Agent and setter returning alternative ruler (7)
I believe the answer is:
emperor
'ruler' is the definition.
(emperor is a kind of ruler)
'agent and setter returning alternative' is the wordplay.
'agent' becomes 'rep' (short for representative).
'and' is a charade indicator (letters next to each other).
'setter' becomes 'me' (the setter of the clue).
'returning' is a reversal indicator.
'alternative' becomes 'or'.
'rep'+'me'='repme'
'repme' reversed gives 'emper'.
'emper'+'or'='EMPEROR'
(Other definitions for emperor that I've seen before include "Eg, Caesar" , "Beethoven piano concerto, Op. 73" , "Monarch" , "Purple --; -- penguin" , "Sovereign and richly-colored butterfly" .)