‘Sensitive’ water sector set for mandatory reporting under investment security rules
- by Karma Loveday
- Jul 27
- 1 min read
The Cabinet Office is consulting on adding water to the list of ‘sensitive’ sectors under the National Security and Investment Act 2021. These sectors must notify the Investment Security Unit about acquisitions and certain other changes before deals can be completed. These include, for instance, undertaking certain types of internal reorganisations or appointing liquidators, special administrators and official receivers.
It explained: “This new requirement, while not expected to affect large numbers of deals, reflects increasing risks to the sector’s resilience in a growing threat landscape.”
Sensitive sectors were first defined in 2021 and have not been updated since. The water proposal came as part of a wider set of changes, which would also see semiconductors and critical minerals defined as sensitive sectors. However, many businesses currently subject to the mandatory notification rules are set to be relieved of the obligation in support of the Government’s Plan for Change, given “analysis has shown these types of transactions rarely warrant investigation”. The review will “help the Government focus its attention on the deals presenting greater risk to national security,” a Cabinet Office statement said.
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