Setwindowrgn with activex

when i use setwindowrgn api with activex the api makes the background of the control transparent but does not clip the assigned region(s) during design time so the transparent section overlaps other controls (during design time).... is there a way around this?

i also used createroundrectrgn, selectcliprgn and offsetcliprgn api's to create the assigned region and a second region to bitblt onto the assigned region when end user clicks the activex during runtime.

assigned region = what i used with setwindowrgn

clarification:

i created 2 regions.... region 1 is in top half of the usercontrol palette...region 2 is in the bottom half of usercontrol palette. i used bitblt to copy region 2 onto region 1 then used setwindowrgn to constrain the usercontrol to region 1 (only the top half of original usercontrols height)... the usercontrol still remains full height (although bottom half is transparent) ...overlaps other controls during design time which is annoying to say the least when trying to move controls during design time with your mouse and isn't very professional from an end user perspective. any constructive suggestions?