UK Expands NSIA Mandatory Regime to Cover Water Sector & Clarifies Scope of Semiconductors, Critical Minerals and AI Schedules
Publish Date: 2026-03-17 07:38:00
Source Domain: www.akingump.com
Background
On 12 March 2026, the UK government confirmed that important changes will be made to the National Security and Investment Act (NSIA) Notifiable Acquisition Regulations (NARs) and the scope of the NSIA mandatory notification regime. The changes follow the consultation that closed in October 2025 (see related Akin Alert here) and represent the first major developments since the NSIA came into force in January 2022. The UK government continues to refine the NSIA on an iterative basis, incorporating feedback from businesses and stakeholders (for example, narrowing the scope of the Artificial Intelligence schedule) while balancing the constantly evolving risks to national security (including confirmation that the water sector will be included within the NSIA mandatory notification regime).
Key Takeaways
- Extension of Mandatory Notification Regime to the Water Sector: Acquisitions in the water sector will now fall within the mandatory regime, reflecting the scale of expected investment (including foreign investment) and the sector’s criticality.
- Standalone Critical Minerals and Semiconductor Schedules: These schedules will be separated from the Advanced Materials schedule to reflect their strategic importance and to simplify compliance. The government has not ruled out further expansion of the Critical Minerals to “growth minerals”, such as copper and uranium.
- Excluding ‘Off the Shelf’ Artificial Intelligence (AI): ‘Off the shelf’ AI and licensed third‑party AI systems, as well as routine business use or minor modifications of AI systems, will be expressly excluded from the scope of mandatory notification regime, focusing scrutiny on higher‑risk AI applications.
Extending the Mandatory Notification Regime to the Water Sector
As anticipated, and with the support of all consultation respondents who provided comments, the UK government has confirmed that the NSIA mandatory notification regime will be extended to include acquisitions within…
