The SEC's Director of the Investment Management Division recently outlined the following priorities under the Advisers Act: (1) modernizing the recordkeeping rule,(2) reproposing and finalizing revisions to the Form ADV, Part II, (3) providing addition guidance on soft dollars, portfolio trading practices and best execution, (4) adopting a new anti-fraud rule to address the relationship between a hedge fund manager and the fund's investors, and (5) studying the broker-dealer and investment adviser regulatory schemes. The attached Client Memorandum provides additional detail on each of these potential initiatives.