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Authors: Mark Daniel, Sofia Platzer, James Quirke, Stephanie Coleman
The UK Government has published its response to the consultation on its proposed reforms to the National Security and Investment Act Notifiable Acquisition Regulations (NARs), which set out the sectors within scope of the mandatory notification requirements.
The stated objective of the consultation was to refine the regime, reduce the burdens on businesses, and refocus scrutiny on genuine national security concerns, as discussed in our earlier blog post. However, the Government’s response adheres closely to the tramlines set out in the consultation. This could be perceived as a missed opportunity for more comprehensive reform that would have significantly enhanced legal certainty and meaningfully reduced the administrative load for both businesses and the Investment Security Unit (ISU).
While the Government has proposed a raft of amendments to the mandatory sectors, many of these changes reflect definitional tweaks or slight amendments to scope. Some of the key changes are:
Changes have also been made to the Communications, Critical Suppliers to Government, Energy, Suppliers to the Emergency Services and Synthetic Biology schedules.
The consultation response also commits to providing updated, more detailed guidance across the NARs. The Government has, in particular, flagged changes to the guidance for: Advanced Materials, including more examples, plain-English explanatory annexes, and closer cross-referencing to industry standards; Data Infrastructure, including a commitment to review the guidance in light of emerging technologies; Defence, where the Government acknowledges that guidance could be strengthened, including in respect of subcontractors; and Energy, covering key definitions, outlining capacity thresholds, and listing licences that trigger/are exempted from mandatory notification.
While some of the proposed changes will be welcomed, as they enhance legal certainty by reducing the scope of some sectors that were overly broad (e.g., AI) and provide welcome clarity, the reforms arguably stop short of the more radical changes that would be needed to truly cut ‘red tape’ and streamline processes for businesses.
The consultation response comes against the backdrop of an observed increase in the number of days taken by the ISU to accept mandatory notifications in recent months (frequently significantly longer than the 7 working day average reported in the last NSIA Annual Report). This points to a sustained and growing volume of notifications, a significant proportion of which are likely to be precautionary in nature.
In particular:
The Government’s consultation response takes some welcome steps to reduce the burdens on businesses, and to focus regulatory scrutiny on areas where genuine national security risks are likely to arise. However, the failure to more meaningfully narrow sector definitions – and delay in carving out internal restructurings from scope – will have direct operational consequences, contributing to a notification pipeline that places pressure on ISU resources, extends deal timelines, and erodes predictability and proportionality for businesses and investors.
The Government intends to bring secondary legislation before Parliament later this year, alongside an updated impact assessment.
19 March 2026