3.6 As firms' operations have become more complex and dependent on technology over recent years, firms are becoming increasingly reliant on a wider range of services delivered by third-party providers. To support their operational resilience, firms need to manage effectively risks posed by all their third-party arrangements which are material, not just a sub-type of third-party arrangements which are classed as outsourcing. The PRA proposes to expand the scope of its data collections from material outsourcing arrangements to all material third-party arrangements, encompassing both material outsourcing and non-outsourcing arrangements. The proposals aim to aid the PRA in better identifying systemic risks posed by third-party service providers and support the PRA's recommendation of potential CTPs to be designated to HMT. The proposed amendment would result in the introduction of the proposed definitions for 'third-party arrangement' and 'material third-party arrangement' in the PRA Rulebook.

3.7 The PRA proposes to define a 'third-party arrangement' as any arrangement whereby a person provides a product or service to a firm whether or not this would otherwise be undertaken by the firm itself, provided directly or by a sub-contractor, or provided by a person within the same group as the firm.