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Don’t let your investment round get caught by the broad scope of the new National Security Act

The National Security and Investment Act 2021 will give governmental regulatory bodies powers to investigate investments into UK companies, which they believe may have "national security" implications.

National security might seem like a high bar and not something that will apply to your business. But tread carefully because the legislation’s scope is broad enough to catch a large number of UK equity financing transactions.

The Act grants a new governmental body the power to call in certain transactions to assess whether the transaction might create a national security risk. “National security” is not defined by the Act or the Government and is kept purposefully vague so that the Government can flex its approach. This flexibility isn’t, however, ideal for working out whether or not your investment round will be called in!

Furthermore, although the Act only comes into force from 4 January 2022, it allows the Government to go back to 12 November 2020 and call in transactions that have already completed. So it’s important to be aware of the requirements of the Act right away.

Read our guide to find out if the new rules apply to your transaction and what you’ll need to do to comply if they do.

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