Why does the PASSWORD command not go thru the PASSWORD user exit?

Document ID : KB000121579
Last Modified Date : 27/11/2018
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Question:
Why does the PASSWORD command not go through the PASSWORD user exit?
Environment:
z/VM
VM Secure 3.2 and above
Answer:
In the VM:Secure Reference Guide in the chapter about user exits: 

All activities that change passwords call the exit.. EXCEPT, the PASSWORD 
command. The PASSWORD command does not call the exit. So, passwords must be changed through MANAGE, MAINT MANAGE, Diagnose X'A0', or when a user has an expired password and is forced to change it at logon. 

The sample exit checks a few things such as a minimum length, that the 
password is not equal to the user and that the password wasn't used recently (you have to keep password history for that to be useful). You can check it 
out to see what parts you need to keep and what you need to add. 
Additional Information:
Review the VM Secure Reference Guide