The UK Government has published its annual report for 2025-26 on the operation of the National Security and Investment Act 2021 (NSIA), providing key data on transactions and investors caught by the regime.

The report covers the period 1 April 2025 to 31 March 2026 (the reporting period).

1. Notification volumes continue to rise

The Investment Security Unit (ISU) received 1,324 notifications over the reporting period, a 15% increase on the 1,143 received the previous year and a significant 46% increase on 2023/24. The vast majority (1,135) were mandatory notifications, with 147 voluntary notifications and 42 retrospective validation applications. Only 0.4% of notified acquisitions were subject to Final Orders during the reporting period. This repeated and significant increase in filing volumes, against very limited enforcement, reinforces the case for the Government's proposed reforms to re-balance the regime.

2. Call-ins remain selective

Of the 1,220 notified acquisitions reviewed in the reporting period, only 4.4% (54) were called in, broadly in line with 4.5% the previous year. A further six non-notified acquisitions were called in, taking the total to 60.

By sector, 47% of call-ins were associated with Defence, while Critical Suppliers to Government and Military and Dual-Use each accounted for 33% of call-ins (note that more than one sector can be associated with a single call-in). Call-in notices were issued in connection with 16 of the 17 mandatory notification sectors, with only Synthetic Biology recording none.

3. Retrospective validations decline but enforcement remains closely monitored

The number of retrospective validation applications fell to 42 in the reporting period, down from 55 the previous year. While this decline suggests growing familiarity with the mandatory notification obligation, the ISU's market monitoring identified 42 potential offences of completing a notifiable acquisition without approval. No financial penalties were imposed, but parties were required to provide assurances to the Government that steps had been taken to prevent future non-compliance.

Two of the nine Final Orders in the reporting period arose from retrospective validation applications, and a further call-in notice was issued in connection with one. This reinforces that completing a notifiable acquisition without prior approval does not mitigate substantive risk – and may itself attract scrutiny.

4. Final Orders fell sharply

Only nine Final Orders were issued in the reporting period, down from 17 in the previous year (down 47%). Of those nine, eight allowed the acquisition to proceed subject to conditions, and only one was blocked. In addition, three Final Orders from previous periods were varied, and two were revoked during the reporting period.

The sectoral distribution of Final Orders differed significantly from call-ins. Unlike last year, when Defence accounted for nine of 17 Final Orders, this year’s Final Orders were concentrated in Advanced Materials (five), Data Infrastructure (three) and Military and Dual-Use (two) – noting that more than one sector can be associated with a single Final Order. Defence, Critical Suppliers to Government, Manufacturing, Quantum Technologies and Suppliers to the Emergency Services were also associated with Final Orders. Consistent with previous years, Final Orders remain rare: only five originated from notified acquisitions, meaning just 0.4% of notified transactions had restrictions imposed.

5. The acquirer’s origin is not the determining factor; however, China remains a higher-risk profile

For the second successive year, UK-linked acquirers led in every category: accounting for 72% of accepted notifications, 52% of call-ins and five of the nine Final Orders. This demonstrates that country agnosticism remains a key feature of the NSIA.

However, acquirers with links to China continued to feature prominently, accounting for 30% of call-ins and three Final Orders. Acquirers associated with Germany and the United States each received two Final Orders, and no Final Orders were imposed on acquirers associated with any other EU member state. Accepted notifications were geographically diverse: 13% involved acquirers categorised as 'Other', with France and Luxembourg individually accounting for 6% of accepted notifications each.

6. Processing times are longer

The ISU took an average of 11 working days to accept a mandatory notification, up from 7 the previous year. For voluntary notifications, the average was 13 working days (up from 8) and for retrospective validation applications, 10 working days (up from 6). Once accepted, the median time to issue a call-in notice was 29 statutory working days for mandatory notifications and 30 for voluntary notifications, meaning the ISU is consistently using close to the full 30-day review period.

Where a transaction was called in and a Final Order was subsequently made, the total median calendar working days from receipt of the notification to the Final Order was 122, accounting for time when the ISU's statutory clock was "paused". This is higher than the equivalent figure measured in statutory working days (99), because the statutory clock is paused whenever the ISU issues an information or attendance notice, meaning the statutory working days figure excludes those paused periods, whilst the calendar working days figure captures the full elapsed time including them. For parties navigating a called-in transaction, the calendar working days figure therefore gives a more accurate picture of the real-world timeline.

The Chancellor of the Duchy of Lancaster acknowledged in the report's foreword that rising processing times are a concern and stated that the Government is taking steps to address them, without specifying further. Forthcoming legislative changes – including a potential exemption for certain intra-group transactions and updates to the scope of notifiable sectors – could reduce the volume of low-risk notifications: see our blog post here. However, unless the reforms substantively narrow the mandatory notification perimeter, any reduction in volumes is likely to be modest.

Implications for investors

The 2025-26 report presents a mixed picture for investors navigating the NSIA regime. The sharp reduction in Final Orders (from 17 to 9) and the Government’s emphasis on proportionality and investment-friendliness are positive signals of a pragmatic approach to substantive risk assessment. The data also reinforces that the NSIA is not a tool directed at foreign acquirers as UK investors feature most prominently across every category of outcome.

However, concerns remain. The regime continues to capture a very high volume of transactions: 1,324 notifications in a single year remains substantially higher than comparable regimes in other major jurisdictions. The sectors most associated with call-ins – Defence, Military and Dual-Use, and Critical Suppliers to Government – continue to carry the highest risk of intervention.

The planned reforms are a step in the right direction, but concrete proposals remain outstanding. Until they are in force, any transaction touching the 17 mandatory sectors – or involving a target with sensitive capabilities, data assets or government supply relationships – warrants careful early assessment of NSIA exposure, including whether engagement with the ISU is appropriate even for transactions that would not ordinarily raise concerns, such as internal restructurings.