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NEW YORK (CNN/Money) - Many of the nation's major hedge funds will be avoiding government oversight that was due to begin next year, according to a published report.

The Wall Street Journal reports that many funds won't be registering with the Securities and Exchange Commission due to loopholes provided by the agency. The SEC had announced regulations due to take effect in February that require hedge funds managing more than $25 million to register with the SEC, submit to periodic audits and provide detailed information about their trading, among other steps.

But the paper reports that rule only applies to funds that permit investors to redeem their interests in a hedge fund within two years of purchasing their stakes. And it said some of the major hedge funds, including SAC Capital Management LLC, Kingdon Capital Management LLC, Citadel Investment Group PLC, Eton Park Capital Management LLP, will not register with the agency due to a longer lockup period.

"We're aware that some hedge-fund advisers are planning to extend their lockup period and we'll evaluate the situation when we have a better picture of the situation in February," Robert Plaze, associate director of the SEC's investment-management division, told the paper. However, the paper reports that SEC's registration rule proved quite contentious so it may be unlikely that the SEC would adjust the rules to capture the lockup extenders.

The paper reports that some of the large funds, including Citadel, a $12 billion firm, and Eton Park, which manages $3 billion, have always had longer lockup periods. But other funds are extending their lockup to avoid the registration and oversight requirements, according to the paper.

The paper reports that SAC, with $6.5 billion under management, is instituting a longer lockup. Kingdon, a $4.6 billion hedge fund in New York, will impose a two-year lockup in February, according to the paper.

"SEC registered advisors will face a time-consuming SEC audit process and an onerous e-mail retention requirement," the paper reports the firm said in a letter to investors in a September letter. "The additional administrative burden of SEC registration may result in a distraction to senior management with no discernible benefit to our investors. Accordingly, we have decided not to register with the SEC at this time."

In addition, funds that are not open to new investors, such as Lone Pine, which manages $6.9 billion, also don't need to comply with registration requirements, according to the report.

The paper reports that Atticus Capital LLC, with $7 billion in assets managed, told its investors that it will stop accepting new money on Jan. 1. Atticus also told its investors that if it accepted new investments in the future, its current plan would be to launch a new class of shares that had two-year lockups or other parameters that would exclude the firm from registration requirements.

For a look at why hedge fund fraud is greater in the United States than in Europe, click here.