The Chancellor of the Duchy of Lancaster announced reforms to The National Security and Investment Act 2021 (NSIA) on 22 July 2025, together with a consultation which is due to close on 14 October 2025.
The reforms seek to simplify the rules under NSIA to reduce the regime’s burden on businesses whilst balancing national security considerations with economic growth. Under the proposals certain internal reorganisations will be excluded from the mandatory notification obligations, together with the appointment of liquidators, special administrators, and official receivers.
The consultation focuses on updates to the Notifiable Acquisition Regulations (NARs), which set out the 17 economic areas in which business acquisitions trigger mandatory notification under NSIA. These economic areas have not been updated since they were first defined in 2021. The government is proposing to create new separate categories for semiconductors and critical minerals, both of which are currently covered by the advanced materials category. Further proposals include the creation of a new in-scope area covering acquisitions of businesses operating in the water sector, as well as exclusions to ensure that businesses using off-the-shelf artificial intelligence are not captured under the NARs artificial intelligence scope.
Whilst it is hoped that these changes will result in less administrative burdens for businesses, particularly in the context of internal reorganisations, the government expects the proposed changes to have a relatively minor effect on overall notification volumes. The annual report for 2024-25 indicates that the government reviewed 1,143 NSIA notifiable acquisitions for the financial year.
It is hoped that the proposed reforms will achieve the objective of reducing administrative burdens on businesses and streamline transactions due to improved clarity. Contact our regulatory team if you are considering whether a mandatory notification will be required under NSIA.
Daniel Fournier