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National Security and Investments Act

The National Security and Investment Act (NS&I Act) came into force on 4 January 2022. The Act gives the government the power to review and intervene in certain transactions that involve the acquisition of an entity or asset in (or closely linked to) 17 specified sectors of the economy, that could damage the UK’s national security. The government will be able to enforce certain conditions on an acquisition. If necessary, it will also have the power to undo or stop it.

Legal Services and Research Contracts teams will check whether contractual agreements the University enters into could come under the NS&I Act as part of the authorisation process. PIs will be notified if there are any concerns.


Specified sectors

The NSI act also outlines 17 areas most likely to raise National Security Concerns:

  • Advanced materials
  • Advanced robotics
  • Artificial intelligence
  • Civil nuclear
  • Communications
  • Computing hardware
  • Critical suppliers to government
  • Critical suppliers to the emergency services
  • Cryptographic authentication
  • Data infrastructure
  • Defence
  • Energy
  • Synthetic biology
  • Military and dual use
  • Quantum technologies
  • Satellite and space technologies
  • Transport


Qualifying acquisition

The law only applies to qualifying acquisitions (entities or assets) referred to as trigger events in the NS&I Act. The acquisition is a qualifying acquisition if all the following apply:

  • The acquisition is of a right or interest in, or in relation to, a qualifying asset or qualifying entity
  • The entity or asset being acquired is from, in, or has a connection to the UK.
  • The level of control acquired over the qualifying entity or qualifying asset meets any of the following thresholds:
    • Shareholding stake or voting rights in a qualifying entity meets or crosses certain percentage thresholds (for example, it becomes higher than 25%).
    • Acquire voting rights in a qualifying entity that allows passing or blocking resolutions governing the affairs of the entity.
    • Ability to materially influence the policy of a qualifying entity, for example by acquiring the right to appoint members of the board of the entity that enables you to influence the strategic direction of the entity.
    • Ability to use a qualifying asset, or ability to direct or control its use, or to do so more than prior to the acquisition.

A qualifying entity is any entity other than an individual, including a company, a limited liability partnership, any other body corporate, a partnership or an unincorporated association or trust. This could include:

  • A university spin-out
  • University subsidiary
  • Research organisation or research institute

Qualifying assets include land, tangible moveable property and ideas, information or techniques which have industrial, commercial, or other economic value i.e., ‘intellectual property’ such as:

  • Designs/plans, drawings, or specifications
  • Software, databases, trade secrets
  • Source code, Algorithms, formulae
  • Tangible moveable property, such as Laboratory equipment


Guidance and further information

For an introduction to the NSI Act, please consult this guidance. There is further guidance for the higher education and research-intensive sectors with hypothetical examples showing qualifying acquisitions.