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                                                                   EXHIBIT 10.18

                                                                  EXECUTION COPY

                        SETTLEMENT, RELEASE, COVENANT NOT
                   TO SUE, WAIVER AND NON-DISCLOSURE AGREEMENT

      WHEREAS, MICHAEL J. CLANCY, individually and on behalf of all his
successors, heirs, executors, administrators, legal representatives, and assigns
(hereinafter referred to collectively as "Clancy"), and INSTINET GROUP
INCORPORATED, on behalf of its parents, subsidiaries divisions and affiliates,
and their respective predecessors, successors, assigns, representatives,
officers, directors, shareholders, agents, employees and attorneys (hereinafter
referred to collectively as "Instinet"), have reached agreement with respect to
all matters arising out of Clancy's employment with Instinet and the termination
thereof;

      NOW, THEREFORE, in consideration of the mutual convenants and undertakings
set forth herein, Clancy and Instinet agree as follows:

      1. Termination of Employment. By mutual agreement between the parties,
Clancy's employment with Instinet shall terminate on December 15, 2002
("Termination Date"). Through the Termination Date, Instinet will continue to
pay Clancy at his current base salary of $275,000 per annum, with continuation
of Instinet's benefit programs through such date.

      2. Separation Payments and Benefits. Instinet will pay Clancy the amounts
described below, subject to the provisions of this Agreement. The payments to be
provided by this paragraph are in place of, and not in addition to, payments
Clancy would otherwise be entitled to pursuant to any policy or practice of
Instinet. All payments made pursuant to this paragraph will be reduced by any
and all applicable payroll deductions including, but not limited to, federal,
state and local tax withholdings.

            (a) Severance Payments. Clancy will be entitled to receive severance
payments for a 12 month period (the "Severance Period") at the rate of $275,000
per annum from the Termination Date through December 15, 2003. During the
Severance Period, Clancy will be eligible to continue his current health and
dental coverage for himself and his family, but will not


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be eligible for life insurance, 401(k) contributions, long-term disability
insurance or any other perquisites or benefits.

            (b) Pro Rata Bonus. Within five business days following the date
(the "Bonus Payment Date") annual bonuses for such fiscal year are actually paid
by Instinet to its active employees, Instinet will pay Clancy $262,466 as a pro
rata bonus for fiscal year 2002.

            (c) 50% of Average Annual Bonus. Within five business days following
the Bonus Payment Date, Instinet will pay Clancy $148,750 as an additional bonus
payment.

      3. Return of Instinet Property. Clancy agrees to return to Instinet by no
later than ten days following the Termination Date, any and all property
(including but not limited to files, records, computer software, computer access
codes, home computers, laptop computers, pagers, Palm Pilots, Blackberries, fax
machines, company IDs, business credit cards, proprietary and confidential
information) which belongs to Instinet, and shall not retain any copies,
duplicates or excerpts thereof. The foregoing notwithstanding, Instinet agrees
that Clancy may keep and maintain his Instinet-supplied cellular telephone,
provided that: (i) Clancy provides appropriate billing information to enable the
transfer of financial responsibility with regard thereto from Instinet to Clancy
personally; and (ii) the transfer of such payment obligation is satisfactorily
concluded.

      4. Outplacement Services. At the request of Clancy, Instinet will make
available executive outplacement services to Clancy, to be provided by Beam
Pines or other mutually agreeable outplacement firm, for a period of up to six
months. These services will include the provision of an office and telephone for
Clancy to use during the outplacement period.

      5. Instinet Options. Clancy agrees that any options awarded to him under
Instinet 2000 Stock Option Plans (the "Plan") will be treated as provided in the
Plan and the relevant option agreements.


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      6. Full Satisfaction. Clancy, by entering into this Agreement, accepts the
benefits to be conferred on his hereunder in full and complete satisfaction of
any and all asserted and unasserted claims of any kind or description against
Instinet as of the date of this Agreement, including, but not limited to, claims
arising under any federal, state and local fair employment practice law,
workers' compensation law, and any other employee relations statute, executive
order, law and ordinance, including, but not limited to, Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act of
1967, as amended, the Rehabilitation Act of 1973, as amended, the Family and
Medical Leave Act, the Americans With Disabilities Act of 1990, as amended, the
Civil Rights Acts of 1866 and 1871, and, except as otherwise expressly set forth
herein, of any other duty and/or other employment related obligation (all of
which are hereinafter referred to as "employment relations laws") as well as any
claims arising from tort, tortious course of conduct, contract (including
without limitation any claims arising under Clancy's Employment Agreement dated
June 1, 2002, any offer letter or secondment letter), obligations of "good
faith," public policy, statute, common law, equity, and all claims for wages and
benefits, monetary and equitable relief, punitive and compensatory relief, and
attorneys' fees and costs.

      7. Releases.

      (A) In consideration of the covenants and undertakings above, Clancy
releases and discharges Instinet from any and all liability, and waives any and
all rights of any kind and description that he has or may have against Instinet
as of the date of this Agreement, including, but not limited to, any asserted
and unasserted claims arising from any employment relations laws, tort, tortious
course of conduct, contract (including without limitation any claims arising
under Clancy's Employment Agreement dated June 1, 2002, any offer letter or
secondment letter), public policy, statute, common law, and equity, and claims
for wages and benefits, monetary and equitable relief, punitive and compensatory
relief, and attorneys' fees and costs. The foregoing notwithstanding, Clancy's
release and waiver do not apply to: (a) his rights arising


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out of this Agreement; (b) any rights that Clancy and any covered dependents may
have to purchase health benefit continuation coverage under federal law commonly
known as COBRA; (c) any accrued and vested payouts or benefits under Instinet
qualified benefit plans; or (d) any rights that Clancy may have to
indemnification under Instinet's general corporate indemnity for acts undertaken
by Clancy within the scope of his duties while employed at Instinet.

      (B) Instinet releases and discharges Clancy from any and all liability,
and waives any and all rights of any kind and description that it has or may
have against Clancy as of the date of this Agreement, regarding which Instinet
has actual knowledge or should have had knowledge, other than rights under this
Agreement or arising as a result of any criminal act of Clancy.

      8. Non-Competition Covenant. Clancy agrees that he will not, through
December 15, 2003, directly or indirectly, become employed by, engage in
business with, serve as an agent or consultant to, or become a partner, member,
principal, stockholder or other owner (other than a holder of less than 1% of
the outstanding voting shares of any publicly held company) of, any business
which shall provide securities brokerage or financial services through the
Internet or any similar medium of electronic commerce (including without
limitation the business of an ECN, ATS or their equivalent), from an operational
base located anywhere within the United States. This Section shall not, however,
prevent Clancy from being employed by an entity that is in such business,
provided that Clancy is not personally involved in the day-to-day activities of
such entity in such area.

      9. Non-Solicitation Covenant. Clancy further agrees that he will not (i)
through December 15, 2003, directly or indirectly solicit any employee of
Instinet to leave the employ of Instinet, or otherwise interfere with the
relationship of Instinet or any of its Affiliates with any natural person
throughout the world who is or was employed by or otherwise engaged to perform
services for Instinet or any of its Affiliates at any time during which Clancy
was employed by Instinet; or (ii) through December 15, 2003, directly or
indirectly solicit or initiate contact with


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any Instinet client to transact with any other company business in which
Instinet is engaged, including but not limited to institutional equities,
order-matching, clearing and after-hours trading, or to reduce or refrain from
doing any business with Instinet. The term "client" means any client of Instinet
with whom Clancy had personal contact, or for whom he personally transacted
business, or whose identity became known to him in connection with his
relationship with or employment by Instinet.

      10. Non-Disparagement. Clancy and Instinet each agree that except, for
truthful statements in any proceeding to enforce this Agreement or pursuant to a
valid Subpoena or Court Order, neither will make or publish any statement
(orally or in writing) that becomes or reasonably could be expected to become
publicly known, or instigate, assist or participate in the making or publication
of any such statement, which would libel, slander or disparage (whether or not
such disparagement legally constitutes libel or slander) the other or, with
respect to Instinet, any of its affiliates or any other entity or person within
Instinet or its affiliates, any of their affairs or operations, or the
reputations of any of their past or present officers, directors, agents,
representatives and employees.

      11. Unauthorized Disclosure. Without the prior written consent of
Instinet, except to the extent required by an order of a court having
jurisdiction or under subpoena from an appropriate government agency, in which
event, Clancy shall use his best efforts to consult with Instinet prior to
responding to any such order or subpoena, Clancy shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
programs, software, protocols, information regarding product development,
marketing plans, sales plans, manufacturing plans, management organization
information, operating policies or manuals, business plans, financial records,
packaging design or other financial, commercial, business or technical
information (a) relating to Instinet or any of its Affiliates or (b) that
Instinet or any of its Affiliates may receive belonging to suppliers, customers
or others who do business with Instinet or any of its Affiliates (collectively,
"Confidential Information") to any third person unless such


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Confidential Information has been previously disclosed to the public or is in
the public domain (other than by reason of Clancy's breach of this Section).

      The parties further agree that the terms of this Agreement, and the
negotiations leading up to it shall not be disclosed by the parties to any
person, other than in a proceeding to enforce the terms of this Agreement or
pursuant to valid subpoena or court order, with the exception of the parties'
lawyers, accountants, tax preparers and, with respect to Clancy, his immediate
family, provided that the parties inform any such persons that they must not
disclose the same to any person and they agree to that condition. In response to
any inquiry from third parties, the parties and their attorneys may state only
that the parties have resolved the matter.

      12. Rights To Intellectual Property. Clancy acknowledges and agrees that
Instinet is the sole and exclusive owner of all right, title and interest in and
to all trademarks, copyrights and all other rights in and to all software,
computer programs, works of authorship, writings (whether or not copyrightable),
inventions (whether or not patentable), discoveries, methods, improvements,
processes, ideas, systems, know-how, data, and any other intellectual creations
of any nature whatsoever that Clancy developed, or assisted in the development
of, in the course of his employment by Instinet (collectively, the "Instinet
Intellectual Property"). All Instinet Intellectual Property is deemed to be
"work made for hire" pursuant to the United States Copyright Act of 1976 (the
"Act") and Instinet thereby owns all right, title and interest in all Instinet
Intellectual Property. To the extent that the Instinet Intellectual Property or
any part thereof is deemed by any court of competent jurisdiction or any
governmental or regulatory agency not to be a "work made for hire" within the
meaning of the Act, the provisions of this section will still control and, for
the consideration set forth herein, Clancy hereby irrevocably and absolutely
assigns, sets over and grants to Instinet the Instinet Intellectual Property and
all of his rights therein. Clancy further agrees to deliver or execute such
documents and to do or refrain from doing such acts as Instinet or its nominee
may reasonably request to protect its rights in the Instinet Intellectual
Property.


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      13. Reemployment or Reinstatement. Clancy agrees not to seek reinstatement
or reemployment with Instinet, and hereby waives any rights that may accrue to
his from any rejection of any application for employment with Instinet that he
may make.

      14. No Admission of Liability. By entering into this Agreement, the
parties do not admit to any liability, wrongdoing, breach of any contract,
commission of any tort or the violation of any statute or law alleged by the
other to have been violated or otherwise.

      15. Entire Agreement and Severability. This Agreement constitutes the
complete settlement of all issues and disputes existing between Clancy and
Instinet as of the date hereof, and may not be modified except by a suitable
writing signed by both Clancy and Instinet. This Agreement has been entered into
by Clancy and Instinet voluntarily, knowingly, and upon advice of counsel. If
any provision of this Agreement is held to be invalid, the remaining provisions
shall remain in full force and effect.

      16. Injunctive Relief. Clancy acknowledges that a violation on Clancy's
part of this Agreement, including in particular violation of the provisions of
paragraphs 8, 9,10 and 11 would cause irreparable damage to Instinet.
Accordingly, Clancy agrees that Instinet is entitled to injunctive relief from
any court of competent jurisdiction for any actual or threatened violation of
this Agreement in addition to any other remedies it may have.

      17. Breach of Agreement. Clancy agrees that, without limiting Instinet's
remedies, should he commence, continue, join in, or in any other manner attempt
to assert any claim released in connection herewith, or otherwise violate in a
material fashion any of the terms of this Agreement, Instinet shall not be
required to make any further payments to Clancy pursuant to this Agreement and
that Instinet shall be entitled to recover all payments already made by it
(including interest thereon), in addition to all damages, attorney's fees and
costs, Instinet incurs in connection with the Clancy's proven breach of this
Agreement. Clancy further agrees that Instinet shall be entitled to the
repayments and recovery of damages described above without


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waiver of or prejudice to the release granted by him in connection with this
Agreement, and that his proven violation or breach of any provision of this
Agreement shall forever release and discharge Instinet from the performance of
its obligations arising from the Agreement.

      18. Attorney Fees. The parties agree that, in any suit brought by either
party for breach of this Agreement by the other, the non-prevailing party will
be liable for the reasonable attorneys fees of the prevailing party.

      19. Execution.

            a. Clancy acknowledges that he has had up to twenty-one (21) days
from his receipt of this document to review it. Upon execution, Clancy or his
attorney must promptly send this document by overnight mail to the General
Counsel at Instinet. A copy may be retained by Clancy.

            b. Following his signing of the Agreement, Clancy has the right to
revoke the Agreement at any time within seven (7) calendar days of his signing
it, not including the date of his signing (the "Revocation Period"). Notice of
Revocation shall be given in writing and sent by overnight mail no later than
the seventh day following the date Clancy signs this Agreement to General
Counsel, Instinet Corporation, 3 Times Square, New York, NY 10036. If Clancy
does not revoke the Agreement, this Agreement shall be deemed to be effective
and to be enforceable as of the last date set forth opposite any signature
hereto. If Clancy gives Notice of Revocation during the Revocation Period in the
manner specified above, this Agreement shall become null and void and all rights
and claims of the parties which would have existed, but for the execution of
this Agreement shall be restored.

      21. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the law of the State of New York. An action for
breach of this Agreement may be brought in any court of competent jurisdiction
located in New York.


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      22. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the heirs, successors and assigns of the parties hereto.

      THE UNDERSIGNED, intending to be legally bound, have executed this
Agreement on this 15th day of December, 2002.


MICHAEL J. CLANCY                               INSTINET GROUP INCORPORATED


/s/ Michael J. Clancy                       By: /s/ John F. Fay
-------------------------------                 --------------------------------
                                                Name: John F. Fay
                                                Title: Chief Financial Officer

STATEMENT BY THE EMPLOYEE WHO IS SIGNING BELOW: INSTINET HAS ADVISED ME IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE. I HAVE
CAREFULLY READ AND FULLY UNDERSTAND THE PROVISIONS OF THIS RELEASE AND HAVE HAD
SUFFICIENT TIME AND OPPORTUNITY TO CONSULT WITH MY PERSONAL TAX, FINANCIAL AND
LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT, AND I INTEND TO BE LEGALLY
BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE THIS RELEASE WITHIN SEVEN (7)
DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL NOT BECOME ENFORCEABLE OR
EFFECTIVE UNTIL THAT SEVEN (7) DAY PERIOD HAS EXPIRED.

                                                     MICHAEL J. CLANCY


                                            Signed: /s/ Michael J. Clancy
                                                    ----------------------------

THIS IS A RELEASE. READ CAREFULLY BEFORE SIGNING.


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