National Security: the focus turns to UK public markets

After the introduction of the National Security and Investment Act 2021 to address foreign investment in the UK, it is now the turn of equity listings and admissions to the UK public markets to be scrutinised through the lens of national security. 

A consultation, published on 7 June, by HM Treasury, proposes a new standalone power for the Government to block a listing in the UK which it considers could be detrimental to national security. For example, the Government sees the potential for a listing on UK markets to be used to raise capital for purposes that would enhance the capabilities of hostile actors.

Further detail will be needed to flesh out some of the proposals so further consultations are likely before any new power becomes effective.

Key proposals

  • Specific disclosure requirements regarding, the issuer, business overview, management, major shareholders and the relevant offer
  • Early disclosure/pre-clearance option
  • No challenge to existing listings
  • No impact on secondary trading


This consultation stems from the 2019 Economic Crime Plan and addresses the “remote but possible” scenarios where a company listing in the UK could be detrimental to national security. 

The consultation highlights the measures that are already in place to prevent some listings going ahead (for example the power of the FCA under the Financial Services and Markets Act 2000 to block listings that would be detrimental to investors), and to tackle economic crime. However, HM Treasury’s view is that these current measures are insufficient and it would not be appropriate to delegate responsibility for national security to the FCA. As a result, the consultation proposes a standalone power to block listings where there is a threat to national security.

Disclosure requirements

The consultation envisages a vetting process alongside, or ahead of, the listing (or admission) application process. This would involve disclosures that the Government hopes will require minimal additional action from prospective issuers, given  the likelihood of issuers having to make the disclosures as part of the listing process, especially if a prospectus is required.

 However, it is recognised that some issuers may use exemptions from the prospectus requirement to legitimately reduce regulatory requirements and views on the additional disclosure burden are explicitly welcomed, particularly from smaller companies (and those who work with them) who could feel more of an impact.

Views on the timing of the disclosure are also sought and the consultation appreciates that some issuers may value the opportunity to submit the information for a pre-clearance at the stage when they have appointed a sponsor or nominated adviser.

The disclosure requirements are as follows:

Information about the issuer

  • legal and commercial name
  • place of registration 
  • country of incorporation

Business overview

  • the nature of the issuer’s operations and its principal activities
  • the principal markets in which the issuer competes 
  • a description of the group and the issuer’s position within the group (if applicable) 
  • the issuer’s subsidiaries, including name, country of incorporation, the proportion of ownership interest held and, if different, the proportion of voting power held (if applicable)


  • names and functions within the issuer of the following persons and an indication of the principal activities performed by them outside the issuer where these are significant with respect to the issuer:
    • members of administrative, management or supervisory bodies
    • partners with unlimited liability in the case of a limited partnership
    • founders, if the issuer has been established for fewer than 5 years 
    • any senior manager relevant to establishing that the issuer has the appropriate expertise and experience 
  • names of companies and partnerships where those persons have been a member of the administrative, management or supervisory bodies or partner at any time in the previous 5 years 
  • details of convictions in relation to fraudulent offences for at least the previous 5 years
  • details of any official public incrimination and/or sanctions involving such persons by statutory or regulatory authorities

Major shareholders

To the extent known to the issuer:

  • the name of any person, other than a member of management, who directly or indirectly has an interest in the issuer’s capital or voting rights which is notifiable under the issuer’s national law 
  • details of any official public incrimination and/or sanctions involving such persons
  • whether the issuer is directly or indirectly owned or controlled and by whom, the nature of such control and the measures put in place to ensure that such control is not abused.

The offer

  • reasons for the offer and the estimated net amount of the proceeds broken into each principal intended use and presented in order of priority of such uses.


The consultation proposes that the power would apply to:

  • shares, securities representing equity such as global depositary receipts, and convertible securities;
  • regulated markets and multilateral trading facilities (including for example the SME Growth Markets or the Aquis Exchange) that allow primary equity listings; and
  • initial public offerings and non-traditional listings structures, such as introductions and special purpose acquisition companies.

The Government is not proposing to include listed debt securities within the scope of the power (beyond the convertible securities already included). However, views are explicitly sought on whether this is the correct approach and including debt securities may be considered as the policy develops.

The proposed power would not extend to delisting companies which have already listed so, unlike the National Security and investment Act 2021, the power would not operate retrospectively.

Next steps

The consultation closes on 27 August but does not indicate any timeline for the Government’s response. However, the Government expects further technical consultations to be published as the power is developed.

Click here for the consultation.