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                                                                   EXHIBIT 10.16

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

      WHEREAS, ANDRE F.H. VILLENEUVE, individually and on behalf of all his
successors, heirs, beneficiaries, Estate, executors, administrators, legal
representatives, and assigns (hereinafter referred to collectively as
"Villeneuve"), 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 Villeneuve's
employment with Instinet and the termination thereof;

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

      1. Termination of Employment. By mutual agreement between the parties, and
due to Villeneuve's desire to retire, Villeneuve's employment with Instinet
shall terminate on December 31, 2002 ("Termination Date"). Through the
Termination Date, Instinet will continue to pay Villeneuve at his current base
salary, with continuation of Instinet's benefit programs through such date.

      2. Separation Payments and Benefits. Instinet will pay Villeneuve (or in
the case of his death, to his spouse if living at the time payments are due, and
if not, then to his Estate) 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 Villeneuve 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.


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            (a) Severance Payments. Villeneuve will be entitled to receive
severance payments for a 23 month period (the "Severance Period") at the rate of
$600,000 per annum from the Termination Date through November 30, 2004. During
the Severance Period, Villeneuve will be eligible to continue his current health
and dental coverage for himself and his family, under the same terms as he now
enjoys those benefits or pursuant to the same terms offered to senior executives
of Instinet if the current terms are changed, but will not 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
annual bonuses for fiscal year 2002 are actually paid by Instinet to its active
employees but no later than February 28, 2003 whether or not any bonus is paid
to any active employee for fiscal year 2002 (the "Bonus Payment Date"), Instinet
will pay Villeneuve $396,000 as a pro rata bonus for fiscal year 2002.

            (c) 192% of Average Annual Bonus. Within five business days
following the Bonus Payment Date, Instinet will pay Villeneuve $861,120 as an
additional bonus payment.

            (d) Restricted Stock Units ("RSUs"). By or before March 31, 2003,
Instinet will cause the 6,101 RSUs (reduced by a number of shares, the fair
market value of which is sufficient to satisfy the applicable withholding taxes)
held by Instinet for benefit of Villeneuve to be converted into an equal number
of shares of Instinet common stock and to be delivered out in accordance with
appropriate instructions to be provided by Villeneuve.

            (e) New York Apartment. Instinet agrees that Villeneuve may continue
to use his New York City apartment (and will continue to receive the relevant
$25,000 per month net cost (excluding taxes and other required withholdings)
housing allowance


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related thereto) until January 31, 2003, by which date Villeneuve and his family
will have vacated the apartment. Villeneuve's housing allowance will also
terminate on January 31, 2003. Instinet will be responsible for the reasonable
cleaning costs for the apartment once it has been vacated.

            (f) Relocation Expenses. Instinet agrees to pay for (i) reasonable
travel costs and hotel expenses in January 2003 for Villeneuve and his family to
make up to two trips from the United Kingdom to New York to prepare for his
relocation and (ii) reasonable shipping, storage (not to exceed 30 days) and
relocation expenses incurred in Villeneuve's move from New York to the United
Kingdom.

            (g) Other Perquisites. Villeneuve agrees that all other additional
allowances and executive perquisites (including but not limited to his foreign
service supplement and his automobile allowance), except those specified in this
Agreement, will terminate on his Termination Date.

      3. Return of Instinet Property. Villeneuve agrees to return to Instinet by
no later than January 31, 2003 any and all property (including but not limited
to files, records, computer software, computer access codes, home computers,
cellular phones, 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, except Villeneuve may maintain his
personal computer and fax machine located in his London residence and his palm
pilot.

      4. Instinet Options. Villeneuve 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. Instinet agrees and acknowledges
that Villeneuve satisfies the requirements of a "Qualifying Retirement" for
purposes of the Plan.


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      5. Full Satisfaction.

      A. Villeneuve, by entering into this Agreement, accepts the benefits to be
conferred on him 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 Villeneuve's Employment Agreement dated
September 16, 2002, his United Kingdom Service Agreement dated April 30, 2001,
as amended on September 16, 2002, any other employment contract, service
agreement, 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.

      B. Instinet, by entering into this Agreement, accepts the promises and
waivers made by Villeneuve in this Agreement in full satisfaction of any and all
possible claims of any kind or description against Villeneuve as of the date of
this Agreement.

      6. Mutual Releases


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      A. Release By Villeneuve. Villeneuve acknowledges that certain payments
provided for in this Agreement are in excess of the amount that Villeneuve would
otherwise be entitled to receive and that Instinet has no obligation to enter
into this Agreement. In consideration thereof, Villeneuve 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
Villeneuve's Employment Agreement dated September 16, 2002, his United Kingdom
Service Agreement dated April 30, 2001, as amended on September 16, 2002, any
other employment contract, service agreement, 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, Villeneuve's
release and waiver do not apply to: (a) his rights arising out of this
Agreement; (b) any rights that Villeneuve 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 Villeneuve may have to
indemnification by Instinet which shall be the same as active employees and
directors of Instinet (including indemnification under Instinet's general
corporate indemnity) for acts undertaken by Villeneuve within the scope of his
duties while employed at Instinet.

      (B) Release By Instinet. Instinet releases and discharges Villeneuve from
any and all liability, and waives any and all rights of any kind and description
that it has or may have against Villeneuve, known or unknown, as of the date of
this Agreement, other than rights under this Agreement or arising as a result of
any criminal act of Villeneuve.


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      7. Non-Competition Covenant. Villeneuve agrees that he will not, through
November 30, 2004, 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:
(i) prevent Villeneuve from being employed by an entity that is in such
competitive business, provided that Villeneuve is not personally involved in the
day-to-day activities of such entity in such area; nor (ii) prevent Villeneuve
from consulting for an entity or industry association that competes with
Instinet, provided that Villeneuve does not consult with that portion of the
entity or trade association that competes with Instinet.

      8. Non-Solicitation Covenant. Villeneuve further agrees that he will not
(i) through November 30, 2004, 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
Villeneuve was employed by Instinet; or (ii) through November 30, 2004, directly
or indirectly solicit or initiate contact with 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 Villeneuve 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.


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      9. Non-Disparagement. Villeneuve 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.

      10. 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, Villeneuve shall use his best efforts to consult with Instinet prior to
responding to any such order or subpoena, Villeneuve 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 Confidential
Information has been previously disclosed to the public or is in the public
domain (other than by reason of Villeneuve's breach of this Section ).

      11. Rights To Intellectual Property. Villeneuve 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,


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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 Villeneuve 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, Villeneuve hereby irrevocably and absolutely
assigns, sets over and grants to Instinet the Instinet Intellectual Property and
all of his rights therein. Villeneuve 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.

      12. Consultation and Cooperation By Villeneuve. Villeneuve agrees to make
himself reasonably available to Instinet during the Severance Period, at
mutually agreed times and places, to respond to requests by Instinet for
information concerning facts or events relating to Instinet that may be within
his knowledge. Villeneuve will cooperate fully with Instinet in connection with
any or all future litigation or regulatory proceedings brought by or against
Instinet to the extent Instinet reasonably deems Villeneuve's cooperation either
necessary or helpful. In the event that Instinet requires Villeneuve's
cooperation, Instinet agrees to pay any of Villeneuve's reasonable expenses in
providing such cooperation (such as travel and accommodations).

      13. Change in Control. Instinet agrees that, should it experience a change
of control (whether through acquisition of a controlling interest by a new owner
or group of


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owners or otherwise), it will undertake to ensure that any successor entity
shall become contractually responsible for Instinet's obligations hereunder.
Should Instinet fail in its efforts to obtain agreement from the successor
entity to assume Instinet's obligations hereunder, all remaining cash benefits
and restricted stock obligations owed to Villeneuve by Instinet will become
immediately due and payable in full.

      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 Villeneuve and
Instinet as of the date hereof, and may not be modified except by a suitable
writing signed by both Villeneuve and Instinet. This Agreement has been entered
into by Villeneuve 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. Villeneuve and Instinet each acknowledge that a
violation on the part of the other of this Agreement, including in particular
violation of the provisions of paragraphs 7, 8, 9 and 10 would cause irreparable
damage to the other party. Accordingly, Villeneuve and Instinet each agree that
the other party 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. Villeneuve 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 Villeneuve pursuant to this
Agreement and that Instinet shall be entitled to recover all


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payments already made by it (including interest thereon), in addition to all
damages, attorney's fees and costs, Instinet incurs in connection with the
Villeneuve's proven breach of this Agreement. Villeneuve further agrees that
Instinet shall be entitled to the repayments and recovery of damages described
above without 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. Execution.

            a. Villeneuve acknowledges that he has been provided an opportunity
of up to forty-five (45) days from his receipt of this document to review it.
Upon execution, Villeneuve or his attorney must promptly send this document by
overnight mail to the General Counsel at Instinet. A copy may be retained by
Villeneuve.

            b. Following his signing of the Agreement, Villeneuve 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 Villeneuve signs this Agreement to
General Counsel, Instinet Corporation, 3 Times Square, New York, NY 10036. If
Villeneuve 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 Villeneuve 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.

      19. 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


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this Agreement may be brought in any court of competent jurisdiction located in
New York.

      20. 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 10th day of December, 2002.


ANDRE F.H. VILLENEUVE                      INSTINET GROUP INCORPORATED

/s/ Andre F.H. Villeneuve              By: /s/ Paul A. Merolla
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                                           Name: Paul A. Merolla
                                           Title: Executive Vice President,
                                                  General Counsel and Secretary

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.

                                                 ANDRE F.H. VILLENEUVE


                                         Signed: /s/ Andre F.H. Villeneuve
                                                 -----------------------------

THIS IS A RELEASE.  READ CAREFULLY BEFORE SIGNING.


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