UK Law and Practice Contributed by: Becket McGrath and Marc Freedman, Van Bael & Bellis
Recent Reform Proposals Whilst the above remains accurate at the time of writ - ing, it should be noted that – in March 2026 – the UK Government published the outcome of its consulta - tion on revisions to the NSIA (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 (the NARs). Whilst precise details of all the proposed changes to the NARs are yet to be revealed – and the draft revised NARs are expected to be published later this year – key amendments include: • increasing the number of mandatory sectors from 17 to 19, with (i) a new standalone sector for “Semiconductors”, carving this out of the existing “Advanced Materials” category (with the existing “Computing Hardware” category also being folded into this); (ii) “Critical Minerals” also being carved out of the existing “Advanced Materials” category to become a standalone sector; and (iii) “Water” being introduced as an entirely new mandatory sector; and • narrowing the “Artificial Intelligence” category to avoid capturing entities that simply use off-the- shelf AI tools in their operations – and thus refo - cusing the relevant definition on entities engaged in AI research and development.
• transactions where the acquirer increases their level of interest exceeding certain thresholds (eg, from 25% to more than 50%). A qualifying entity is one that carries on activities in the UK or supplies goods or services to persons in the UK. There are no turnover or share of supply thresholds under the NSI regime, so any planned acquisition in one of the 17 mandatory sectors will require approval from the responsible secretary of state (currently, the Chancellor of the Duchy of Lancaster, who sits within the Cabinet Office) before it can be completed. Oth - erwise, such an acquisition will be void, and civil and criminal penalties may be enforced. Voluntary Notification For acquisitions involving entities outside of the 17 sectors, the parties may choose to voluntarily notify if the transaction may give rise to national security concerns. Where the transaction is not notified, the secretary of state has the power to “call it in” for NSI assessment. Any transaction can be caught under the “call-in” regime, as there are no identified sectors. The voluntary regime and the call-in power also apply to asset deals resulting in the acquisition of land, tan - gible movable property and intellectual property. How - ever, it is likely that such a transaction will be called in if it relates to one or more of the 17 sectors under the mandatory regime (otherwise the asset deal in ques - tion would be less likely to raise a national security concern).
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