Hedge fund industry giants unhappy with the Security and Exchange Commission's manager registration rule are imposing lock-ups of investors' money, for two years or more, Lipper reports. The registration rule goes into effect on Feb. 1, 2006,

The impending rule has prompted many managers to find loopholes in the system and avoid the arduous task. One of the ways to escape is to impose a lock-up period. The SEC's new hedge fund registration rule stipulates that locking up an investor's funds for two years exempts the investment advisor from registering. The exception was created to shield private equity and venture capital funds, which typically have long lock-up periods because of their long-term outlook.

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