Hello Ramakrishna,
To enable the regulation DropDown list, you must proceed with the following:
First, make sure you have performed the steps below:
1. SPRO
2. Governance, Risk and Compliance
3. Common Component Settings
4. Policy Management
5. Maintain Policy Source Categories
6. Add the Policy Source "Regulation and/or requirements"
This policy source will appear in "Policy Source tab" in the policy creation.
Select the "Regulation and/or requirements" and click on "Add Source" button. Now, assigned the available regulations and save.
I attached a screenshot for your reference.
Thank you,
Fernando