Changing Region=0M resolved this problem. Here is the explanation of IGD306I from QW:
An unexpected error occurred during storage management subsystem processing. This message could also appear for the allocation of existing SMS
-managed data sets, if one or more of the volumes to be allocated is pending offline.
In the message text:
errmodnm The module that was in control when this unexpected error occurred.
rc The return code returned from the error module.
rsnc The reason code returned from the error module.
callernm The module that detected this error.
mtb The sequence of calling modules, starting from the module that
detected the problem. The sequence can contain up to 18 modules names.
probid The problem ID for the symptom record that was recorded in the
logrec data set.
System Action: The system ends the request, and writes an error record with problem ID probid to the logrec data set.
Application Programmer Response: Use the message text and the entry with problem ID probid in the logrec data set for information about the error
that occurred. Depending on the ERRMODNM value, the return and reason code can be found in one of the following locations:
o If ERRMODNM begins with or contains any of the following characters, see OS/390 DFSMSdfp Diagnosis Reference for the return and reason codes
- IGD, indicating storage management subsystem (SMS)