There is an option for this inside the Universal Server:

Consumers > Consumer Policy > "Effective Policy name" > Desktop > Zip & Shredder

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The option works with PGP desktop 9.9.1, but when I upgraded to 10.1.2, Users cannot do conventional encryption but now get the ability to do the SDA???

So even with that effective policy applied they still can do shredder?

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Sorry, if we uncheck the PGP Zip check box, users do not get any options (other that the ability to shred) in the PGP context menu when they right click on a file.   The policy is set as follows:

Consumers > Consumer Policy > "Effective Policy name" > desktop > General:  The allow conventional encryption and self decrypting achives box is UNCHECKED

Consumers > Consumer Policy > "Effective Policy name" > Desktop > File Encryption:  Only the PGP Shredder box is checked.

Just to clarify when using PGP Desktop 9.9.1, when a user right clicks on a file, the Create Self Decrypting Archive and secure with passphrase options are grayed out.  In PGP Desktop 10.1.2 using the same policy, all options are available to the user including the Self Decrypting Archive,  Users can create SDAs but they are prevented from using the Secure with passphrase option.

If there is anyway to prevent the ability to do SDAs and conventional encryption, but still present the other options (Encrypt to key, master key, shredder, etc) when the user right clicks on a file and selects PGP Desktop??   Thanks         

The context menu handlers are in:

HKEY_CLASSES_ROOT\*\ShellEx\ContextMenuHandlers

HKEY_CLASSES_ROOT\FOLDER\ShellEx\ContextMenuHandlers 

You could remove the SDA option for that?

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One additional piece of information...  When creating a PGP Zip through PGP Desktop, the SDA and passphrase options are grayed out and appear to work correctly, it's only when you right click on a file, select PGP desktop that the user will get the option to create an SDA...  

Removing the PGP contextmenuhandler removes the PGP Desktop option including all of the options, I only want to remove the option for SDA and keep the other options. 

inside the GUIDs in those reg keys are default strings with the names in.  One of those should say PGP Zip, remove that one

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I can delete the entire "PGP Desktop" context menu, but I cannot specifically pick and choose which items to delete within the PGP desktop context menu.  If I can do that, it would be great and if you have specific instructions on how to do that, I would be extremely grateful.