Create a new DWORD value as "DisallowRun" set the value to "1" to enable application restrictions.
Then create a new sub-key called
Define the applications the are to be restricted by creating a new string value for each application and set the value to the file name to be restricted. (e.g. if you want to restrict the users to run Windows registry, just create a new string value named as "regedit.exe".
Restart Windows for the changes to take effect.