Notice

MoU between Cabinet Office and the CMA on the operation of the National Security and Investment Act 2021

Published 26 March 2026

Introduction

The National Security and Investment Act 2021 (NSI Act) operates alongside a number of other statutory and regulatory regimes. It is likely, therefore, that some acquisitions being assessed under the NSI Act by the Investment Security Unit (ISU) may also be scrutinised by the Competition and Markets Authority (CMA), under its powers in Part 3 of the Enterprise Act 2002 (EA 02).

This Memorandum of Understanding (MoU) supersedes the previous MoU between the Department for Business, Energy and Industrial Strategy (BEIS) and the CMA, following the transfer of ISU from BEIS to the Cabinet Office in February 2023. The MoU reflects necessary changes relating to the transfer of the ISU from BEIS to the Cabinet Office. It sets out the framework for cooperation, coordination and information sharing in the operation of the NSI Act between the CMA and the ISU in the Cabinet Office, collectively referred to as “the parties” throughout this document.

This MoU sets out the legal framework and broad principles for collaboration on the timing of investigations, interim measures, remedies and the sharing of relevant information between the parties. The shared aims will enable closer working between the parties so as to assist them in effectively discharging their respective regulatory functions.

The MoU is a statement of intent which will guide, and be taken into account by, the relevant staff within both parties, and does not give rise to legally binding obligations on the part of either the CMA or the Cabinet Office. The arrangements set out below are subject to what is required or permitted by law.

Background

On commencement of the NSI Act in January 2022, the national security public interest consideration was removed from the EA 02. There are now two distinct systems: (1) the NSI Act focuses on national security concerns with the Chancellor of the Duchy of Lancaster being the decision maker, and (2) the EA 02 which covers competition and other public interest considerations.

The NSI Act grants the Government powers to scrutinise and intervene in certain acquisitions of control (“acquisitions”) to protect UK national security. These powers ensure that investment in the UK can continue with predictability and transparency whilst protecting the UK’s national security.

The NSI Act focuses solely on national security, meaning it cannot be used for any other purposes. Most acquisitions will not raise national security concerns and so will be unaffected by the NSI Act. This ensures the system is effective but light-touch, helping businesses and investors continue with certainty. These powers are in line with many similar systems across the world.

Role and function of the ISU

The ISU sits within the Cabinet Office and is responsible for the operation of the NSI Act on behalf of the Chancellor of the Duchy of Lancaster. The ISU is responsible for coordinating cross-Government investment screening activity and for the prevention and mitigation of national security risks arising from trigger events under the NSI Act.

The ISU makes use of existing expertise within all relevant Government organisations, including specific sector teams. The ISU draws on input from relevant teams to inform decisions by the Chancellor of the Duchy of Lancaster. 

The role and function of the CMA

The CMA is a non-ministerial department, established under the Enterprise and Regulatory Reform Act 2013. The CMA works to promote competition for the benefit of consumers, both within and outside the UK, to make markets work well for consumers, businesses and the economy. The CMA’s statutory responsibilities, in so far as relevant to the matters that are the subject of this MoU, include the review of mergers under Part 3 of the EA 02.

The CMA has a duty to refer, for an in-depth ‘phase 2’ investigation, any relevant merger situation where it believes that it is or may be the case that the merger has or may be expected to result in a substantial lessening of competition (SLC) in a UK market. Following a reference for a phase 2 investigation, the CMA conducts a more detailed analysis to determine whether: (i) there is a relevant merger situation falling within the UK merger control regime; (ii) that a relevant merger situation has resulted, or may be expected to result, in an SLC, and (iii) it should take action to remedy any SLC identified.

Although the treatment of national security public interest matters changed as a result of the NSI Act, public interest intervention grounds relating to media plurality, financial stability and public health emergencies remain under the EA 02. This means that the CMA’s merger control role may intersect with both the NSI Act and the public interest intervention regime. There is the potential for a merger to be of interest to the CMA, the ISU, and to other Government departments such as the Department for Business and Trade (DBT), HM Treasury (HMT), and the Department for Culture Media and Sport (DCMS) under other public interest grounds.

Principles of information sharing

Section 54 of the NSI Act permits information received under the Act to be shared with other public authorities for specified purposes set out in the Act. The CMA is likely to receive information shared under section 54(2)(a) for the purpose of facilitating the exercise of the Act’s functions by the Chancellor of the Duchy of Lancaster. The Cabinet Office may also share information for other purposes set out in section 54.

Information shared by the Chancellor of the Duchy of Lancaster under section 54 must not be disclosed further or used for purposes other than that for which it was shared, without prior agreement of the Chancellor of the Duchy of Lancaster. If the CMA wishes to use information for other purposes or to share further, it must first obtain such agreement.

If information shared includes personal data, that personal data will be subject to applicable data protection rules, and the provisions set out in the rest of this MoU.

Section 241 of the EA 02 empowers public authorities to disclose information for the purpose of facilitating the exercise by the authority of any function it has under the EA 02.

Both parties have market monitoring capabilities, and neither party relies on the other to identify transactions of interest to either statutory system. However, both parties may share information on transactions being considered under the NSI Act or the EA 02, or both, to enable effective coordination and alignment by the authority of any function it has under the EA 02 or NSI Act.

This MoU sets out potential circumstances in which the parties might consider disclosing information to each other, and the principles and processes which will typically be applicable. It may not always be appropriate to share information, such as for reasons of national security.

CMA

The CMA will continue to engage with the Cabinet Office in relation to mergers which are notified to the CMA, or which the CMA becomes aware of, which might be relevant to the ISU.

When the CMA is informed that an acquisition has been called in for further investigation by the ISU, it will endeavour, as soon as reasonably practicable and providing advance notice where it is able, to notify (and update, as appropriate) the ISU on the status of a particular merger investigated, or intended to be investigated, by the CMA. For example this could include:

• if the merger is called in by the Mergers Intelligence Committee or notified to the CMA;
• when the CMA intends to launch its Phase 1 investigation;
• if the CMA identifies potential competition concerns and intends to proceed to a case reference meeting (CRM);
• when the CMA issues its Phase 1 decision;
• if the CMA launches a Phase 2 investigation;
• when the CMA issues its Phase 2 interim report and any notice of possible remedies;
• when the CMA issues its final Phase 2 decision, including on any remedies;
• if the CMA issues a notice of extension in relation to an investigation;
• if the CMA intends to accept undertakings at Phase 1 in lieu of a reference or if it intends to impose or accept remedies at Phase 2 to address competition concerns, including the scope of the remedies concerned; or
• if the CMA intends to issue an interim order and/or to take any steps under that order (e.g. whether to grant a derogation, appoint a monitoring trustee or issue directions)

ISU

The ISU will continue to engage with the CMA, where appropriate, in relation to acquisitions which are notified to the ISU or which the ISU becomes aware of, which the ISU considers may be reviewed by the CMA at the same time.

In addition, where the ISU is informed that an acquisition is being reviewed by the CMA, it will endeavour, as soon as reasonably practicable and providing advance notice where it is able, to notify (and update, as appropriate) the CMA at certain points in the ISU’s review, depending on the circumstances of the case. For example:

• the status of the ISU’s review, including:
  • when the statutory periods begin and end;
  • when the Chancellor of the Duchy of Lancaster issues a call-in notice, additional period notice or voluntary period notice;
• if the Chancellor of the Duchy of Lancaster intends to issue an interim order and/or to take any steps under that order (eg, to grant a derogation, appoint a monitoring trustee or issue directions);
• the status of the ISU’s consideration of remedies:
  • if the Chancellor of the Duchy of Lancaster intends to impose remedies;
  • the scope of remedies considered and the recommendation to the Chancellor of the Duchy of Lancaster;
  • the remedies imposed in a final order;
• whether the Chancellor of the Duchy of Lancaster intends to use other powers under the NSI Act (in particular under section 56: duty to provide information and assistance, or section 31: interaction with the CMA functions).

Requests for Information and Assistance

Under section 56 of the NSI Act, the CMA has a duty to provide such information in its possession and any other assistance as the Chancellor of the Duchy of Lancaster may by direction reasonably require to enable the Chancellor of the Duchy of Lancaster to exercise their functions under the NSI Act.

Where possible, information pertaining to a merger will be handled through regular engagement between the CMA and the ISU. Should a request under section 56 be needed, the ISU will engage with the CMA to discuss the content and timing of the request, taking into account the extent of the request, the resourcing implications for the CMA and whether the CMA already has possession of the information.

The ISU will aim to give the CMA at least five working days to respond to a request under section 56. Depending on the complexity of the request, a longer time period may be reasonable. Where information is required urgently, the engagement arrangements as set out above between the ISU and the CMA will be followed.

The types of information and assistance may include, but are not limited to:

• information on current or historical CMA cases;
• information the CMA may hold on competition within a given sector;
• information on existing interim orders, derogations, final orders or undertakings; or
• information on requests to issue or amend a derogation.

Some of the information outlined above will be available in the public domain and ISU will not seek information from the CMA that can be obtained through public sources or can be obtained through its own resources.

Remedies

When cases are under investigation by the ISU and the CMA, prior to issuing an interim order, final order or final notification under the NSI Act, the ISU will engage the CMA ahead of time and consider any representations from the CMA. Such engagement will be undertaken in accordance with section 54 of the NSI Act.

Similarly, prior to issuing interim measures, derogations, accepting undertakings, or issuing final orders under EA 02 in cases where the ISU is likely to have an interest under NSI Act, the CMA will engage the ISU ahead of time and consider any representations from the ISU.

Through engagement in case meetings and directly with other Government departments, appropriate remedies will be developed to mitigate national security risks. Where appropriate, the ISU might seek advice on remedies from the CMA.

In order to avoid potential conflicts between remedies imposed under the NSI Act,  orders imposed or undertakings accepted under the EA 02, the ISU will (where appropriate and in accordance with section 54 of the NSI Act) keep in contact and engage with the CMA on the status of a review.

Where a potential conflict may arise between remedies being considered by the ISU and the CMA, if necessary this will be escalated to Deputy Director (ISU) or Director (CMA) level within each of the ISU and the CMA for resolution, with further escalation to Director (ISU) or Senior Director (CMA) (which would include the inquiry group if the CMA is undertaking a phase 2 investigation). The ISU will also consider requesting a voluntary period under section 23(9) of the NSI Act with the merger parties to ensure that remedies are effective and that the ISU and the CMA avoid any conflicting remedies. However, a voluntary period and its duration under the NSI Act must be mutually agreed, in writing, by the Government and the acquirer, therefore it will not always be possible, nor appropriate for national security reasons, to make use of a voluntary period.

Any decisions made under the NSI Act must be taken on the basis of national security. Where multiple remedies are available to mitigate national security risks, the Chancellor of the Duchy of Lancaster may consider views from the CMA as to their relative impact on any competition concerns identified by the CMA.

Interaction with CMA Functions Under Part 3 of the EA 02 (NSIA 21, Section 31)

Section 31 of the NSI Act provides for situations where a trigger event considered under the Act for national security reasons is also subject to consideration by the CMA under the merger control regime in Part 3 of the EA 02.

Section 31 of the NSI Act gives the Chancellor of the Duchy of Lancaster the power, if a final order is in force or a final notification has been given under the NSI Act, to direct the CMA to do, or not to do, anything under the merger control regime in relation to the trigger event if the Chancellor of the Duchy of Lancaster reasonably considers that the direction is necessary and proportionate for the purpose of preventing, remedying or mitigating a risk to national security.

Consultation with the CMA is required prior to the Chancellor of the Duchy of Lancaster giving a direction under section 31 of the NSI Act. This will be facilitated through agreed points of contact at the CMA and the ISU. The ISU will seek to give the CMA as much notice as possible, and will ensure that representations made by the CMA with regard to the relative impact on any identified competition concerns are considered, in advance of any direction by the Chancellor of the Duchy of Lancaster.

Review of the Memorandum of Understanding

The parties will maintain regular communication on the functioning of this MoU through the points of contact. Minor changes to the MoU may be agreed in writing between the parties. If, through regular communication, it becomes clear the MoU requires substantive changes, the MoU will be revised.

Points of Contact

The CMA can contact the ISU through established named contacts and the shared mailbox: investment.screening@cabinetoffice.gov.uk

The ISU can contact the CMA via mergers.intelligence@cma.gov.uk

Confidentiality and Data Protection

The parties will keep confidential any non-public information, including the fact of requests and information contained therein.

The parties will comply with data protection legislation in relation to processing personal data when acting as data controllers or data processors.

Signatories

Signed on behalf of the Cabinet Office:

Jacqui Ward, Director, Investment Security Unit, Cabinet Office

Date: 28.01.2026

Signed on behalf of the Competition and Markets Authority:

Joel Bamford, Executive Director, Mergers, Competition and Markets Authority

Date: 18.03.2026