The National Security and Investment Act’s 2025-2026 Report: Why early analysis is key

The National Security and Investment Act 2021 (the NSIA) gives the UK Government powers to review, and where necessary intervene in, acquisitions that may give rise to national security risks. The regime includes mandatory notification requirements for certain acquisitions of control in specified sensitive areas of the economy, while voluntary notifications remain available where a transaction may raise national security issues falling outside the mandatory regime. The Government may also issue a call-in notice in relation to transactions that have not been notified.

On 14 July 2026, the Cabinet Office published the fifth Annual Report on the operation of the NSIA. The Annual Report covers the period from 1 April 2025 to 31 March 2026.

The key takeaways

The latest figures underline the continuing integration of NSIA analysis into mainstream M&A and investment processes. The Government received 1,324 notifications during the reporting period, an increase of 16% on the previous year.

Of the 1,220 notifications reviewed, 95.6% were cleared without further action and 4.4% were called in for detailed national security assessment. The Government issued 60 call-in notices in total during the period, including notices relating to transactions that had not been notified.

There was also a modest increase in the time taken for the Investment Security Unit (ISU) to accept notifications. This is an important distinction: the acceptance stage is separate from the substantive statutory review period. Despite increased notification volumes, the Government states that all notified acquisitions were either cleared or called in within the statutory 30 working days.

The report records nine final orders during the year. Eight permitted completion subject to conditions, while one blocked the transaction from proceeding.

Non-notified transactions remain a material risk

A central message from the report is that completion without an NSIA notification does not remove regulatory risk.

Of the 60 call-in notices issued during the reporting period, six related to non-notified acquisitions. More notably, three of the nine final orders concerned non-notified transactions. While these figures are relatively small in absolute terms, they demonstrate that the Government remains willing to use its call-in powers where it considers this necessary.

For acquirers and target groups, this reinforces the importance of conducting a properly documented NSIA assessment before signing and, where appropriate, before completion. A failure to identify a mandatory notification requirement or a credible voluntary notification case can introduce uncertainty after completion, complicate integration planning and expose the parties to a potentially extended Government review.

Sectors under particular scrutiny

The Government issued call-in notices across 16 of the 17 sensitive areas covered by the mandatory notification regime. Defence was the most prominent sector, accounting for 47% of called-in acquisitions. The report also identifies significant call-in activity involving critical suppliers to Government and military and dual-use activities.

These figures are a reminder that the NSIA is not confined to traditional defence deals. The assessment may be relevant to transactions involving technology, sensitive supply chains, Government facing activities, advanced manufacturing and businesses operating in areas with potential dual-use applications.

What this means for businesses and investors

The Annual Report confirms that the NSIA is now an established part of the UK M&A landscape. Although the overwhelming majority of notifications continue to be cleared without intervention, the growth in notification volumes and longer acceptance times mean that parties should allow for NSIA analysis and project management at the outset of a transaction.

In practice, that means considering the NSIA as part of initial due diligence, alongside other regulatory workstreams. Early analysis can help parties to:

• Identify whether a transaction may fall within the mandatory notification regime
• Assess whether a voluntary notification should be considered
• Allocate notification responsibility and regulatory risk in transaction documentation
• Build appropriate timelines and milestones into the deal timetable
• Avoid disruption arising from an unexpected post-completion call-in.

How our Corporate team can help

Our Corporate team routinely incorporates NSIA analysis into M&A, private equity, joint venture, restructuring and wider corporate transaction advice.

We work with clients early in the transaction process to assess whether the target’s activities, the proposed acquisition structure and the identity of the acquirer raise NSIA issues. Where a filing may be required or advisable, we assist with notification strategy, preparation of submissions, engagement with the ISU and the incorporation of appropriate protections into the transaction documents.

This integrated approach helps clients to identify NSIA issues before they become transaction-critical, manage regulatory timetables effectively and minimise the risk of unnecessary delay or post-completion uncertainty.

Conclusion

The Annual Report reinforces a clear practical message: NSIA assessment should be addressed early, not treated as a late-stage regulatory formality.

The increase in notification volumes, the extended acceptance times and the use of call-in powers in relation to non-notified transactions all support a disciplined early-stage approach. For businesses and investors, a timely NSIA assessment can be integral to delivering a transaction with greater certainty, a more realistic timetable and reduced post-completion risk.

This article first appeared in Insider Media. If you have any questions about the topics it raises, please get in touch.