What is T plus 2 rolling settlement cycle?

T plus 2 (T+2) rolling settlement cycle refers to the standard time frame in which securities transactions are settled, occurring two business days after the trade date (T). This means that if a trade is executed on Monday, the settlement will take place on Wednesday. The "rolling" aspect indicates that each trade settles independently based on its own trade date, allowing for continuous processing of transactions. This system enhances liquidity and reduces counterparty risk in financial markets.