When Prime Broking defaulted on its equity derivative positions at the National Stock Exchange, the central counterparty (CCP) suffered substantial losses, although there was no significant movement in the relevant market prices. This revealed hidden risks arising from collateral, liquidity and concentration, wrong-way risks and operational risks in the default management process, even when the market risk environment is benign. The CCP ends up with risks it is not designed to handle and similar to those faced by a bank. The CCP suffered massive losses, even though its market risk models functioned flawlessly.