T+1 settlement refers to the requirement that securities transactions must be finalized one business day after the trade date. This means that when a trade is executed, the buyer must pay for the securities and the seller must deliver them by the end of the next business day. The T+1 settlement cycle reduces the time between trade execution and settlement, helping to lower credit and market risks. This accelerated process enhances market efficiency and reduces the risk of default by either party. T+1 settlement is increasingly adopted in global markets to improve security and transparency in financial transactions.