Learn Icelandic: Ákvæðið sem um ræðir er nýtt. - The provision in question is new.

This is an example of stylistic fronting, which is very common in written and formal Icelandic. In relative clauses starting with sem, a preposition that normally goes after the verb is often moved in front of it. The phrase sem um ræðir is a fixed, highly natural way to say "in question."

If we didn't use stylistic fronting, would the sentence still be correct?

Grammatically, you could technically say ákvæðið sem ræðir um, but native speakers almost never do for this specific phrase. Fronting the um has become the standard set phrase for expressing "the thing in question."

How does the phrase sem um ræðir work literally?

It translates roughly to "which [it] speaks about." There is no active subject doing the talking here; it is an impersonal use of the verb ræða (to discuss) combined with the preposition um.

Why does the sentence end with nýtt instead of nýr?

The adjective must agree in gender, number, and case with the noun it describes. Since ákvæðið (the provision) is a neuter, singular noun in the nominative case, the adjective takes the matching neuter form nýtt.