What does IPRU (INV) specifically target in the financial sector?

The correct answer is that IPRU (INV) specifically targets hedge funds within the financial sector. The IPRU (Investment Firms Prudential Sourcebook) falls under the framework of the Financial Conduct Authority (FCA) and is designed to regulate investment firms, including hedge funds. Its focus is on ensuring that these firms adhere to certain prudential standards, which encompass aspects like capital adequacy and risk management. This is particularly important for hedge funds due to their investment strategies and the potential risks they pose to investors and the broader financial system.

The other options are related to different areas of financial regulation. Consumer debt management involves regulations that govern how companies handle borrowers and debts, which is distinct from investment firms. Banking regulations specifically pertain to licensed banks and their operations, addressing different compliance requirements compared to those for hedge funds. Insurance protocols focus on the standards and regulations applicable to insurance companies, which also do not relate directly to the activities governed by IPRU (INV). Thus, in the context of regulatory frameworks, IPRU (INV) is uniquely positioned to address the risks associated with hedge funds.