Despite fears the handover will result in more business-related corruption in the territory, brokers and analysts remain confident that the stock market can maintain its reputation as one of the most transparent in Asia. It has been argued that due to natural selection the only analysts left in the territory are optimists. Whatever the case, a straw poll of market players reveals that most believe Hong Kong has, in fact, seen a decline in rat trading, insider trading, stock ramping and bribery since the Securities and Futures Commission (SFC) was established in 1989. They expect that trend to continue. While 'attempted' corruption may increase, industry insiders are confident that Hong Kong's regulatory bodies are strong enough to combat the challenge. A director at a local brokerage who, like most sources interviewed for this story, asked to remain anonymous, said: 'Some Chinese may come here and think they can be cowboys, but they can't and somebody is going to get into trouble.' They will be helped by the Chinese Government, which is eager for Hong Kong to maintain its clean reputation. The head of research at a British brokerage said: 'Beijing will want to give the impression that Hong Kong is cleaner under Chinese rule than under the British.' Others were somewhat more sceptical. An analyst at a local fund management company said: 'China is more corrupt than Hong Kong, so when they come together there has to be some equalisation.' An official at the enforcement division at the SFC said confidentially that his department was investigating more cases than ever. The increase was due to more available manpower rather than a surge in illegal activity, he said. DBS Securities research director Percy Au-young felt the Hong Kong market had 'matured' in the past few years. Recent scandals had helped to speed up that process. 'After Jardine Fleming, every house has strengthened their compliance rules,' he said. A number of sources said the increased presence of big international brokerages was helping to raise standards in the market. US investment banks, in particular, enforced stringent compliance rules. No one doubted that mainland markets have a problem with corruption. The uncertainty is over whether recent moves to crack down on irregularities in China are more than cosmetic. Earlier this month, Chinese authorities for the first time suspended trade in five mainland companies due to irregular price movements. They have also banned speculation by state-owned firms. Salomon Brothers analyst Michael Green argued that a double-standard was being used when judging China. Corruption cases involving international brokerages were usually attributed to rogue traders, while similar scandals at Hong Kong or mainland institutions were blamed on China's 'history of corruption'. 'Some of the worst corruption cases involved foreigners - look at [former government prosecutor] Warwick Reid,' Mr Green said. One widely held belief was that the Chinese companies and investors moving into the territory could inadvertently break the rules because they are unfamiliar with local regulations. Such ignorance combined with the prevailing fervour for China-related stocks was bound to foster some illegality, sources said. 'We are seeing red-chip mania, but when this theme runs out, we may find some ugliness under the surface,' a fund manager said. The question is whether such activities will ever be brought to light. A director at a local brokerage said: 'Even now people are saying that the authorities are turning a blind eye to red chips while jumping all over smaller companies.'