H.R. 7187

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7187 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7187

To amend the Securities Exchange Act of 1934 to provide an exemption 
from the definition of a broker for a certain registered 
representative-owned personal services entity, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

January 21, 2026

Mr. Nunn of Iowa (for himself and Mr. Meeks) introduced the following 
bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

A BILL

To amend the Securities Exchange Act of 1934 to provide an exemption 
from the definition of a broker for a certain registered 
representative-owned personal services entity, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Clarity for Compensation Act''.

SEC. 2. BROKER DEFINITION EXCEPTION FOR REGISTERED REPRESENTATIVE-OWNED 
PERSONAL SERVICES ENTITY.

(a) In General.--Section 3(a)(4) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(4)) is amended by adding at the end the 
following:
``(G) Exception for registered representative-owned 
personal services entity.--
``(i) In general.--A personal services 
entity shall not be considered a broker solely 
by reason of receiving compensation on behalf 
of a registered representative from that 
representative's broker at the direction of 
such representative, if--
``(I) the broker instructs or 
otherwise approves the amount and 
timing of the payment and maintains 
records regarding the payment made;
``(II) the personal services entity 
does not hold itself out as a broker;
``(III) the personal services 
entity does not engage in broker or 
dealer activity, other than the receipt 
of compensation on behalf of the 
registered representative;
``(IV) the broker maintains 
adequate supervision and control over 
the registered representative;
``(V) the broker and the personal 
services entity have a written 
agreement governing their relationship 
and the responsibilities of each party 
regarding compensation arrangements;
``(VI) the personal services entity 
is only owned by--
``(aa) the registered 
representative;
``(bb) if the registered 
representative is an 
individual, immediate family 
members of the registered 
representative; or
``(cc) entities wholly 
owned by--

``(AA) the 
registered 
representative; or

``(BB) if the 
registered 
representative is an 
individual, immediate 
family members of the 
registered 
representative; and

``(VII) the personal services 
entity meets such other requirements as 
the Commission may prescribe, by rule.
``(ii) Oversight and examination.--In order 
to ensure that a personal services entity that 
is not considered a broker by reason of this 
subparagraph continues to meet the requirements 
to not be considered a broker by reason of this 
subparagraph, the personal services entity 
shall maintain, and make available upon request 
to the Commission and the applicable self-
regulatory organization, all books and records 
that both--
``(I) the broker from which the 
personal services entity receives 
compensation is required to maintain 
and make available to the Commission 
and the applicable self-regulatory 
organization; and
``(II) the Commission determines 
necessary and appropriate to 
demonstrate that the personal services 
entity continues to meet the 
requirements to not be considered a 
broker by reason of this subparagraph.
``(iii) Definitions.--In this subparagraph:
``(I) Applicable self-regulatory 
organization.--With respect to a 
personal services entity or a 
registered representative of a broker, 
the term `applicable self-regulatory 
organization' means each self-
regulatory organization with which the 
related broker is required to be 
registered.
``(II) Broker or dealer activity.--
The term `broker or dealer activity' 
means an activity undertaken by a 
broker or a dealer who is registered, 
or required to be registered, under 
this Act.
``(III) Immediate family member.--
With respect to an individual, the term 
`immediate family member' means a 
spouse, child, parent, brother, sister, 
grandparent, grandchild, stepparent, 
stepchild, stepbrother, or stepsister 
of the individual.
``(IV) Personal services entity.--
The term `personal services entity' 
means an entity that is established by 
a registered representative to receive 
compensation for the services of the 
registered representative and for 
administrative purposes and other 
benefits.
``(V) Registered representative.--
With respect to a broker, the term 
`registered representative' means a 
person who is--
``(aa) an `associated 
person of a broker or dealer' 
with respect to the broker; and
``(bb) registered with the 
applicable self-regulatory 
organization.''.
(b) Effective Date.--Section 3(a)(4)(G) of the Securities Exchange 
Act of 1934, as added by subsection (a), shall take effect on the date 
that is 180 days after the date of the enactment of this Act.
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