The NSI Act, which fully came into force in January 2021, gives the Government power to scrutinise and intervene in certain acquisitions made by anyone, including businesses and investors, that could harm the UK’s national security. The Government can also impose certain conditions on an acquisition or, if necessary, unwind or block it (although the Government says that it expects this to happen only rarely, and most deals will require no intervention and be able to proceed without delay). Under the NSI Act, in certain circumstances, persons can or must notify the Secretary of State of relevant acquisitions and the Secretary of State can make regulations to prescribe the form and content of those notifications.

The Cabinet Office has now published the second edition of the NSI market guidance to provide practical support for businesses engaging with the Investment Security Unit under the NSI Act.

The first edition of the market guidance was published in July 2022. Since then, the Government says that it has engaged with stakeholders to answer queries and gather feedback about their experience. Using these insights, the second edition of the market guidance provides businesses with further predictability and transparency on:

• how the Government uses certain powers, such as the power to make interim orders or use the voluntary period;
• how businesses can interact with the Investment Security Unit most effectively, e.g. through representations, seeking voluntary periods where relevant, and providing information in notification forms; and
• timings, including when businesses should notify the Investment Security Unit that an acquisition is being contemplated.

The second edition of the market guidance incorporates the first edition published in July 2022, meaning that all the information businesses need is contained in one document.

The Government says that it will continue to engage with businesses to identify how to further improve predictability and transparency and welcomes suggestions for topics to include in future editions of the market guidance. To access the market guidance, click here.