To safeguard markets from systemic risks, Securities and Exchange Board of India has put in place a new layer of safety net in form of 'core settlement guarantee fund' to mitigate risks from possible default in institutional trades. The SEBI said, the new system will enhance the robustness of the present risk management system of the clearing corporations to enable them to deal with defaults of the clearing members much more effectively. This new core fund will be created within the existing Settlement Guarantee Fund (SGF), against which no exposure is given and which is readily and unconditionally available to meet settlement obligations of clearing corporation in case of clearing members failing to honour settlement obligation. While aligning the stress testing practices of clearing corporations in India with best global practices prescribed by IOSCO, a global body of regulators, the new system will take into account risk due to possible default in institutional trades. It will also harmonise 'default waterfalls' across clearing corporations, limit the liability of non-defaulting members and ring-fence each segment of clearing corporation from defaults in other segments.