The National Security and Investment Act 2021 revisited: when are secured creditors obliged to make mandatory notifications?

The National Security and Investment Act 2021 (NSIA or the Act) 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. Since the NSIA came into force at the beginning of 2022, its practical implications have inevitably come to the fore. This includes how the Act’s mandatory pre-notification requirements apply to creditors taking security over shares in entities operating in qualifying sectors of the economy. While the government’s intent seems clear in terms of when the NSIA will impact secured creditors, the text of the Act itself and related guidance have resulted in some questions among practitioners.