UPDATE 1-NASDAQ OMX to close pan-Europe platform Neuro

* Neuro's last trading day set for May 21

* Neuro is 4th-largest MTF after Chi-X, BATS and Turquoise

* Nordic to take responsibilty for pan-European trading

(Adds details, background, Thomson Reuters data)

LONDON, April 28 (Reuters) - Nasdaq OMX Group (NDAQ.O) said on Tuesday it would close its pan-European electronic trading platform after the new business failed to gain enough market share against increasingly tough competition.

The group set May 21 as the last trading day for Nasdaq OMX Europe, an alternative electronic platform or multilateral trading facility (MTF), also known as Neuro.

"Despite our best efforts, the increasingly competitive nature of the MTF space in Europe has mean that the growth of the business hasn't reached levels necessary for us to realize our stated objectives," said Eric Noll, executive vice president of Nasdaq OMX, in a statement.

Analysts and executives at Europe's leading MTFs have predicted some newcomers would drop out over the next few years as money-losing operations withdraw or merge with each other.

Chi-X Europe, the first and largest MTF, is the only one to have reached profitability so far out of several dozen transparent platforms and dark pools to have entered the market as EU regulation has opened traditional exchanges to competition.

Neuro, which kicked off in late September 2008, ranked as the 15th-largest pan-European venue in March, with a 0.87 percent market share, and the fourth-largest MTF after Chi-X, BATS and Turquoise, according to Thomson Reuters data.

Its trading turnover grew to about 6.3 billion euros ($8.39 billion) in March from 47 million in October 2008, the data showed.

Nasdaq acquired OMX, the operator of seven Nordic stock exchanges, in February 2008 after a long biddding war.

But it was not the game-changing deal that the U.S. behemoth had been looking for, while arch-rival NYSE was able to bag Euronext (NYX.N>, which owns one of Europe's two dominant and money-spinning derivatives as well as stock exchanges.

The group said it remained committed to London as a financial centre and that 40 percent of Nasdaq OMX Nordic trading comes from London-based clients.

Hans-Ole Jochumsen, president of Nasdaq OMX Nordic, will take over responsibility for pan-European trading after the roll-out of the Nasdaq INET trading system in all seven of its markets -- Copenhagen, Helsinki, Iceland, Stockholm, Riga, Tallinn and Vilnius.

Charlotte Crosswell, president of Neuro, will continue working to develop business in London and across Europe and help shift Neuro customers to NASDAQ OMX Nordic, the group said.

In February, Jochumsen had announced that the Nordic markets were migrating to the faster, cheaper, high-volume platform, which followed the adoption of harmonized tick sizes, the move to a central clearing house, and the introduction of a capped fee structure. [ID:nLDE6131XY]

Jochumsen said at the time he expected to have around 10 high-frequency traders among its members by the end of 2010. (Editing by Karen Foster) ($1=.7508 Euro)