A total of 34 low-margin foreign-exchange brokers were ordered to suspend operations after legal restrictions on the business were toughened in July, and most of the 40.2 billion yen in their client deposits has become irrecoverable, a survey showed Thursday.

Twenty brokers in Tokyo, six in Osaka Prefecture, four in Fukuoka Prefecture, and one each in Iwate, Kanagawa, Aichi and Okayama prefectures were suspended, according to data compiled by local Finance Ministry bureaus.

The brokers served about 10,000 clients across the nation, and it has become difficult to recollect their deposits because many of the brokers ran off with the money or used it to finance other projects, a Financial Services Agency official said.

Low-margin foreign-exchange trading allows an individual to buy and sell a large amount of foreign currency -- 10 to 20 times -- with only a small deposit. Constantly fluctuating currency rates make it a high-risk business.

The sharp rise in fraudulent margin-exchange trading prompted the FSA to introduce rules in July to protect customers from such brokers.

Brokers are now banned from conducting aggressive soliciting. They also will be required to have their names registered next year.

In fiscal 2004, the number of consumer complaints involving such trading totaled 2,884, up from four in fiscal 2000, according to the National Consumer Affairs Center of Japan.

Many clients deposited large amounts of their money with the brokers because they were misled into believing the business was equivalent to regular foreign-currency trading, a center official said.