Robert Plaze, partner at Proskauer, was a member of the SEC’s Division of Investment Management for nearly 30 years, rising to Deputy Director before leaving the agency in 2012. In addition to being instrumental in the creation of the regulatory regime for investment advisers, Plaze played a critical role in the development of the 2003 and 2009 amendments to Rule 206(4)‑2 under the Investment Advisers Act of 1940, the so-called “Custody Rule.” Thus, it is fitting that Plaze recently authored an outline covering the Custody Rule’s history; key requirements; critical definitions; operation; special circumstances; and Form ADV. The Hedge Fund Law Report recently spoke to Plaze in connection with the release of that outline. This first article in our two‑part series explores the history of the Custody Rule, including the 2003 and 2009 amendments, as well as Plaze’s view on possible future amendments to the rule. The second article will outline the challenges of complying with the Custody Rule; common custody violations, including inadvertent custody and lack of auditor independence; and Plaze’s tips for complying with the rule. For additional insights from Plaze, see “Commissioner Gallagher’s Dissent in SEC Enforcement Action Against Hedge Fund Manager Misses the Mark” (Jul. 30, 2015).