The National Security and Investment (NSI) Act has fully commenced today, which gives the government greater powers to intervene in technology industry mergers and acquisitions (M&A) deals.

The government said the act is the biggest shake-up of the UK’s national security regime for 20 years.

The new legislation will allow the government to scrutinise and intervene in certain acquisitions made by anyone, including businesses and investors, that could harm the UK’s national security.

The government will also now be able to impose certain conditions on an acquisition or, if necessary, unwind or block it.

However, the government said the above is expected to happen rarely and most deals will require no intervention and be able to proceed without delay. 

The act will also give investors additional certainty and clarity, with more transparent and efficient clearance processes for relevant acquisitions according to the government.

The new regime requires businesses and investors to notify the government of certain acquisitions across 17 sensitive areas of the economy, including artificial intelligence and nuclear power.

The government has published guidance to help businesses and investors to understand their obligations under the new rules, including how to assess whether the government must be notified of an acquisition, and what to expect when going through the NSI notification and assessment process.

The government has 30 working days to review acquisitions after it has accepted a notification as complete, not after the government has been notified.

The act applies to acquisitions made from 12 November 2020, which is the day after the legislation was introduced in Parliament.

The government said it will not re-examine any acquisitions that have already been examined under the Enterprise Act 2002 and current investigations under the Enterprise Act 2002 will continue under the Enterprise Act 2002.

“The UK is world-renowned as an attractive place to invest but we have always been clear that we will not hesitate to step in where necessary to protect our national security,” said business secretary Kwasi Kwarteng. “The new investment screening process in place from today is simple and quick, giving investors and firms the certainty, they need to do business, and giving everyone in the UK the peace of mind that their security remains our number one priority.”

Share Story: