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Last amendment: >- on 2026-03-12.
Prior to the NSI Act 2021, UK national-security review of foreign acquisitions operated through the Enterprise Act 2002 (public-interest merger intervention powers) and a narrow "special share" regime — instruments designed primarily for competition control rather than dedicated security screening. The Act was introduced to Parliament in November 2020 against the backdrop of heightened Allied concern about Chinese-state-linked acquisition of advanced-technology companies (e.g. the 2016 Arm/SoftBank deal, the 2020 Imagination Technologies ownership questions, and the broader FVEY allied alignment with the US CFIUS/FIRRMA tightening of 2018). It passed all Parliamentary stages and received Royal Assent on 29 April 2021 under c.25 of the Acts of 2021.
The regime began accepting voluntary notifications immediately after Royal Assent (29 April 2021), but mandatory-notification obligations and the full call-in architecture commenced on 4 January 2022, when the commencement regulations and the Notifiable Acquisition Regulations (NARs) SI 2021/1264 took effect. The Investment Security Unit (ISU) was established within the Cabinet Office as the operational body (previously the function sat within BEIS; ISU moved to Cabinet Office to reflect the cross-government national-security mandate).
Track 1 — Mandatory notification (NARs sectors) Acquisitions of qualifying entities in any of the 17 designated mandatory sectors that cross a control threshold (≥25%, ≥50%, ≥75% of shares or voting rights, or acquisition of "material influence" over policy) must be notified to the ISU before completion. Completion without clearance is automatically void. Criminal sanctions for non-notification: up to 5 years imprisonment and/or unlimited fine for individuals; civil financial penalties up to 5% of worldwide turnover or £10m (whichever is greater) for entities.
Track 2 — Voluntary notification / call-in (whole economy) The Secretary of State retains a call-in power over any acquisition of control or influence over any qualifying entity or qualifying asset across the entire UK economy (not limited to the 17 NARs sectors) where there is a reasonable suspicion of national-security risk. Call-in is available for up to 5 years after completion (2 years if notified voluntarily). The whole-economy call-in scope means that acquirers outside the 17 sectors still face residual scrutiny risk.
1. Advanced Materials 2. Advanced Robotics 3. Artificial Intelligence 4. Civil Nuclear 5. Communications 6. Computing Hardware 7. Critical Suppliers to Government 8. Cryptographic Authentication 9. Data Infrastructure 10. Defence 11. Energy 12. Military and Dual-Use Technologies 13. Quantum Technologies 14. Satellite and Space Technologies 15. Suppliers to the Emergency Services 16. Synthetic Biology 17. Transport
A "notifiable acquisition" occurs when a person's interest in a qualifying entity crosses 25%, 50%, or 75% of shares or voting rights (or the person acquires a right to appoint / remove a majority of directors). Acquisitions that merely increase an existing stake already above a threshold (e.g., 30% → 40%) do not separately trigger notification. The "material influence" concept (adopted from the CMA merger-control framework) captures de facto control through contractual or governance rights even below the numerical thresholds.
The NSI Act applies to qualifying entities incorporated in or carrying on activities in the UK, irrespective of the nationality or domicile of the acquirer. It also applies to the acquisition of qualifying assets (land, tangible and intangible property including IP) that are used in connection with activities in the UK. There is no de minimis turnover or market-share threshold, distinguishing the regime from the pre-NSI Act §42 Enterprise Act merger-control public-interest test.
The ISU publishes Annual Reports disclosing:
notification / call-in requests
Reports show that China, the US, and the UAE have been the most frequent nationalities of reviewed acquirers; defence and AI have generated the highest call-in rates. In the 2022/23 and 2023/24 annual reports, the ISU cleared the large majority of notified transactions unconditionally, with call-in deployed in ~60-70 cases per year.
Severity 5 is appropriate for a parent framework statute that (a) creates a mandatory pre-completion screening regime with criminal penalties, covering 17 sectors by default and the entire UK economy via call-in; (b) is the enabling authority for every subsequent NARs schedule amendment (including the March 2026 reform that adds Critical Minerals, Semiconductors standalone, and Water); (c) is structurally irreversible — a repeal or radical narrowing would require primary legislation and would be politically implausible given the FVEY-aligned security posture. The Act is the cornerstone of the UK economic-statecraft toolkit in the investment dimension, equivalent in scope and permanence to the US CFIUS/FIRRMA framework and the EU Reg 2019/452 coordination layer.
The NSI Act 2021 was enacted as part of a coordinated allied response to Chinese-state-linked acquisitions of advanced-technology companies:
expanded mandatory filing to TID US businesses and critical technology
(formal cooperation mechanism, not a centralized block power)
expanded repeatedly (2017, 2020, 2021, 2023)
broadened 2019 and 2022
The UK NSI Act completed the post-Brexit national-security investment-screening architecture for the UK, which had previously relied on the lighter-touch Enterprise Act public-interest regime.
sectors (expanding to 19 once the 2026 SI is in force) requires pre-completion clearance — timeline risk of 30-working-day initial review + up to 45 calendar days further assessment period per notification.
Graphcore-successor IP, Dialog Semiconductor, Plessey, XMOS, Frontier Silicon, and hyperscaler data-centre operators all potentially within the NARs mandatory sectors. The call-in backstop extends scrutiny to the wider UK tech ecosystem.
and Russian-sanctioned acquirers face the highest ISU scrutiny probability; allied-nation acquirers (US, Australia, Canada, Japan) are typically cleared quickly under the whole-economy call-in track.
the mandatory sectors flows through the s.6 statutory-instrument power in this Act. The 2026 NARs reform (Critical Minerals + Semiconductors + Water) is the first substantive use of that power.
(committed "later in 2026" — no specific date).
screen expansions will be carried out via further NARs SIs or via primary legislation.
US CFIUS / EU screening-coordination framework given the FVEY investment- security information-sharing context.