Clarity for Compensation Act
Sponsored By: Representative Nunn, Zachary [R-IA-3]
Introduced
Summary
An exemption to prevent a registered representative’s personal services entity from being treated as a broker. This bill would create a narrow exception to the Exchange Act broker definition so a personal services entity owned by a registered representative can receive compensation without being labeled a broker if it meets strict tests for ownership, activity, supervision, recordkeeping, and written agreements.
Show full summary
- Registered representatives and their immediate-family owners would be able to route compensation to a personal services entity without that entity being treated as a broker, as long as the entity only receives payments for the representative’s services and meets the bill’s ownership and activity limits.
- Brokerage firms would have to instruct or approve payment amount and timing, keep records about those payments, maintain adequate supervision and control over the registered representative, and have a written agreement with the personal services entity about compensation and responsibilities.
- The Securities and Exchange Commission and the applicable self-regulatory organization (SRO) could request and examine the entity’s books and records that brokers are required to keep, and the Commission could set additional requirements by rule.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
New rule for registered reps' service firms
This bill would create an exception so a personal services entity set up by a registered representative would not be treated as a broker solely for receiving that representative's pay from the representative's broker. To qualify, the broker would have to approve and record the payment amounts and timing. The entity would have to not hold itself out as a broker and not do broker or dealer work beyond receiving compensation. The broker would have to keep adequate supervision and there would have to be a written agreement about compensation responsibilities. The entity would have to be owned only by the representative, the representative's immediate family (if an individual), or entities wholly owned by them, and meet any SEC rules. The entity would have to keep and give the SEC and the applicable self-regulatory organization the same books and records the broker must keep and any additional records the SEC requires. This rule would take effect 180 days after enactment.
Sponsors & CoSponsors
Sponsor
Nunn, Zachary [R-IA-3]
IA • R
Cosponsors
Rep. Meeks, Gregory W. [D-NY-5]
NY • D
Sponsored 1/21/2026
Rep. Pettersen, Brittany [D-CO-7]
CO • D
Sponsored 4/14/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov