REFORM at the Hong Kong stock exchange has been a daily by-word for regulators and members working at the exchange. The unification of the territory's four exchanges into its current form came in 1986, following years of long, and sometimes, tortuous negotiation. Although the constitutional and physical structure of the exchange came into being at this time, the present exchange did not begin to emerge until much later. Modern-day reforms at the exchange emerged out of the financial typhoon called the Wall Street Crash of October 1987. On the day called Black Monday - October 19 - the stock exchange suspended trading for four days. In the ensuing controversy, the man identified as the founder of the exchange - Ronald Li - was arrested, tried and convicted on charges linked to the prior allotment of shares in new listings. The collapse of the exchange in the crash and the later arrest of its chairman was to trigger the biggest review of the territory's regulations ever. Under the leadership of Ian Hay Davison, the Securities Review Committee worked for months on reviewing what went wrong and how it could be put right. Rather than attributing blame, the report, published in the summer of 1988, offered a blueprint for change. The report covered almost every aspect of securities regulation. Out of the pages of the recommendations was born a new chief regulatory watch dog, the Securities and Futures Commission (SFC). This body, along with a newly professionalised stock exchange executive, began re-casting securities rules in Hong Kong. Over weeks and months, the SFC, launched in the summer of 1989, built a new rule book for the exchange and its members. The period between 1991 and 1992 proved extremely important in the reform process. The membership and election process for seats on the exchange council was reformed through a series of extraordinary general meetings of the stock exchange members. By 1993, most of the Davison report recommendation had been implemented and the way paved for automated trading and central clearing.