The National Security and Investment Act 2021 came into effect on 4 January 2022.  It requires certain transactions involving a "change of control" in respect of shares, voting rights or policy decisions in 17 specified sectors to be cleared by the Government for national security purposes before they go ahead, otherwise the "change of control" is void and the person who gains control commits a criminal offence. The 17 specified sectors 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

The Act also gives the Government the power to call-in for a national security review, certain transactions involving a "change of control" (including in relation to certain assets) in the wider economy although guidance has narrowed the sectors that are most susceptible to being called in to those in or closely linked to the 17 specified sectors.  The Government has the power to impose remedies in respect of any transaction that is notified or called in.  It is possible to voluntarily notify a transaction.  Both mandatory and voluntary notifications can take up to 30 working days to obtain a response from the ISU and, if not cleared at that point, can be called in for further assessment which can take up to a further 75 working days for a decision to be made.  That decision may not be a clearance.  It could be a conditional clearance or in extreme cases, a refusal to allow the change of control to go ahead.  Compliance with the regime will impact deal timetables in the 17 specified sectors and those related to them and applications for clearance need to be considered early on in such transactions.