchase BIDS. Details have not been made publicly available, other than that the sale is expected to close in 2021, at which time we will record our financial statement impact.