The SEC recently issued an exemptive order pursuant to Section 206A of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-5(e) thereunder in response to an application by a hedge fund manager to excuse its inadvertent violation of the so-called “pay to play” rule, codified as Rule 206(4)-5 under the Advisers Act. See “How Can Hedge Fund Managers Participate in the Political Process without Violating Pay to Play Regulations at the Federal, State, Municipal or Fund Level?,” Hedge Fund Law Report, Vol. 4, No. 35 (Oct. 6, 2011). This article covers the legal and factual background of the firm’s application, as well as the SEC’s rationale for granting an exemptive order. The exemptive order and application provide guidance for similarly-situated hedge fund managers on addressing inadvertent violations of the pay to play rule via SEC relief. The order also clarifies the application of the pay to play rule to donations to state officials running for federal office. See “Five Best Practices for Avoidance of Pay to Play Violations by Hedge Fund Managers or Their Covered Associates,” Hedge Fund Law Report, Vol. 4, No. 44 (Dec. 8, 2011).