Two years after proposing rules to avert misuse of client assets on the scale of the Madoff ponzi scheme, the Securities and Exchange Commission (SEC) proposed amendments that would strengthen oversight of broker-dealer audits.

If the SEC’s latest proposed amendments to Rule 17a-5 go through, the SEC will have access to documents from accounting firms that audit broker-dealer companies, and it would be allowed to discuss any findings with the accounting firms.

Pitched at an open meeting on Wednesday morning, the proposal would also require broker-dealers to file quarterly reports that state whether it maintains custody of customers’ securities and cash, and detailing how it does so. That report, according to the SEC, would establish a custody profile that examiners could use as a starting point to guide custody examinations.

“When investors hand their assets over to a broker-dealer, they trust that their broker-dealer will hold and invest the assets as directed,” SEC Chairman Mary Schapiro said during the open meeting. “To protect investors and help maintain confidence in the market, I believe we must take strong steps to help safeguard the assets held by broker-dealers.”

Currently, Section 17 of the Exchange Act and Rule 17a-5 require that broker-dealers file annual reports with the SEC and whichever examining authority, such as the Financial Industry Regulatory Authority, oversee the firms. The report should contain audited financial statements and certain supporting schedules and supplemental reports, wherever applicable. The audits have to be conducted by an independent public accountant registered with the Public Company Accounting Oversight Board (PCAOB).

The proposed amendments also require broker-dealers that maintain custody of client assets to undergo examinations to determine if they comply with the net capital, customer protection, quarterly security count and account statement rules.

In situations where broker-dealers serve as the custodian for client assets managed by investment advisors, the firms could rely on the examination outlined in the proposed amendments. Depending on the custody arrangement between investment advisors and broker-dealers, the SEC requires some broker-dealers obtain a written internal control report describing the controls in place at the advisor’s custodian.