In the News: UK is Updating Investment Act; China Relaxes Rules for QFIIs; and Stealing NFTs is a Criminal Offense in China

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UK NSI Act May Get an Update Due to Broad Scope

U.K. Deputy Prime Minister Olive Dowden is planning to review the 2022 National Security and Investment Act (NSI), according to Reuters. The official U.K. government website is asking for a "call for evidence description." U.K. and foreign stakeholders are being asked to complete a survey in which they can share their feedback about the NSI. The U.K. prime minister believes the National Security and Investment Act must be consistently updated, and now is the right time. Since the NSI was enacted, 40% of the companies that have been flagged by the NSI were Chinese and four-fifths of the prohibition decisions from the NSI involved investors of Chinese origin.

The NSI Act was put into effect on January 4th 2022. It was intended to protect the U.K. from "foreign takeover" on the U.K. market. The NSI has its own operational unit, which categorizes companies on whether or not they would put the national security of the U.K. at risk. Any stakeholder that had 25% or more control over a company in any of the 17 sectors the NSI flags must notify authorities. These 17 sectors include advanced material to transport, and semiconductors and critical minerals could be added as additional sectors, according to the government. NSI also gives the government the ability to block and examine acquisitions and investments in sensitive sectors. According to the Financial Times, the NSI had issued 866 notifications as of March 2023—almost double the annual notifications in the U.S. under CFIUS.