402.This section imposes an additional procedure to be followed in some circumstances where the Authority proposes to use its intervention power against an EEA firm.  This procedure applies where the EEA firm has contravened a requirement imposed by the Authority pursuant to host State functions under the relevant single market directive.
403.First, the Authority must require the firm to remedy the situation.  If the firm fails to do so, the Authority must request the firm’s home State regulator to take appropriate measures to ensure the firm remedies the situation and inform the Authority of the measures it proposes to take (or why it does not propose to take any measures).  Only if the Authority considers that the measures that the home State regulator has taken are inadequate, or if no action has been taken by that regulator, may it exercise its powers.
404.However, where the Authority decides it needs to act urgently it may do so before it has required the firm to remedy the situation and either before it requests the home State regulator to act or, having already made a request, before it is satisfied that the home State regulator is not going to take adequate action.  But if the Authority takes urgent action in this way, it must inform the European Commission and must comply with any direction from the Commission to rescind or vary the requirements imposed.
Commentary on Sections Part Xiii: Incoming Firms: Intervention by Authority Section 199: Additional procedure for EEA firms in certain cases