How UK CEOs Should Navigate NSIA Investment Screening in 2026

The National Security and Investment Act (NSIA) can delay or reverse a UK deal, so CEOs must screen acquisitions for notification risk before signing.

Since the NSIA came into force in January 2022, the Cabinet Office’s Investment Security Unit (ISU) has had the power to call in transactions across 17 sensitive sectors, from defence and energy to artificial intelligence and data infrastructure, and to unwind deals retrospectively for up to five years if a mandatory notification was missed. For a CEO, that turns dealmaking from a pure commercial judgement into a regulatory sequencing problem: get the timing and disclosure wrong and a deal that cleared the board can still be reversed by the state.

According to the Cabinet Office’s National Security and Investment Act annual report for the 2025-26 reporting period, the ISU received 1,324 notifications and cleared 95.6% of the 1,220 notifications it reviewed, with only nine transactions blocked or made subject to remedies between April 2025 and March 2026. Most deals pass through untouched. The risk sits in the minority that do not, and in the cost of discovering too late that a transaction qualified.

Which sectors face the deepest scrutiny in 2026?

Defence-related transactions accounted for 47% of all called-in cases in the latest reporting period, according to the same Cabinet Office annual report, making it by far the largest single category of deeper scrutiny. Advanced materials, critical suppliers to government, and communications infrastructure also feature disproportionately among called-in deals relative to their share of overall notifications.

On 12 March 2026, the government published its response to the consultation on NSIA reform, confirming it will introduce new sector schedules for critical minerals, semiconductors and water, alongside amendments narrowing and clarifying the scope of the artificial intelligence sector definition. For CEOs running live or planned transactions in these areas, the practical effect is a moving target: a deal structured against today’s sector definitions may fall inside or outside the regime differently once the amended schedules take effect later in 2026.

Executive Action

• Map every pending and planned transaction against the 17 current NSIA sectors before terms are finalised, not after signing.
• Flag defence, critical minerals, semiconductors and AI-adjacent targets for early legal review given their disproportionate call-in rates.
• Build a standing watch on the amended sector schedules so deal teams are not caught by definitions that shift mid-transaction.

How should CEOs build NSIA review into deal timelines?

The mandatory notification regime does not pause for corporate deadlines. Once a notification is accepted, the ISU has an initial 30 working-day review period, extendable by a further 45 working days, and then further extensions by agreement, before a decision is required. A CEO who treats NSIA clearance as a formality bolted on after signing risks a transaction that cannot complete on the timetable promised to the board, shareholders or a counterparty.

The discipline that works is sequencing NSIA assessment alongside, not after, competition and financial due diligence. That means involving the general counsel’s office in target screening from the earliest stage of deal origination, building realistic review windows into transaction timetables presented to the board, and treating voluntary notification as the default posture for any deal with a plausible sector connection, since the alternative is a transaction that can be unwound up to five years later.

Executive Action

• Build a minimum 30 to 75 working-day NSIA review window into every deal timetable from term sheet stage onward.
• Require deal teams to document a notification decision, not just a due diligence sign-off, for every qualifying transaction.
• Brief the board on notification status and residual call-in risk before, not after, signing authority is sought.

How should CEOs brief the board on national security investment risk?

Under the UK Corporate Governance Code, boards are expected to understand and challenge the principal risks facing the business, and a transaction that can be reversed by government order after completion is a principal risk, not a legal footnote. Boards approving capital allocation into acquisitions or inbound investment need a clear, one-page view of notification status, call-in probability and worst-case timeline impact before they sign off.

CEOs who get this right treat the NSIA assessment as a standing agenda item for any material transaction, alongside the financial case, rather than a compliance detail delegated entirely to legal. Our capital approval assessment template can be adapted to include a national security screening checkpoint alongside the standard financial and strategic tests. This builds on the transaction-governance themes covered in our earlier briefing on AI-driven M&A, where deal speed and governance discipline were already in tension before NSIA timelines were added to the mix.

Executive Action

• Add NSIA notification status as a standing line item in every board paper proposing an acquisition or inbound investment.
• Use a one-page risk summary covering call-in probability, review timeline and worst-case completion delay.
• Assign clear accountability for the notification decision to a named executive, not a committee.

What should CEOs do differently given the direction of travel?

The government’s own framing, in both the March 2026 consultation response and the wider Industrial Strategy, links NSIA increasingly to economic security rather than narrow defence concerns: supply chain resilience, technological leadership and sovereign capability now sit inside the same regime as traditional national security review. That broadening means sectors that felt safely outside the regime two years ago, such as advanced manufacturing supply chains and certain data infrastructure providers, are more likely to be caught going forward, not less.

The practical response is not to slow dealmaking but to build notification screening into the earliest stage of target identification, so it becomes a speed advantage rather than a bottleneck. CEOs who can tell their boards with confidence, at the point of approach, whether a target sits inside or outside the regime move faster than competitors who discover the answer during exclusivity.

Executive Action

• Screen acquisition targets for NSIA exposure during origination, before exclusivity, not during confirmatory due diligence.
• Track the government’s evolving sector schedules quarterly rather than relying on guidance issued at the last NSIA-related deal.
• Use early, confident answers on regulatory exposure as a differentiator in competitive auction processes.

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