H.R. 7187 · On the floor · Finance and Financial Sector

Clarity for Compensation Act

What it does

Exempts personal services entities established by registered representatives from SEC broker registration requirements when receiving compensation from their employer broker.
Requires the broker to approve and maintain records of compensation payments to the personal services entity.
Requires a written agreement between the broker and personal services entity governing their relationship and compensation arrangement.
Prohibits the personal services entity from holding itself out as a broker or engaging in broker or dealer activities.

Official summary

Clarity for Compensation Act This bill allows individuals who work for registered brokers to receive compensation for their services through their own personal businesses without having to register with the Securities and Exchange Commission (SEC). Specifically, the bill exempts certain personal services entities from SEC broker regulations. As background, brokers (persons engaged in the business of making securities transactions on behalf of others) must register with the SEC and become members of a self-regulatory organization (SRO). Under this bill, a personal services entity is an entity established by a registered representative to receive compensation for services from the registered representative's broker. A registered representative works for the broker (deemed an associated person of the broker) and is registered with the appropriate SRO. Under this bill, a personal services entity is not considered a broker for SEC regulatory purposes when receiving compensation from the registered representative's broker on the registered representative's behalf if the broker approves and maintains records of the payment, the personal services entity does not hold itself out as a…

Latest action

Sep 1, 2026: Placed on the Union Calendar, Calendar No. 691.

Committee: House Financial Services