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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7187 Introduced in House (IH)]
<DOC>
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.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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