WHEN a new man takes the helm of the Shanghai Stock Exchange next Friday, he will reign over an exchange with considerably weaker powers than when it first started. Brokers said that when the Beijing-based China Securities Regulatory Commission (CSRC) began flexing its muscles a few months ago, the Shanghai exchange had its wings clipped. 'There has always been a power struggle between the Shanghai government and exchange and the CSRC, although both parties will deny it,' the deputy general manager of a brokerage said. Until Zhou Daojiong's appointment as the CSRC chief in May, the Shanghai exchange used to be able to have its way. Now, the commission has the upper hand. Whereas the municipal government and the exchange used to decide on who can issue shares and how to control member brokerages, the final say now rests with the commission. Nothing illustrates the loss of power for Shanghai - for that matter the Shenzhen exchange also - than in the appointment of the general manager. In the past, the head of exchange was nominated by the Shanghai municipal government and confirmed by the CSRC. Now, the process had been reversed. 'The Shanghai Stock Exchange is increasingly being forced to play an intermediary role for investors and brokerages,' one analyst said. 'The Shanghai exchange used to be seen as too independent and not obedient enough to the CSRC and the central authorities,' said the head of another brokerage. Opportunities to weaken the Shanghai exchange's powers presented themselves when it was hit by two bond futures scandals in less than three months earlier this year. 'Now, control and standardisation are the catchwords for the industry. The days of rapid expansion are over,' the analyst said. Indeed, some said under such circumstances it would be difficult for the likes of Wei Wenyuan to survive without running into battles with the commission. Mr Wei is due to vacate the general manager's seat next Thursday. Yang Xianghai, director of the Shanghai Securities Administration Commission, has been tipped as the most likely successor. But industry sources said there was a chance of a last-minute change because Mr Wei's post was a notch lower than Mr Yang's position. Analysts said Mr Wei's successor would play a different role as the CSRC sought to standardise the regulatory and supervisory rules for the securities industry. Mr Zhou set the tone for the next stage of development when he said in June that under the Ninth Five-Year Plan, the industry would opt for healthy and steady development. He said the plan would focus on market supervision and standardisation of rules for investors and practitioners. Analysts said Mr Wei's departure next week would coincide with the end of an era of rapid expansion. 'It's a good time for him to step down,' one analyst said.