On Tuesday, Beijing’s State Council released a sweeping directive aimed at tightening data regulations, particularly those related to “cross-border data flow… and the information security of overseas-listed companies.”

The new regulation followed the Cybersecurity Administration of China’s (CAC) disclosure on Friday that it’s investigating Didi Chuxing, the Chinese ride-hailing giant that had listed on the New York Stock Exchange two days prior, over data and national security concerns. On Monday, the CAC said it was probing two more U.S.-listed companies, Full Truck Alliance, known as the ‘Uber for trucks,’ and Boss Zhipin, a job recruitment platform, for similar issues.

Together, the new rules and the CAC’s investigations herald a new regulatory era in China in which the government wields data security as a tool to rein in tech giants seeking to raise capital on overseas exchanges. Beijing is sending a clear message that companies will need to “secure the blessing and approval from key Internet regulators before moving forward [with listings],” says Chucheng Feng, partner at Beijing-based consultancy Plenum.ai.

The new guidelines remain a work in progress; the State Council’s statement says that officials are still drawing up specific rules for cross-border data audit and regulation. The important detail of how companies will secure regulatory approval is a “grey zone” for the time being, Feng said.

Uncertainty about the new rules and how they will be implemented could halt the parade of Chinese firms queuing to list in the U.S., market sources told Fortune. About 20 China-based companies had been planning to go public in the U.S. later this year, according to Dealogic data. Among them: LinkDoc, a Chinese oncology data and A.I. platform, which has filed for a $200 million IPO.

An IPO freeze may be Beijing’s desired result, says Michael O’Rourke, chief market strategist at financial brokerage JonesTrading. “It appears the Chinese government is seeking to halt, or slow, the process of Chinese firms listing in the U.S.,” given that American exchanges remain highly attractive to Chinese companies.

“China likely fears its tech champions will move towards becoming globalized multinationals that will become harder to control—and make it difficult to access the enormous amounts of data they harvest,” he said.

In the first six months of 2021, 36 Chinese companies debuted in the U.S., raising a total of $12.6 billion, according to Dealogic. In all of 2020, 36 Chinese firms listed in the U.S. and raised nearly $13.6 billion.

Fewer Chinese listings in the U.S. will deal a blow to global investment banks that have benefitted from lucrative fees from underwriting Chinese firms’ U.S. listings, says Kevin Worner, CEO and founder of ChineseAlpha, an equity research platform.

The Didi saga may have a chilling effect too. The ride-hailing giant listed on Wednesday after raising $4.4 billion. On Friday, the CAC announced its investigation and on Sunday the agency cut Didi off from accepting new app sign-ups. When Didi shares opened on Tuesday after the July 4 holiday, they tanked, closing 20% below their IPO price of $14.

“Negative market sentiment could also lead to lower deal activity,” Worner said.