Nasdaq OMX Group Inc. (NDAQ) is suspending a planned stock-clearing service, one of several measures pursued by the exchange operator to boost its falling market share in the U.S.

Nasdaq OMX had planned to introduce cash equities clearing in the fourth quarter of this year, but said Thursday that it is abandoning the plan after the Depository Trust & Clearing Corp., which clears nearly all U.S. cash equity trades, lowered its fees.

"The anticipation of competition had the desired effect and moved the single incumbent clearing provider to lower prices and provide assurances that it will improve processes," a Nasdaq representative said Thursday.

A spokesman for the DTCC noted that the New York clearing firm has continually lowered its fees for several years, long before Nasdaq OMX announced its push into clearing.

"They have never substantiated that they could deliver clearing cheaper than us," said the DTCC's Stuart Goldstein.

The DTCC operates as a utility owned by the major stock market participants and holds a virtual monopoly on clearing U.S. cash equity trades.

Clearing, in which a central counterparty stands as the buyer to every seller and the seller to every buyer, lowers the credit risk associated with trading.

Despite the DTCC offering clearing services at cost, Nasdaq OMX executives had said that they could find cheaper ways to clear transactions--and create new order types that could stem a decline in Nasdaq OMX's share of U.S. stock trading.

Nasdaq OMX and traditional rival NYSE Euronext (NYX) have both seen their U.S. stock-trading business come under pressure, as smaller competitors BATS Exchange Inc. and Direct Edge ECN LLC took a bigger share of the U.S. market with low prices and new stock order-routing strategies.

Thanks to competitive pricing programs, Nasdaq OMX's market share has rebounded to about 24% from its May low of 21%, but it remains below last October's 30%, according to a Raymond James report.

The exchange operator is also prepping a third U.S. stock platform to complement the Nasdaq Stock Market and Nasdaq OMX BX.

Goldstein said that the DTCC was "pleased" with the suspension of Nasdaq OMX's clearing plan, which the DTCC had warned could destabilize U.S. capital markets.

"Bifurcating the clearing process in the U.S. would create more systemic risk, and that concern resonated with the industry," he said, adding that the DTCC looks forward to working with Nasdaq OMX on other projects.

Nasdaq OMX could resume its stock-clearing push in the future. The exchange operator retains two clearinghouse licenses, acquired via its acquisitions of the Boston Stock Exchange and the Philadelphia Stock Exchange.

Officials said the company will remain watchful for opportunities to lower clearing costs.

Nasdaq OMX continues to develop clearing services for the interest rate swap market through its International Derivatives Clearing Group unit, which is test-clearing approximately $200 billion a month.

That effort follows on a regulator-backed push to route more over-the-counter derivatives transactions through clearinghouses in an effort to lower systemic risk.

Nasdaq OMX also maintains an equity position in the European Multilateral Clearing Facility and is incorporating clearing into a planned power market for the U.K.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com