Why the regulatory limitation on auto-trading (derivatives, et cetera)?

As far as I know, there are regulations in place that stops a company from offering any service that does E2E mechanical trading. Is that correct? Isn’t this superficially limiting a retailer into potentially making more mistakes? Wouldn’t retailers find a way to lose money anyway? Wouldn’t a mechanical system execute risk management strategies in a consistent way and would be miles ahead in the execution part compared to a human? Can’t Zerodha or someone appeal to the regulatory in this case? What would be needed for this to change?

Obviously, none of this would guarantee a profit to retailers since the market efficiency should remain to be in play, whatever level of efficiency then it may be that govern the Indian markets.

I would only assume that if a retailer builds something on their own, it should not interfere with the regulation.

DDPI offers a solution to a different problem, so I would assume we can skip that discussion.