Implications of the National Security & Investment Act 2021 for office holders

The National Security & Investment Act 2021 ("the Act") came into effect on 4 January 2022. The Government describes the legislation as providing powers to scrutinise business transactions, such as takeovers, to protect national security, while providing businesses and investors with the certainty and transparency they need to do business in the UK. The government can also intervene in transactions notified to them, including to impose certain conditions on an acquisition and in rare cases may unwind or block an acquisition completely.

The Act also requires businesses and investors to tell the government about acquisitions of certain entities performing certain activities in 17 sensitive areas of the economy (which called ‘notifiable acquisitions’).

The 17 areas of the economy are:

  • Advanced Materials
  • Advanced Robotics
  • Artificial Intelligence
  • Civil Nuclear
  • Communications
  • Computing Hardware
  • Critical Suppliers to Government
  • Cryptographic Authentication
  • Data Infrastructure
  • Defence
  • Energy
  • Military and Dual-Use
  • Quantum Technologies
  • Satellite and Space Technologies
  • Suppliers to the Emergency Services
  • Synthetic Biology
  • Transport

Notifiable acquisitions in these areas will need government approval before completion. The government can approve a transaction, impose conditions, or block it entirely.

Completing a notifiable acquisition without approval will mean the acquisition is void and may mean that the acquirer is subject to civil or criminal penalties.

Relevance to office holders

In guidance published on 22 July 2022, the government confirmed that certain temporary acquisitions of control, including the appointment of liquidators, trustees in bankruptcy, and receivers, could amount to a qualifying acquisition, triggering the mandatory notification obligations. There is an insolvency carve out for administrators only.

The guidance outlines two example scenarios in which notification obligations could arise in connection with insolvency appointments:

Scenario 1

Where a liquidator or receiver is appointed in respect of shares in a solvent entity, and, prior to these shares being sold, the liquidator or receiver has voting rights over these shares. This is an acquisition of control and, if relevant tests are met – including if the solvent entity carries on activities specified in the notifiable acquisition regulations – could require mandatory notification.

Scenario 2

An individual, such as a director, is declared bankrupt and holds shares in a solvent entity. These shares vest in the trustee in bankruptcy during the insolvency process. This is an acquisition of control and, relevant tests are met – including if the solvent entity carries on activities specified in the notifiable acquisition regulations – could require mandatory notification.


Accordingly, liquidators, receivers and trustees in bankruptcy will need to carefully consider their position, ideally pre-appointment as part of the planning process, where assets to which they are appointed include shares in companies undertaking specified activities in those 17 areas of the economy. Office holders may wish to take specialist advice to ensure they are complying.



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