The UK Government has published its response to the consultation on proposed changes to the National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 (the NARs), which define the sectors subject to mandatory notification under the National Security and Investment Act 2021 (the NSIA). The NSIA gives the Government powers to scrutinise and intervene in acquisitions that may pose a risk to national security in the UK.

If you’re looking to buy, sell or restructure a business with a UK nexus, these changes are directly relevant to you. The consultation, launched in July 2025 and closed in October 2025, sought views on whether the existing sector definitions appropriately captured national security risks while avoiding unnecessary filings. The Government’s response confirms a package of targeted refinements intended to improve clarity and proportionality, while maintaining robust protection of national security interests.

The Government intends to proceed with amendments broadly in line with its original proposals, including:

• Creation of new standalone sectors for Critical Minerals and Semiconductors, removing these activities from the wider Advanced Materials schedule to reflect their strategic importance. Computing Hardware will also merge with the Semiconductors schedule.
• Introduction of a new mandatory sector covering Water, bringing water and/or sewerage undertakings within the scope of mandatory notification for the first time. If you’re active in infrastructure or utilities transactions, this is a significant expansion you’ll need to factor into deal planning.
• Refinements to existing sector definitions, including Artificial Intelligence, Communications, Critical Suppliers to Government, Data Infrastructure, Energy and Suppliers to the Emergency Services. These changes aim to reduce low‑risk filings, but you’ll still need to assess carefully whether your transaction falls within scope.
• Retention of the updated Advanced Materials and Synthetic Biology schedules, ensuring that emerging and dual‑use technologies continue to be captured. If you’re investing in innovative or high‑growth technologies, NSIA risk remains a key consideration.

Alongside the legislative changes, which are expected later this year, the Government has committed to publishing updated and more detailed guidance to address areas that have caused uncertainty in practice, particularly in relation to complex or technical definitions.

While the proposed changes are intended to improve clarity and reduce unnecessary mandatory filings, the Government has emphasised that the NSIA will continue to apply broadly where national security risks may arise. That means:

• You should continue to assess NSIA risk at the earliest stage of any transaction with a UK nexus.
• You can’t rely on the proposed changes yet. Until the amended regulations come into force, the current NARs remain applicable, and mandatory notification obligations continue to be assessed by reference to the existing sector definitions.
• As the commencement date approaches, you should take particular care when assessing whether any of the newly defined or revised sectors may be relevant.

If you have any questions about the proposed changes or how they may affect you, please contact a member of our Competition & Foreign Investment team.