In 2014, we made a long-term strategic decision to change our delivery of certain administrative services, including fund accounting and other investment recordkeeping operations. We are currently in negotiations with BNY Mellon was contracted to perform these services. Ifprovide such services and 210 associates became employees of BNY Mellon on August 1, 2015. BNY Mellon will transition our data to its technology platform over time. Though a formal agreement is reached,few line items of our consolidated income statements, including administrative revenues, compensation and related costs, and other operating expenses, will be affected, we do not expect that the net impact on our future operating results will be material.

U.S. equities, as measured by the S&P 500 Index, rose in 20142015 for the sixthseventh consecutive year. The S&P 500 Index and the NASDAQ Composite Index, which is heavily weighted in technology companies, returned 13.7%1.4% and 13.4%5.7%, respectively, in 2014.2015. Equities in developed non-U.S. markets declinedwere mixed, while emerging market equities fared poorly around the world due in part to the broad currency weakness versus the U.S. dollar which hurt investor returns in dollar terms in 2014, as a stronger U.S. dollar versus other currencies reduced overseas returns to U.S. investors. Emerging markets equities, in aggregate, declined in dollar terms but held up better than developed non-U.S. markets.terms. Global bonds produced mostly positive returns were also mixed in 2014.2015. In this market environment, our 2015 results were as follows:

Our subsidiaries, T. Rowe Price (Luxembourg) Management Sàrl and T. Rowe Price International provide management company and investment management services, respectively, to our Luxembourg-based SICAVs (Société d'Investissement à Capital Variable) and FCPs (Fonds Commun de Placement). These funds are distributed outside the U.S. through distribution agents and other financial intermediaries. The fees earned for these distribution and marketing services are part of the overall investment management fees earned for managing the SICAV and FCP fund assets. We recognize any related distribution fees paid to financial intermediaries in other operating expenses. At December 31, 2014,2015, assets under management in these funds were $11.2$10.3 billion.

Our money market funds' and portfolios' performance or yield is dependent on the income earned from the underlying securities exceeding the operating costs of the fund. When interest rates are at or near the historic lows, the operating costs of the funds will become a greater portion of the portfolio's net income, thereby reducing the yield of the funds to very low levels. Since the second half of 2009, such an environment has led us to voluntarily waive our advisory and other fees earned on our money market funds and trusts in order to maintain yields at or above 0% for fund investors. Such actions reduce our advisory fee income and net income. The actual amount of fees waived is dependent on a number of variables including, among others, changes in the net assets held by our money market funds, changes in market yields, changes in the expense levels of the funds, and our willingness to voluntarily continue such fee waivers. Also, bank deposits may become more attractive to investors and money market funds could experience significant redemptions, which could decrease our revenues and net income. For further discussion of the fees we waived in the current period, management's expectation as to future fee waivers, and the net cash flows of our money market funds and trusts, please see our Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Form 10-K.

LEGAL AND REGULATORY RISKS.

If we are unable to maintain compliance with applicable laws and regulations, we could be subject to criminal and civil liability, the suspension of our employees, fines, penalties, sanctions, injunctive relief, exclusion from certain markets, or temporary or permanent loss of licenses or registrations necessary to conduct our business. A regulatory proceeding, even if it does not result in a finding of wrongdoing or sanctions, could consume substantial expenditures of time and capital. Any

regulatory investigation and any failure to maintain compliance with applicable laws and regulations could severely damage our reputation, adversely affect our ability to conduct business, and decrease revenue and net income.

Our regulatory environment is frequently altered by new regulations and by revisions to, and evolving interpretations of, existing regulations. Future changes could require us to modify or curtail our investment offerings and business operations, or impact our expenses and profitability. Additionally, some regulations may not directly apply to our business but may impact the capital markets, service providers or have other indirect effects on our ability to provide services to our clients.

Potential impacts of current or proposed legal or regulatory requirements include, without limitation, the following:

We cannot predict the nature of future changes to the legal and regulatory requirements applicable to our business, nor the extent of the impacts that will result from current or future proposals. However, any such changes are likely to increase the costs of compliance and the complexity of our operations. They may also result in changes to our product or service offerings. The changing regulatory landscape may also impact a number of our service providers and to the extent such providers alter their services or increase their fees it may impact our expenses or those of the products we offer.

We are subject to regulatory and governmental inquiries and civil litigation. An adverse outcome of any such proceeding could involve substantial financial penalties. From time to time, various claims against us arise in the ordinary course of business, including employment-related claims. There also has been an increase in litigation and in regulatory investigations in the financial services industry in recent years, including customer claims, class action suits, and government actions alleging substantial monetary damages and penalties.

We carry insurance in amounts and under terms that we believe are appropriate. We cannot be assured that our insurance will cover every liability and loss to which we may be exposed, or that our insurance policies will continue to be available at acceptable terms and fees. Certain insurance coverage may not be available or may be prohibitively expensive in future periods. As our insurance policies come up for renewal, we may need to assume higher deductibles or co-insurance liabilities, or pay higher premiums, which would increase our expenses and reduce our net income.

Certain of our subsidiaries are subject to net capital requirements imposed by various federal, state, and foreign authorities. Each of our subsidiaries’ net capital meets or exceeds all current minimum requirements; however, a significant change in the required net capital, an operating loss, or an extraordinary charge against net capital could adversely affect the ability of our subsidiaries to expand or even maintain their operations if we were unable to make additional investments in them.

Major U.S. equities, as measured bystock index returns were narrowly mixed in 2015, but it was the seventh consecutive year for a positive S&P 500 Index rose in 2014 fortotal return. In the sixth consecutivefirst part of the year, as the economy rebounded stronglyequities benefited from a first-quarter weather-related contraction. Althoughsteady economic and employment growth, faltered overseas and geopolitical tensions increased because of Russia’s actions involving Ukraine and international sanctions, the U.S. market was supported by falling long-term interest rates,generally favorable corporate earnings outside of the energy sector, and expandedmerger and acquisition activity. During the summer, U.S. and global equities fell sharply in response to an unexpected devaluation of China’s currency and subsequent plunge in Chinese stocks, raising concerns about China’s decelerating economy, and uncertainty regarding China’s leadership and policy responses. U.S. markets pared their losses in the final months of the year as global market volatility subsided amid hopes for additional stimulus measures in Europe and Asia, even as the Federal Reserve prepared to raise short-term U.S. interest rates. On December 16, 2015, the U.S. central bank raised the fed funds target rate range to 25 to 50 basis points. It had been 0 to 25 basis points since December 2008.

Stocks in developed non-U.S. markets were mixed. Japanese stocks strongly outpaced other developed Asian markets in dollar terms, helped by the Bank of Japan’s stimulus efforts, lower energy prices, and increased capital spending. The Japanese economy narrowly avoided a recession as it grew modestly in the third quarter following a second-quarter contraction. European markets rose in local currency terms, but a 10% decline in the euro versus the dollar reduced returns in dollar terms. Eurozone inflation and economic growth remained stubbornly weak throughout the year despite the European Central Bank’s (ECB) quantitative easing program, and many investors were disappointed with the ECB’s relatively mild expansion of its stimulus efforts in early December.

Emerging markets equities fared poorly around the eurozoneworld, as large resource-exporting countries Brazil and Japan. Also, tumbling oilRussia were in recession, in part, because of the collapse in commodity prices, and broad currency weakness versus the U.S. dollar hurt returns in dollar terms. Most Asian markets declined, as Chinese stocks fell sharply in the second half of the year, though unfavorable for the energy sector, were seen as a generally positive factor for the U.S.2015.

Government bondsBonds in developed non-U.S. markets produced moderate losses indeclined over the last year as a stronger U.S. dollar terms, asversus other major developed market currencies, especially the strongereuro, resulted in negative returns in dollar more than offset local-currency gains stemming from declining yields in key government bond markets. Emerging markets bonds performed well amid persistent demand for higher-yielding assets and as concerns about the impact of Fed tapering on global liquidity diminished as the year progressed. Dollar-denominatedterms. U.S. dollar-denominated emerging markets debt advanced modestly but significantly outperformed local currency bonds, performed better than local-currency issues.which posted steep losses as nearly all developing market currencies weakened versus the dollar. Plunging commodity prices, expectations for rising short-term U.S. interest rates, and country-specific factors weighed on local currency bond performance.