M&A – government response on changes to mandatory notification sectors under the National Security and Investment Act

The government has published its response following the consultation on proposed amendments to the sectors where notification of transactions under the National Security and Investment Act 2021 (NSI Act) is mandatory.

The National Security and Investment Act 2021 (Notifiable Acquisitions) (Specification of Qualifying Entities) Regulations 2021 (the NARs) contain details of the 17 sensitive sectors where filing is mandatory for certain changes of control under the NSI Act. The changes to the scope of these sectors will therefore have an impact on when a mandatory filing needs to be made.

The government has confirmed that, in line with the proposals consulted on, it will:

• create standalone sectors for critical minerals and semiconductors, and update the artificial intelligence and communications schedules to reduce low-risk notifications;
• make clarifying amendments to the scope and definitions of the critical suppliers to government, data infrastructure, energy, and suppliers to the emergency services schedules;
• create a new schedule to cover acquisitions in the water sector;
• keep the updated advanced materials and synthetic biology schedules as they are; and
• provide updated, more detailed guidance across the NARs to address topics frequently raised in feedback.

The government says it intends to lay secondary legislation later this year.

For further details on the changes consulted on, see our Competition Notes blog post here.