National Security and Investment Act: A Year Of Change

Thursday, 29 October 2026

The National Security and Investment Act 2021 (NSIA) has now been in force for more than four years and has become an important early-stage consideration in UK M&A transactions. During the last year the Government has decided to fine-tune the existing regime: by removing the regulatory burden on investors of making a notification where transactions are least likely to raise national security concerns and introducing additional focus areas e.g. the inclusion of a new sector to cover water.

Currently, under the NSIA, acquisitions of shares above certain thresholds in UK companies active in one or more of 17 specified sectors of the economy (deemed to have strategic national importance) are subject to mandatory notification and cannot complete until clearance is received, though planned changes are to be implemented in the coming months.

The Government also has wider powers to “call in” transactions which it considers may lead to national security concerns, including some transactions which do not fall within the mandatory notification regime e.g. where the activities of the target do not squarely fall within a sector definition but where those activities may be closely related to a sector definition.

More notifications, limited intervention

The latest NSIA Annual Report, covering the period from 1 April 2025 to 31 March 2026, shows that the overall number of notifications continues to increase. The Government received 1,324 notifications during this period, compared with 1,143 in the previous year. Out of these, 1,135 were mandatory notifications.

However, the large majority of transactions are still cleared without any further action. Of the 1,220 notified acquisitions reviewed during the year, 95.6% were cleared without further action and only 4.4% were called in. Nine final orders were made, with eight transactions allowed to proceed subject to conditions and only one transaction was blocked.

This is quite important in practice, as the requirement to make an NSIA notification does not necessitate that the transaction creates a national security concern. However, nevertheless in a significant volume of transactions there may be a mandatory requirement to file, with the potential for financial penalties for failing to do so, and a statutory waiting period (of 30 working days following notification) to obtain clearance before being able to complete the transaction. This means that the requirement to file still needs to be identified, and the timing for obtaining clearance factored in early on in the transaction, even if no substantive concerns are anticipated.

Changes to the regime

One of the more important developments during the last year has been the Government’s review of the sectors which require mandatory notification.

Following a consultation undertaken in July 2025, the Government published its response in March 2026 and confirmed that it intends to make a number of changes, including creating separate sectors for Semiconductors and Critical Minerals and introducing Water as a new mandatory sector. The Government also intends to clarify the scope of some existing sectors, including Communications, Data Infrastructure and Energy.

There are also proposals to exempt certain internal reorganisations, from the mandatory notification requirements. The Government is working on secondary legislation to implement these changes. Until the new legislation is in force, the current rules will continue to apply.

The practical point remains to consider NSIA requirements at an early stage. It is important to look not only at the physical assets but also at the target’s customers, contracts and technology. Where a mandatory notification is required, the clearance process and its timing should be built into the transaction from the beginning to avoid unaccounted for delays to completion.

Angela Gregson is a Partner in the Competition team and Egle Urbonaite is a Solicitor in the Corporate team at Weightmans.

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