(1) Where the Bank has clear and demonstrable grounds for believing that an investment firm that -

(a) acts within the State under the freedom to provide services, or

(b) has a branch within the State,

has contravened any of the obligations arising from these Regulations for which the Bank does not have enforcement powers, the Bank shall refer its findings in support of that opinion to the competent authority of the investment firm's home Member State.

(2) If, despite the measures taken by the competent authority of the home Member State or because such measures prove inadequate following a referral of the Bank's findings under paragraph (1) about an investment firm, the investment firm persists in acting in a manner that, in the opinion of the Bank, is prejudicial to -

(a) the interests of investors in the State, or

(b) the orderly functioning of markets,