Host competent authorities that consider a PEPP is being distributed in their territory, or a sub‑account opened, in breach of applicable obligations (Article 3), shall refer their findings to the competent authorities of the PEPP provider's or distributor's home Member State. The home authorities shall assess the information and, where applicable, take measures without delay and inform the host. If those measures are inadequate and distribution remains clearly detrimental to the host Member State's PEPP savers or to the orderly market, the host may, after informing the home, take appropriate measures, including, insofar as strictly necessary, preventing further distribution. Home or host authorities may request EIOPA assistance under Article 19 of Regulation (EU) No 1094/2010.

Paragraphs 1 to 3 do not affect the host Member State's power to take appropriate and non‑discriminatory measures to prevent or penalise irregularities committed within its territory where immediate action is strictly necessary to protect consumers and where equivalent measures by the home Member State are inadequate or lacking, or where irregularities contravene national provisions protecting the general good; in such situations the host may prevent the PEPP provider or distributor from carrying on new business. Any measure adopted by the host under this Article must be communicated to the PEPP provider or distributor in a well‑reasoned document and notified to the competent authorities of the home Member State without undue delay.