1.1 This consultation paper (CP) sets out the Prudential Regulation Authority's (PRA) proposals to set requirements in rules and expectations for firms to report operational incidents and their material third-party arrangements.

1.2 The PRA proposes to establish a framework for timely, accurate and consistent reporting of certain operational incidents, and notification and reporting of material third-party arrangements. The proposals set out clear and robust requirements and expectations for regulatory reporting which aim to support the operational resilience of the UK financial sector and enhance the PRA's understanding of sector threats and vulnerabilities.

1.3 The proposals in this CP would allow the PRA to collect data which would be used to monitor and respond to potential risks arising from operational incidents and firms' increasing reliance on third parties in an effective but proportionate manner and advance the PRA's objectives of firm safety and soundness, and policyholder protection.

1.4 The proposals set out in this CP are consistent with the approach developed jointly with the Financial Conduct Authority (FCA) and the Bank of England (the Bank), in its capacity as a supervisor of Financial Market Infrastructures (FMIs). The proposals in this CP would result in:

- requirements for firms in the PRA Rulebook as detailed in the relevant CP Chapters;

- a new supervisory statement (SS) setting out the PRA's expectations of how firms should comply with and interpret the proposed new requirements in the rules; and