On 19 December 2019, the Queen's Speech to Parliament referred to legislation that the Government proposed to bring forward in the first session of the new Parliament. Included in this legislation will be a National Security and Investment Bill (Bill) to strengthen the powers of the Government to intervene in takeovers and mergers that may affect national security interests and to ensure that hostile parties are not able to circumvent these protections by purchasing an asset rather than the entity owning or controlling the asset which is of national security interest (e.g. purchasing intellectual property instead of purchasing shares in the company that holds the IP).
The Government proposes a notification system where sensitive transactions with security implications need to be flagged, allowing the Government to block these transactions or make them subject to certain conditions. The Bill will include a mechanism for appeal where necessary. The Bill represents the second stage of the reforms that the previous Government first proposed in October 2017 and further consulted on in 2018. We discussed the 2018 consultation in our October 2018 Governance & Securities Law Focus.
Details of the Government's legislative programme as outlined in the Queen's Speech can be found here.
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