Letter: Proposal for a New National Security and Investment Regime: 16 October 2018

On 24 July 2018, the U.K. Department for Business, Energy & Industrial Strategy published a White Paper setting out the proposal for a new national security and investment regime (the “Proposed Regime”) as a component of HM Government’s plan to reform its powers to protect national security and guard against hostile actors’ acquisition of control over entities or assets. The White Paper sets out circumstances in which a loan relationship and/or an associated enforcement of collateral might lead to concerns that a lender, who is hostile to the UK, might gain "significant influence or control" over one or more obligors or one or more assets of national security interest.

The FMLC submitted a response to the Consultation, highlighting the complexities in the financial markets on which additional clarification would be helpful, such as the positions of multiple lenders in syndicated loans or the impact of unwinding a transaction on third-party sellers. The FMLC also observes that, as and when HM Government responds to comments on the White Paper or publishes the Bill, the FMLC may have further remarks to offer.

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