The Tax Practitioners Board (TPB) has released a draft confidentiality-of-client-information code for tax financial advisers.

It proposes that advisers should not release client information to third parties without their permission, with “third party” defined as the licence-holder if they are an authorised representative, an outsourced tax adviser or a cloud-based data storage system.

Depending on contractual arrangements, an adviser’s use of paraplanners, insurance brokers and other technical terms could also be classed as use of third parties.

The TPB accepts an adviser will be part of an external dispute resolution scheme, and client information may be required to deal with a case. It suggests advisers seek legal advice when dealing with complaints or defending claims.

The draft code of conduct says client permission should be signed either on a separate document or in the statement of advice.

Advisers would be required to tell clients about the information they are disclosing, and general disclose-to-third-party statements will be insufficient.

Breaching the code could lead to suspension from being a tax adviser, or termination of registration.

Comments on the draft code must be submitted to the TPB by February 19.