On 14 July 2026, the UK Government published its fifth annual report covering the key trends in the operation of the National Security and Investment Act (NSIA) regime. It covers the period between 1 April 2025 and 31 March 2026.
What you need to know
- The UK Government has seen an increase of 15% in the number of NSIA notifications it received in 2025/26 compared to 2024/25, and 46% more compared to 2023/24.
- The average time taken to accept a notification and start the clock increased by nearly one week compared to the prior year.
- The proportion of notifications called in for an in-depth review remained constant at 4-5%. The defence sector remains the sector that is subject to the highest proportion of call-ins, whilst most final orders were issued in relation to advanced materials.
- The number of final orders issued fell from 17 in 2024/25 to nine in 2025/26.
- Of the nine final orders, eight enabled the transaction to proceed with conditions, with only one blocking the transaction completely.
Background
The NSIA regime has been in force since January 2022. The regime gives the UK Government the power to review transactions on national security grounds, applying to both UK and non-UK investors. Under the mandatory regime, certain transactions that fall within scope of (currently) 17 key sectors must be notified and scrutinised by the Government. Additionally, the NSIA provides for a voluntary regime, which is underpinned by the Government's power to call in transactions that it considers may raise national security issues. For further background on the transactions caught by the regime, see our Quickguide on the UK National Security and Investment Control Regime.
The UK Government is required to publish an annual report on the operation of the NSIA regime, setting out key statistics and trends. In July 2026, the UK Government released its fifth annual report which covers the period between 1 April 2025 and 31 March 2026.
This latest annual report provides some useful insights into the areas the UK Government is particularly focused on from a national security perspective (albeit this is partly just a function of the deals that have come before it). As with previous years, the report demonstrates that both domestic and foreign investors are subject to scrutiny under the regime, with just over half of all call-in notices issued to UK-associated acquirers.
Number and type of notifications
During the reporting period, the Government received a total of 1,324 notifications, representing an increase of more than 180 notifications compared with the previous reporting period (2024/25), which itself saw an increase of more than 200 notifications compared to the reporting period prior (2023/24). Of the notifications received in the 2025/26 reporting period:
- 1,135 were mandatory notifications;
- 147 were voluntary notifications; and
- 42 were retrospective validation applications. Retrospective validations are required for completed transactions that should have received NSIA approval before completion, but did not.
The report showed that the Government accepted 1,242 notifications and rejected 37.
As has been the case in every report since the NSIA took effect, the largest proportion of notifications either accepted or rejected related to the defence sector (58%, a marginal increase from 56% in 2024/25), followed by military and dual-use (23%), which surpassed critical suppliers to Government (20%). Consistent with the prior year, the UK remained the most frequent origin of investment, with 72% of notifications associated with acquirers from the UK, followed by 28% from the USA, and 6% from each of France and Luxembourg (noting that some cases are associated with more than one origin of investment).
In total, the Government reviewed 1,220 notifications over the reporting year, clearing 95.6% within the initial 30 working day review period, consistent with the prior year. The remainder of the reviewed notifications (i.e. 4.4%) were issued with a call-in notice for a more in-depth review on the basis that the Government considered the transaction may raise national security concerns.
On average, the Government took 11 working days to accept a mandatory notification, 13 working days for a voluntary notification, and ten working days for a retrospective validation application. This compares to seven, eight and six working days respectively for the prior year. The average time taken for the Government to accept notifications has therefore increased by almost a full working week as compared to 2024/25, suggesting that some notifications may have taken even longer to be accepted.
Call-ins
As noted above, 4.4% of notifications led to call-in notices during this reporting period (i.e. 54 transactions). The Government also issued call-in notices in relation to a further six non-notified acquisitions, demonstrating that the Government continues to monitor for transactions that may present national security concerns but which have not been notified.
For transactions that were called in, the largest proportion involved acquirers associated with the UK (52%), followed by China (30%) and the USA (23%) (again noting that some cases are associated with more than one origin of investment). These figures track with the weighting of the 44 final notifications issued which predominantly involved acquirers associated with the UK (57%), China (32%) and the USA (25%). In 2025/26, the largest proportion related to the defence sector (47%), followed by critical suppliers to Government and military and dual-use (33% each).
Following a call-in notice, it took an average of 24 working days to issue a final notification (confirming that no further action would be taken) and 69 working days to issue a final order (i.e. to impose remedies or prohibit a transaction). This remains consistent with the previous review period.
Final orders
During the reporting period, nine final orders were issued, with one blocking the transaction and eight clearing the deal with conditions.
Of the final orders (and noting that some cases involved multiple sectors):
- five related to advanced materials;
- three related to data infrastructure; and
- two related to military and dual-use.
This marks a significant decrease in the number of final orders made compared with the 2024/25 reporting period, during which there were a total of 17 final orders. However, this should not necessarily be interpreted as a weakening of the Government's position as it could just be a function of the nature of the deals which came before it in the 2025/26 reporting period. For reference, during the 2023/24 reporting period, there were only five final orders.
Comment
The latest annual report demonstrates the Government's continued focus on transactions in particular sectors, including defence, military and dual-use and advanced materials. Unlike in previous reports, there is notably less emphasis on the energy sector.
The report's foreword emphasises that, as "the vast majority of inward investment poses no threat" to UK national security, the NSIA is designed to "support global investment into the UK while safeguarding the most sensitive areas of the economy".
Those areas of the economy considered most sensitive – and those which require mandatory notification under the NSIA – are due to be expanded to include two new standalone sectors: critical minerals and semiconductors, following the Government's March 2026 announcement (see our March 2026 update).
The announcement, which followed a consultation process that completed in 2025, also confirms the introduction of water as a new mandatory sector and updates to the existing sector definitions (including, among others, advanced materials, artificial intelligence, communications, critical suppliers to Government, data infrastructure and energy).
There has been no update on the Government's previously announced intention to remove the requirement for businesses to make mandatory notifications for (i) certain internal reorganisations, and (ii) the appointment of liquidators, special administrators, and official receivers.
The increased volume of notifications in the last two years may explain the longer average period for notifications to be accepted. It remains to be seen whether the proposed changes to the sector definitions will reduce the number of mandatory notifications which raise no national security concerns, allowing the Government to focus on potentially problematic investments.
Want to know more?
UK Government confirms the planned refinement of mandatory sectors under the NSIA
Key takeaways from the fourth UK NSIA annual report
Quickguide on the UK national security and investment control regime
Authors: Steven Vaz, Partner; Chris Eberhardt, Partner; Neil Cunninghame, Partner; Duncan Liddell, Partner and Tobias Sales, Trainee Solicitor.
