[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7187 Reported in House (RH)]
<DOC>
Union Calendar No. 691
119th CONGRESS
2d Session
H. R. 7187
[Report No. 119-791]
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
September 1, 2026
Additional sponsors: Ms. Pettersen, Mr. Lawler, Mr. Stutzman, Mr.
Garbarino, Ms. McBride, Mr. Moore of North Carolina, Mr. Timmons, Mrs.
Kim, Ms. De La Cruz, Mr. Kennedy of New York, and Mr. Moran
September 1, 2026
Reported with amendments, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on January
21, 2026]
_______________________________________________________________________
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 registered broker at the
direction of such representative, if--
``(I) the representative's
registered 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 any other
broker activity, other than the receipt
of compensation on behalf of the
registered representative;
``(IV) the representative's
registered broker maintains adequate
supervision and control over the
registered representative and the
personal services entity;
``(V) the representative's
registered 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;
``(VII) the personal services
entity meets such other requirements as
the Commission may prescribe, by rule;
and
``(VIII) the personal services
entity, with respect solely to the
resolution of disputes with, and
recovery by, customers--
``(aa) agrees in writing--
``(AA) to submit to
the jurisdiction of a
dispute resolution
forum of the applicable
self-regulatory
organization solely for
the purposes of
enforcement of any
award rendered against
the registered
representative arising
from the securities
business of the
registered
representative; and
``(BB) to be bound
by any such award to
the extent of assets
held by the personal
services entity; and
``(bb) remains subject to
all financial obligations,
liabilities, and remedies of
the registered representative
under applicable Federal
securities laws, the rules of
the applicable self-regulatory
organization, and the
securities laws of any State
with respect to such securities
business.
``(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
for the exception under 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 in the
possession of the personal services entity
that--
``(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 for the exception under
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 activity.--The term
`broker 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 other
activity that is not securities-
related.
``(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.
Amend the title so as to read: ``A bill to amend the
Securities Exchange Act of 1934 to provide an exception from
the definition of a broker for a certain registered
representative-owned personal services entity, and for other
purposes.''.
Union Calendar No. 691
119th CONGRESS
2d Session
H. R. 7187
[Report No. 119-791]
_______________________________________________________________________
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.
_______________________________________________________________________
September 1, 2026
Reported with amendments, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed