New Delhi, Aug. 3 -- Manipulating stock closing prices will become significantly harder under the Securities and Exchange Board of India's (Sebi's) new auction mechanism starting Monday, despite the impetus for the change being more robust price discovery, according to a former regulatory official and big brokers.

Both NSE and BSE will transition 208 derivative-traded stocks from a continuous trading volume-based calculation to an auction-based mechanism during the closing session. Accurate closing prices are vital: they determine derivative settlements, benchmark comparisons for passive funds, and net asset value (NAV) calculations for mutual fund investors.

After extensive discussions with both domestic and foreign market stakeholders...