New limits on political contributions and other political activity by advisers to hedge funds with public pension plan investors will become effective on March 14, 2011. Many of the concepts in Rule 206(4)-5 (Rule) under the Investment Advisers Act of 1940 are grounded in campaign finance law, rather than the securities laws. For this reason, compliance with the Rule may present challenges to many advisers. At the same time, however, the penalties for failing to adhere to the strict requirements of the Rule will be severe – including a two-year ban on business, loss of revenues, and possible sanctions by regulators. In a guest article, Edward L. Pittman, Counsel at Dechert LLP, provides a practical overview of a compliance program for hedge fund advisers.