BRADENTON, Fla. — The Tennessee State Funding Board late Tuesday adopted sweeping changes to the state’s guidelines governing cities and counties that want to enter into interest rate swaps and other exotic financial transactions.

The new guidelines, which take effect Nov. 1, must be followed before local governments can use derivatives and are designed to eliminate conflicts of interest by prohibiting individuals or companies from representing more than one side in derivative transactions, state officials said. Cities and counties must also employ experts and meet minimum outstanding debt requirements, among other requirements.

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