Howard S. Altarescu


New York

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Howard Altarescu is a partner in Orrick’s Finance Group. He co-leads the Firm’s global Fintech team, helping industry participants navigate this complex and evolving sector.

Howard Altarescu advises bank and non-bank financial institutions and governmental agencies in connection with innovative capital markets, debt financing and other transactions, as well as on the implications of financial markets regulation. Howard also co-heads the firm's Fintech team, which is focused on serving a wide array of fintech platforms and other businesses. Howard has previously served as Orrick's Finance Sector Leader, responsible for implementing the firm's strategy to provide distinctive transactional, litigation and regulatory services to financial institution clients globally, as well as co-head of the firm’s Finance Business Unit. In these roles, Howard has a broad strategic, advisory and business development role at the firm, drawing on many years of experience, both in law firms and as a banker helping clients develop innovative financial solutions to meet their objectives.

Most recently, Howard has worked on securitizations and other structured financings backed by marketplace loans and has advised numerous clients on the implications of the Madden v. Midland Funding case, the OCC "fintech charter" and related legal issues. Howard has also recently worked on a number of groundbreaking mortgage credit risk transfer transactions between Fannie Mae and major banks and other clients.


Posts by: Howard S. Altarescu

Final Report by EC Expert Group on Sustainable Finance


On January 31, 2018, the European Commission (“EC“), published the final report of its high-level expert group (“HLEG“) on sustainable finance. A copy of the report can be found here.

The HLEG was established to help develop an overarching EU roadmap on sustainable finance and to give advice on how to steer more capital flow toward sustainable investments, identify steps that financial institutions and supervisors should take to protect the financial system from sustainability risks, and apply these policies on a pan-EU scale.

The HLEG recommended a number of actions, including the following, which were considered priority actions:

  • Establish a classification system (or taxonomy), starting with climate mitigation, to establish market clarity on what is “sustainable”;
  • Clarify investor duties and bring greater focus on environmental, social and governance (ESG) factors when making investment decisions;
  • Improve disclosure by financial institutions and companies to make sustainable opportunities and risks transparent;
  • Develop official EU sustainability standards for some financial assets, starting with green bonds; and
  • Integrate sustainability in financial institutions’ governance as well as in financial supervision.

On February 1, 2018,the European Commission published two annexes to the HLEG’s report, the ‘Informal supplementary document on green bonds’ (available here) and ‘Summary of the contributions to the HLEG on sustainable finance consultation document’ (available here).

Recent Tax Legislation May Boost Impact Finance

The U.S. Tax Cuts and Jobs Act (the “Act“), signed into law on December 22, 2017, creates a process to designate certain low-income community census tracts as “qualified opportunity zones” and lets investors temporarily defer taxes by investing capital gains in these designated qualified opportunity zones. The provision is designed to encourage investment in these low-income areas. The provision was based on the Investing in Opportunity Act that was introduced in 2016.

For a tract to be designated as a qualified opportunity zone, the state governor nominates the tract for designation within 90 days after the enactment of the Act, and then the U.S. Treasury must approve the designation within 30 days. The designation remains in effect for 10 years. Up to 25 percent of the total number of low-income census tracts in a state can be designated. The Act allows for temporary deferral and some reduction of capital gains that are reinvested in qualified opportunity funds (entities with at least 90 percent of their assets invested in qualified opportunity zone property) and held for five to seven years, and permanent exclusion of capital gains from sale or exchange of investments in qualified opportunity funds that are held for at least 10 years.

The final Act also preserved certain tax credits related to community development and renewable energy that earlier versions had proposed eliminating. The Act retains low-income housing tax credits, as well as private activity bonds, used to finance affordable housing; new markets tax credits; and investment tax credits and production tax credits for renewable energy projects. The Act also preserves the 20 percent historic rehabilitation tax credit but implements a longer claim period and eliminates the 10 percent credit (subject to transition rules).

New York Regulator’s Fintech-Charter Lawsuit Dismissed

On December 12, 2017, a federal judge in Manhattan dismissed a state regulator’s lawsuit challenging the Office of the Comptroller of the Currency’s (“OCC“) federal-fintech-charter effort, finding that legal challenges to the initiative were premature. In an order filed Tuesday, the judge found that the lawsuit filed in May by New York’s Superintendent for Financial Services Maria Vullo lacked merit, because the OCC’s initiative hasn’t been implemented yet. To view the full article, click here.

CFTC Issues Proposed Interpretation on Virtual Currency “Actual Delivery” in Retail Transactions

On December 15, 2017, the Commodity Futures Trading Commission (“CFTC“) announced a Proposed Interpretation concerning its authority over retail commodity transactions involving virtual currency, such as bitcoin. Specifically, the Proposed Interpretation sets out the CFTC’s view regarding the “actual delivery” exception that may apply to virtual currency transactions. The Proposed Interpretation is open for public comment for 90 days from publication in the Federal Register. To view the full article, click here.

EIB and European Commission Launches Advisory Service to Help Cities Plan Investments


On November 28, 2017, the European Investment Bank (“EIB“) and the European Commission launched UBRIS (for “Urban Investment Support“), an urban advisory service with the goal of assisting cities in member states in accessing finance.  UBRIS will help design, plan and implement investment strategies and projects, including providing technical and financial advice.

Cities can apply for UBRIS assistance at the European Investment and Advisory Hub.  Eligibility criteria note that URBIS will prioritize cities seeking support related to a sustainable urban strategy with a view of developing, financing and implementing urban investment programs and that advice should be given on sustainable urban investments, in particular smart, green and socially inclusive investments.

According to press releases of the European Commission and the EIB, UBRIS will help with the following:

  • Improve a city’s investment strategy by giving advice in strategic planning, prioritizing and optimizing of investment programs and projects.
  • Bring projects and investment programs to a bankable stage, including by providing analysis on demand or support in financial structuring and by reviewing draft grant applications.
  • Explore opportunities for financing under the European Fund for Strategic Investments and/or the Cohesion Policy funds.
  • Support the preparation work for investment platforms and facilities combining funds, liaise with financial intermediaries and set up implementation arrangements for these facilities.
  • Develop financing approaches aiming at alleviating the burden on municipal debt and at helping municipal companies and private urban service providers access funding.

UBRIS will initially use EIB advisory and project services and focus on selected assignments.  The EIB and the European Commission will assess the initial work in the second half of 2018 and may consider additional resources at that time.

The EIB and European Commission press releases announcing UBRIS are available here and here.

The Impact of the House and Senate Bills on Financing Transactions


On November 2, 2017, House Ways and Means Committee Chairman Kevin Brady (R-TX) introduced a tax bill entitled the Tax Cuts and Jobs Act, and later proposed amendments to the bill on November 3, November 6, and November 9, 2017. The House passed the amended version of the bill on November 16, 2017. On November 9, 2017, Senate Finance Committee Chairman Orrin Hatch (R-UT) released a Senate version of the bill, and later proposed amendments to the bill on November 14, 2017. On November 16, 2017, the Senate Finance Committee approved the bill after making some last minute changes in a manager’s amendment. The Senate is expected to take action on its version of the bill sometime after the Thanksgiving break. If the bill is passed by the Senate, the conference committee will attempt to reconcile the House and Senate versions of the bill. If the bill were to become law, there would be certain fundamental changes to the taxation of financing transactions.

Click the chart above to view a larger version

A brief summary of the comparison of the impact of the House and Senate versions of the bill on financing transactions is available here. A more detailed version of such comparison is available here.

Please feel free to contact a member of the Orrick Tax practice group for further up-to-date details as these developments continue to unfold.

European Commission Launches Consultation on Investors’ and Managers’ Duties Regarding Sustainability


On November 13, 2017, the European Commission launched a public consultation on institutional investors’ and asset managers’ duties regarding environmental and social sustainability.  The consultation is open for responses until January 22, 2018.

The consultation is in response to a recommendation in the EU High-Level Expert Group on sustainable finance interim report published in July 2017.  The interim report recommended that the Commission clarify that fiduciary duties of institutional investors and asset manages explicitly integrate material environmental, social and governance factors and long-term sustainability.  The Consultation Document notes that the Commission has commenced an impact assessment process assessing how such a clarification of institutional investors’ and asset managers’ duties regarding sustainability could contribute to a more efficient allocation of capital and sustainable and inclusive growth.

The consultation seeks evidence from “all citizens and organizations” of how clarifications or amendments to investor duties can contribute to more efficient allocation of capital and to more sustainable and inclusive growth; of how to ensure that end investors and beneficiaries have the right information to help them make sustainable choices; and from leading responsible investors on their strategies for considering environmental, social and governance issues.  Further information about the consultation, including how to respond, is available here.

OECD Development Assistance Committee Adopts Blended Finance Principles


The Development Assistance Committee (“DAC”) of the Organisation for Economic Co-operation and Development (“OECD”) has adopted policy guidance on the use of blended finance for development.

The guidance includes five nonbinding principles, which are described in Annex 1 to the DAC High Level Communiqué: October 31, 2017, which was published after a DAC convention on October 30 and 31, 2017. The five principles are referred to in the Communiqué as The OECD DAC Blended Finance Principles for Unlocking Commercial Finance for the SDGs. The principles are: (1) anchor blended finance use to a development rationale; (2) design blended finance to increase the mobilization of commercial finance; (3) tailor blended finance to local context; (4) focus on effective partnering for blended finance; and (5) monitor blended finance for transparency and results. The Communiqué provides additional detail with respect to each principle, including how each principle can be implemented.

In a separate publication, the OECD previously defined blended finance as “the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries.”

The Communiqué also provided guidance on how aid can be spent on refugees arriving in transit or host countries, including a list of aid-eligible and noneligible expenditures.

The Communiqué is available here.

FMO and Shell Foundation to Create Fund to Provide Capital to Social Entrepreneurs


On October 24, 2017, the Dutch development bank FMO announced that FMO and the Shell Foundation, in cooperation with the U.K. Department for International Development, will cocreate a fund to provide growth capital to social entrepreneurs.

According to a press release by FMO, FMO and the Shell Foundation signed a Memorandum of Understanding agreeing to cooperate in the field of access to energy in Sub-Saharan Africa and India. This will include investing in financial institutions with specific goals of increasing access to finance, reducing inequality, and promoting green financing and agribusiness. The growth capital fund is planned to launch in the first quarter of 2018.

The press release is available here.