diff --git a/CHANGES.rst b/CHANGES.rst
index 5b05900daf060345e4a6c3e5cd2c237207aa313e..dab9285f3bb958d658fc1012bd899516ad91324c 100644
--- a/CHANGES.rst
+++ b/CHANGES.rst
@@ -1,6 +1,13 @@
-Changes in latest
-=================
-This breaks federation becuase of signing
+Changes in synpase 0.4.0 (2014-10-17)
+=====================================
+This server includes changes to the federation protocol that is not backwards
+compatible.
+
+The Matrix specification has been moved to a seperate git repository.
+
+Homeserver:
+ * Sign federation transactions.
+ * Rename timestamp keys in PDUs.
 
 Changes in synapse 0.3.4 (2014-09-25)
 =====================================
diff --git a/UPGRADE.rst b/UPGRADE.rst
index 2ae9254ecf65da10d74541149a9647c24fd0f7b4..713fb9ae83780d8d7ee33858c414ad71670ad7f4 100644
--- a/UPGRADE.rst
+++ b/UPGRADE.rst
@@ -1,8 +1,3 @@
-Upgrading to latest
-===================
-This breaks federation between old and new servers due to signing of
-transactions.
-
 Upgrading to v0.3.0
 ===================
 
diff --git a/VERSION b/VERSION
index 42045acae20fc8d80f15174966be202f7d898d19..1d0ba9ea182b0f7354f3daf12120744ec5e0c2f8 100644
--- a/VERSION
+++ b/VERSION
@@ -1 +1 @@
-0.3.4
+0.4.0
diff --git a/synapse/__init__.py b/synapse/__init__.py
index a340a5db66ad6c7d5e0d343a6d7b32feb5b153d9..979eac08a774e5386d4fa15569b59d7408c65a9d 100644
--- a/synapse/__init__.py
+++ b/synapse/__init__.py
@@ -16,4 +16,4 @@
 """ This is a reference implementation of a synapse home server.
 """
 
-__version__ = "0.3.4"
+__version__ = "0.4.0"