29 Apr 2022

Butterworths Journal: The National Security and Investment Act 2021 revisited

Published 11 times a year, the Butterworths Journal of International Banking and Financial Law is an invaluable resource that aids all practitioners who want to keep abreast with the latest legal developments in the global financial market. It is written by leading experts in their field and offers a mix of technical and practical features.

Kathrine Meloni, Special Advisor in our Financing practice, contributed an article on the National Security and Investment Act 2021 (NSIA). The NSIA is a complex and wide-ranging piece of legislation with the potential to impact many acquisitions and other corporate transactions. It empowers the Secretary of State for Business, Energy and Industrial Strategy (the Secretary of State) to review and where appropriate, intervene in investments in qualifying entities and assets that have given, or may give rise to a risk to national security.

Kathrine considers a specific aspect of the NSIA: the application of the mandatory notification obligation to creditors taking security over shares in an in-scope entity. She analyses the scope and implication of the NSIA, concluding that the application adds an additional layer of legal risk assessment to secured financings, even if limited as the government intends.