The European Securities and Markets Authority, proposed tougher guidelines on April 4 for using credit ratings compiled outside the EU, which may pose a challenge for the agencies based in London after the U.K. leaves the bloc.

ESMA published a consultation paper in which it proposes that any third-country credit rating could only be used in the bloc if an EU credit rating agency endorsed it after ensuring that the compiler's practices were compatible with EU's strict regulations.

Under the proposed terms, ESMA would have the authority to ask for information on the conduct of the third-country agency from the EU agency which endorsed the ratings and reports.

The paper is open for comment until July 3.

The proposal poses possible difficulties for the larger rating agencies based in the U.K., Moody's, S&P Global Ratings and Fitch, in offering their services in the EU after Brexit. Moody's said it would review the proposals in detail, while S&P and Fitch did not comment on the development, Reuters noted April 4.

ESMA chair, Steven Maijoor, said that the proposed amendment to the guidelines would provide the regulator with a chance to re-evaluate its extensive use and reliance on ratings produced in third countries.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.