Securities Law & Instruments


Clause104(2)(c) - relief from the issuer bid requirements of the Actin connection with a stock option plan where the plan permitsthe tender of shares by employees and directors in payment ofthe exercise price of options previously granted - "employee"issuer bid exemption under the Act is not available due to theacquisition price of the securities.


SecuritiesAct, R.S.O. 1990, c.S.5, as am., ss 95, 96, 97, 98, 100 and 104(2)(c).


R.S.O. 1990, CHAPTER S.5, AS AMENDED (the "Act")






UPONthe application (the "Application") of Instinet GroupIncorporated (the "Company") to the Ontario Securities Commission(the "Commission") for an order pursuant to clause 104(2)(c) ofthe Act exempting the Company from sections 95, 96, 97, 98 and100 of the Act and the regulations made thereunder (the "IssuerBid Requirements") with respect to certain acquisitions by theCompany of securities of its own issue pursuant to the Company's2000 Stock Option Plan (the "Plan");

ANDUPON considering the Application and the recommendationof the staff of the Commission;

ANDUPON the Company having represented to the Commissionas follows:

1.The Company is a leading supplier of global equity trading, fixedincome, research, and clearing and settlement services. Throughthe Company's services, its clients are able to communicate, negotiateand trade electronically with each other.

2.The Company is incorporated under the laws of the State of Delawareand is registered with the Securities Exchange Commission in theUnited States of America under the United States SecuritiesExchange Act of 1934 and is not exempt from the reportingrequirements of the Exchange Act pursuant to Rule 12G 3-2 madethereunder.

3.The authorized share capital of the Company consists of 950,000,000common shares (the "Shares") and 200,000,000preferred shares. As at August 9, 2001, there were 243,719,280Shares issued and outstanding.

4.The Company is not a reporting issuer under the Act and has nopresent intention of becoming a reporting issuer under the Act.

5.Shares subject to the Plan are listed and posted for trading inthe United States on the Nasdaq Stock Market.

6.The Plan was established to induce employees and directors toremain in the service of the Company and its affiliates, to attractnew individuals to enter into such employment or service and toencourage those individuals participating in the Plan to secureor increase their stock ownership in the Company. It is also intendedto promote continuity of management and personal interest in thewelfare of the Company by those who will be responsible for shapingthe long-range plans of the Company.

7.The Plan is open to all employees of the Company and its designatedaffiliates, including any individual who is expected to becomean employee and in certain circumstances to directors of the Company.

8.The Plan is available in Ontario only to employees and directors("Plan Participants") of subsidiaries in whichthe Company owns more than 50% of the voting interest. For thepurposes of this Application, the term "subsidiary" shall be soconstrued as it applies to employees and directors of the Companyand its subsidiaries resident in Ontario.

9.Grants of options to purchase Shares ("Options")under the Plan in Ontario took place on February 23, 2000, March2, 2001, and May 18, 2001 to selected employees of the Companyresident in Ontario.

10.Participation in the Plan by Plan Participants is voluntary andPlan Participants will not be induced to participate in the Planby expectation of or as a condition of employment or continuedemployment with the Company.

11.The Plan is administered by a committee (the "Committee")which has complete authority in its discretion to interpret thePlan and prescribe rules and regulations in relation to it.

12.The total number of Shares reserved for issuance under the Planis 34,118,000 Shares.

13.As at September 25, 2001, Ontario Shareholders do not hold, directlyor indirectly, more than 10% of the issued and outstanding Sharesof the Company and do not constitute more than 10% of the shareholdersof the Company. If at any time during the effectiveness of thePlan Ontario shareholders of the Company hold, in aggregate, greaterthan 10% of the total number of issued and outstanding Sharesor if such shareholders constitute more than 10% of all shareholdersof the Company, the Company will apply to the Commission for anorder with respect to further trades to and by Plan Participantsin Ontario in respect of Shares acquired under the Plan.

14.Plan Participants resident in Ontario who acquired and will subsequentlyacquire Options under the Plan will be provided with all disclosurematerial relating to the Company which is provided to holdersof awards resident in the United States.

15.The exercise price per Share under the Options shall be determinedby the Committee in its sole discretion, but in no event shallit be less than the fair market value of the Shares on the dateof grant. For the purposes of the Plan, the fair market valueof the Shares ("Fair Market Value") isdetermined in one of three ways:

(i)The reported closing selling price for the Shares on the precedingday on the principal securities exchange or national market systemon which the Shares are listed for trading.

(ii)If there are no sales of Shares on such preceding day, then thereported closing selling price for the Shares on the next precedingday for which such closing selling price is quoted will be determinative.

(iii)If the Shares are not traded on an established stock exchangeor a national market system, the determination shall be made ingood faith by the Committee based upon an independent appraisalreport.

16.The term of each Option shall be fixed by the Committee, but shallnot exceed ten years from the date of grant.

17.The Plan provides that the exercise of Options and the paymentof the exercise price (the "Exercise Price")in order to acquire Shares of the Company may be effected pursuantto the payment of cash, the surrender of Shares to the Companyor other consideration at the Fair Market Value on the exercisedate equal to the total Option price. Payment of the ExercisePrice through the surrender of Shares may be made provided suchShares have been held by the Plan Participant for at least sixmonths.

18.There is no market in Ontario for the Shares and none is expectedto develop.

19.Pursuant to the Plan, the acquisition of Shares by the Companyin certain circumstances from Plan Participants may constitutean "issuer bid" as defined under the Act. The terms of the Planpermit Plan Participants to tender Shares to the Company to satisfythe Exercise Price for Options granted. The issuer bid exemptionscontained in the Act may not be available for such acquisitions,since certain acquisitions may occur at a price that exceeds the"market price", as that term is defined in the Regulations tothe Act.

ANDUPON the Commission being satisfied that to do so wouldnot be prejudicial to the public interest;

ITIS ORDERED pursuant to subsection 104(2)(c) of the Actthat the acquisition by the Company in certain circumstances ofsecurities of its own issue from Plan Participants is exempt fromthe Issuer Bid Requirements.

February19, 2002.

"PaulMoore"       "K. D. Adams"