Since the National Security and Investment Act (the NSI Act) came into force on 4 January 2022, one of the criticisms levelled at the legislation has been its broad scope and ambiguity over whether a transaction might be captured by the mandatory notification regime or voluntary notification regime. 

This may be illustrated by the relatively high number of notifications that were received during the latest reporting period. From 1 April 2022 to 31 March 2023, 866 notifications were received in total, with the vast majority (93%) cleared within 30 working days. Although this figure is in line with the Government’s expectations it is more, for example, than the 440 transactions reviewed under the comparable CFIUS regime in the United States during 2022. Having a regime with a broad application has important consequences for transactions – making a notification under the NSI Act delays a transaction for the duration of the NSI review process, and not making a notification risks the transaction being unwound and creates potential exposure to civil and criminal penalties.

It is therefore welcome news that the Cabinet Office published a Call for Evidence on 13 November 2023, which seeks to gather evidence from stakeholders to help the Government “(i) hone the scope of the system’s mandatory notification requirements, (ii) improve NSI notification and assessment processes, and (iii) develop the Government’s public guidance and communications on how the NSI Act works and where the Government tends to see risk arising”.

Which areas are proposed for review? Read the full article on our website - Lewis Silkin - The National Security and Investment Act 2021: will it lead to greater certainty and lower burdens for businesses?