T+1 settlement cycle denotes that all trade-related settlements must be finished one day after the transaction date.
1. The T+1 settlement cycle aims to improve trading speed and efficiency on the stock market.
2. Since the margin will be released on T+1 day and traders will receive the funds within 24 hours of selling the shares, this will also assist traders in lowering the overall capital requirement. Rolling money and stocks around the market will be simpler.
3. The quantity of open trades will decrease over time with a shorter settlement cycle.
4. The shorter the settlement cycles, the smaller the timeframe for a counterparty bankruptcy to affect the trade cycle.